Increasing visibility with deduction metrics

Days deductions outstanding (DDO) is a vital measure in an organisation’s accounts receivable, and a key indicator of its financial health. When leading global brand Danone sought to tackle its deductions metric, it turned to fast-growing fintech company HighRadius for clear results.

nyone seeking to eat healthily has probably come across products from Danone, one of the world’s leading consumer packaged goods (COG) companies, and the name behind many leading dairy and plant-based products – as well as bottled waters and medical nutrition offerings. As a company that aims to inspire healthier and more sustainable eating, it takes its own financial health as seriously as the well-being of its customers.

A 65% 32

The proportion of Danone’s payment volume made up by electronic fund transfers, such as ACH and wire. Danone

Danone has a diverse customer base, selling its products through ‘mom and pop’ stores, as well as big-box retailers like Walmart. Delivering products to such a mix of outlets, across the globe and from multiple business units, presents many challenges for the company’s automated receivables process. The company uses a decentralised finance system, which presents a number of issues for the AR process. The first is – understandably – the complexity that goes with managing accounts across such a large enterprise. Along with the high volumes of short pays and high rates of manual processing of deductions, comes poor visibility in the collections process. “We handle all the credit evaluation, cash application, collections, and deductions management within our shared services department in North America,” notes Jacob Whetstone, director of credit and accounts receivable at Danone. “Most of these operations were processed in-house and had a high manual intervention.” Danone knew, however, that there was no reason for these problems to persist. Understanding the potential of fintech companies to leverage powerful tools, not least artificial intelligence and cloud hosting, to combat inefficient processes, the company turned to software-as-a-service (SaaS) specialist HighRadius – helping companies automate AR and treasury processes using AI and automated systems.

Clarity out of complexity HighRadius has caught the eye of many leading brands thanks partly to its rapid growth over the past ten years – and partly due to its tight focus on using cutting edge technologies to redefine efficiency in

AR processes. It already counts more than 200 Fortune 1000 companies among its clients, as well as many medium-sized enterprises.

For all of its clients, HighRadius has successfully automated and streamlined its receivables and treasury processes. For Danone, in other words, HighRadius was an obvious choice for automating a complex CPG receivables process – due to the ability of its integrated receivables solution to boost resource productivity, increase the speed of collections and reduce DDO.

The first step was to analyse the pain points that Danone faced. The company used multiple payments and remittance formats, and its 100% manual cash application processes greatly increased process complexity and the number of short pays. Then HighRadius had to consider Danone’s global presence and huge customer base, which resulted in multiple lockboxes spanning different geographies, which again increased process complexity. Danone’s AR department was largely dealing with payments coming in via automated clearing house (ACH), wire and checks with multiple remittance formats, ranging from EDI 820 to emails and check images. Where electronic funds transfers (EFT), such as ACH and wire, accounted for 65% of the total payment volume, and contributed to 92% of the overall dollar value, paper-based payments such as checks represented 35% of the payment value – yet only had an effect of 8% on the dollar value. Since no remittance data for e-payments were provided by the bank, Danone also had 24 different portals for remittance data aggregation. “Initially when we would apply cash, we would have two screens, the first one would have the remittance data and the other would showcase the SAP-related data,” says Whetstone. “But for a lot of these payments we had to undergo multiple different steps – not just look at the remittance, but also go to the portal and download documents. It was all too time-consuming.” The AR team at Danone was bogged down by having to manually aggregate the remittance information from multiple portals, link them to

Finance Director Europe /

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