Robotics process automation solves reconciliation headache at Danone

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.