Custom Image

Johnson & Johnson’s
Cash Application Automation Strategy That Beat 2 Six Sigma Projects

  • 95% (hit rate) payments applied by the system automatically
  • 43% reduction in Days Deduction Outstanding (DDO)
  • 6 Months reduction in customer setup time in cash application
Cash Application
Business Transformation Stories

HighRadius, in a very short period, was able to flawlessly implement the cash application solution that gave us very consistent and reliable results

Sandra Roth
Manager Trade Financial Management
Johnson & Johnson Consumer Inc.
Challenges
How did HighRadius help
Impact

Non Standard Remittances, Extended IT Timelines and Customer Setup Delays

94% Of the Total Dollars Collected Was Applied via Fedi Before Highradius Implementation

The A/R team used the consumer mainframe-based FEDI (Financial Electronic Data Interchange) pre-processor for ACH and EDI 820 payments. It was an outstanding 1st implementation that yielded great results, but it did not last long.

Problems Started 4 Implementations Later: Setting a Single Customer Took 6 Months

After the 2nd, 3rd, and 4th implementation of FEDI, J&J realized that there are no standards for remittance formats. And the FEDI processor was not able to auto-identify relevant information from the remittance files, causing a significant delay in the cash application process.

To counter this, they began two six-sigma projects to focus on flexibility to enroll customers on FEDI and complete handsfree cash application. But y the time these six-sigma projects began it would take J&J about six months to enroll one customer, which had become a major headache for the A/R team.

The Moment of Truth: It was Time for Cloud-Based Automation
  • Issues With Non-Standard Remittances: J&J Started with FEDI (Financial Electronic Data Exchange) partnership but had multiple implementations with no end to end standardization due to no standard remittance format
  • Cumbersome Template Management: Identifying data sent by customers was a hurdle. The A/R teams were constrained by strict Critical-to-Quality(CTQ) requirements like customized templates for each customer.
  • Cost & Extended IT Timelines: Cash Application became an expensive and lengthy implementation with costly maintenance where patching and updates were required periodically.
J&J Was Searching for the Right Solution Provider That Could Provide:
  • Perfect alignment with J&J’s enterprise IT architecture strategy
  • A reliable business platform that supports automated Cash Application
  • Minimal dependence on J&J internal IT and business support
  • Wide variety of flexible deployment models
  • Crystal clear explanation of implementation and ongoing costs
  • Out-of-the-box custom reporting
ABOUT JOHNSON & JOHNSON

Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world’s sixth-largest consumer health company, the world’s largest medical devices and diagnostics company, and its eighth-largest pharmaceuticals company.

INDUSTRY

Healthcare & Pharma

HEADQUARTERS

New Brunswick, New Jersey, United States

REVENUE

$82+ Billion

PRODUCTS

Cash Application

Automated Remittance Data Capture, Automated Deductions Coding and an End to Extended IT Timelines

An End to Unrecognizable Remittance Formats & Customers

The OCR (Optical character recognition) engine and the auto-remittance capture feature embedded within the HighRadius Cash Application Solution were able to proactively capture the electronic data from check remittances and excel files and text files pdf files, email body, & subject lines, respectively. And then transform the captured data into recognizable system information.

Deductions and Discounts Coding Was Never This Easy Before

The cash application solution was able to automatically map customer reason codes with internal ERP-specific reason codes. It validated whether the customers’ earned and unearned claimed discounts are based on payments terms or trade promotions.

J&J Said Goodbye to Internal IT and Its Associated Costs

The cash application solution was able to automatically map customer reason codes with internal ERP-specific reason codes. It validated whether the customers’ earned and unearned claimed discounts are based on payments terms or trade promotions.

Reducing the Customer Setup Time From 6 Months to a Day Along With an Increased Payment Processing Automation

(hit rate) payments applied by the system automatically
reduction in Days Deduction Outstanding
reduction in customer setup time in cash application

Autopilot for Order to Cash

Get in touch with an expert to see how HighRadius can help your business

Talk to a Financial Technology Advisor
Request a demo

Recommended Transformation Stories

Danone

Learn how Danone setup a profitable SSC saving up to $6M with operational efficiency and faster recovery of past-due payments with cash application software

Learn More
EmployBridge

Discover how the biggest staffing company in the US trusted an automated cash application solution to manage 3.3 billion payment transactions across 2 ERP systems.

Learn More
Lhoist

How Lhoist partnered with HighRadius to achieve same day cash posting with cash application software and unlocks $5 million of trapped liquidity

Learn More