Problem Statement

HP Hood, a $3.4 billion family-owned dairy company with 12 plants nationwide, faced a growing volume of customer deductions, particularly from large retailers and distributors, resulting in over 120,000 annual deductions worth more than $200 million, nearly 6% of its sales. Before HighRadius, a single AR team of managers and 13 reps struggled to keep up. Trade deductions were tied to promotions, but non-trade deductions lacked any formal workflow. Approvals were often ad hoc, and when Hood migrated to SAP in 2021, the company's backlog increased from a manageable 2,500 deductions ($2M) to an unworkable 26,000 open deductions worth $19M, resulting in settlement cycles of 60 days. Without visibility or governance, accrual balances became unreliable, PwC flagged audit risks, and write-offs increased from $20K to $300K per month.

Executive Summary

1. 48-Day Reduction in Days Deduction Outstanding: Leveraged the Validity Predictor Agent and Invalid Claim Upload Agent to cut settlement time from 60 to 12 days, reducing open deductions by 85% (26K down to <4K) and freeing $15M in trapped working capital.
2. 55% Improvement in Productivity: With AI Claim Capture and Deduction Coding, analysts shifted from manual prep to resolution, resolving 750+ incremental deductions weekly and tripling invalid deduction recovery from <$1M to $5M annually.
3. Governance & Audit Control Restored: Enforced a $25 strict tolerance, streamlined to 16 standardized deductions reason codes, and reorganized into 3 pods (15 AR reps, 3 managers) with mandatory approval workflows, improving accrual accuracy and audit confidence.

"It was an incredible comeback. We were in a bad place, and nothing we tried was working, short of hiring a hundred people. With HighRadius, we reduced open deductions by 72% and recovered $5M in invalid claims. The tool got us there, in conjunction with the changes we made. It's been a good experience overall."

— David Meininger, Sr. Director of Customer Operations, HP Hood