Robotics process automation solves reconciliation headache at Danone
Published: Sep 2024
Best in Class Treasury Solution in Latin America
Highly Commended Winner
Danone
Photo of Fernando Navarro, HSBC and Paulo Oliveira, Danone.
Paulo Oliveira
Head of Treasury
Danone is a leading multinational food products company headquartered in Paris, France. The company is present in more than 120 countries and operates with more than 100,000 people across 190 factories.
in partnership with
The challenge
Payment reconciliation was a challenge for Danone’s Brazilian business. Nearly half of the food company’s customers used so-called key accounts, paying for goods via wire transfers with minimal payment details that often entailed just putting in the transaction date and payee name.
Not only was Danone having to process 350,000 invoices in this format a year. The key account customers made the process even more complicated by consolidating several invoices into a single payment without including details such as invoice due dates, discounts, commercial agreements and proprietary codes, creating further reconciliation complexities.
The Danone team had to log onto web portals to extract data (in various formats, files and codes) to export into spreadsheets; manually reconcile payments against invoices and then upload the data into the company’s ERP system. In many cases, the team would have to contact the respective key accounts to clarify doubts, missing codes and other errors.
The costly and cumbersome process took two to three days to complete, impacting days sales outstanding (DSO) and cash flows, as well as creating operational and credit risks for the business.
The solution
Danone wanted to introduce a fully automated solution to streamline its own reconciliation process and cash flows, as well as reduce disputes and improve relationships with its key account customers.
Danone pioneered the first use case of robotics process automation (RPA) equipped with intelligent matching capabilities to automate reconciliation of more than 300,000 invoices in 2023 – representing 90% of invoices from key accounts.
The customised solution delivered by HSBC, in partnership with a technology provider, provides a direct interface between Danone’s ERP and web portals of its key account customers. This enables Danone to reduce its turnaround time by two to three days; improve its DSO, enhance cash flow forecasting accuracy and streamline liquidity.
Best practice and innovation
The technology can capture information off payment orders; it can automatically capture emails with various attachment formats and information in the email body, electronic data interchange and other connections, consistently and reliably extracting key information.
It combined with HSBC’s exclusive matching engine that can interpret and classify captured information to generate standardised formats that fit with Danone’s business rules and considerations. All information is published on a secure web portal that analysts in the credit and collection function can easily access for reconciliation purposes.
The payment application is also automatic, going through to Danone’s ERP via an interface that complements all the application scenarios defined within the implementation project.
Key benefits
Cost savings.
Headcount savings.
Process efficiencies.
Increased automation.
Risk mitigated.
Errors reduced.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
Improved key performance indicator (KPI) metrics.
“We have effectively utilised RPA to automate mundane treasury tasks, improving reconciliation accuracy and cash forecasts to enhance our business – making us a pioneer in leveraging the disruptive technology in Brazil.”
Paulo Oliveira, Head of Treasury
Fernando Navarro
Head of Sales, HSBC Brazil
In Brazil, reconciliation used to be a challenge for key food suppliers like Danone, mainly for receivables from key account customers that used to pay goods via simple wire transfers.
Leveraging HSBC’s tech partnership, Danone’s account receivable ecosystem is now equipped with the necessary capability to effectively manage reconciliation while minimising internal IT efforts that would otherwise be needed to manage the various web portals across its key customers which are subject to constant layout changes.
The reduction in errors and improvements in productivity have subsequently translated to less disputes to strengthen client relationships while enhancing Danone’s own financial key performance indicators.
in partnership with
The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 389 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
Please enter the email that you signed up with below. If your email is
connected to a member account, we will send you a reset link.
This website uses cookies and asks for your personal data to enhance your browsing experience. We are committed to protecting your privacy and ensuring your data is handled in compliance with the General Data Protection Regulation (GDPR).
The technology can capture information off payment orders; it can automatically capture emails with various attachment formats and information in the email body, electronic data interchange and other connections, consistently and reliably extracting key information.
