Huhtamaki Automated over 85% of their AR Reconciliation & Posting with AlgoriQ

The Objective

To enable Huhtamaki to optimize their accounts receivable process with large institutional customers through seamless integration, automated tracking of outstanding payments, and expedited dispute resolution.

The Background

Huhtamaki is a multinational company specializing in flexible packaging solutions. They are a market leader in flexible packaging and decorative labeling solutions built across modern technologies to enable consistent, safe, and memorable consumer experiences with suitable packaging. Huhtamaki has five lines of business that supply to clientele, including FMCG companies like Britannia, HUL, Mondelez, Ferrero, Perfetti Van Melle, etc.

Huhtamaki’s primary outputs include cartons and containers for foods and other consumer goods, disposable tableware and films, and laminates for uses such as adhesives, plasters, and labels. It has 71 manufacturing units in 34 countries and 15,800 support staff globally.

The Numbers

0 Million

Euros unlocked

0 Day

Reduction in Daily Sales Outstanding (DSO)

0 %+

Straight Through Reconciliation (STR) - No Manual Intervention

The Numbers

0 %

AR Reconciliation Process Automated

0 %

Faster Reconciliation and ERP Posting

The Challenge

Huhtamaki faced challenges reconciling payments of their 1600+ customers and managing ERP posting manually.


Manual Reconciliation​

A fifteen-member team was deployed to manage all Accounts Receivable (A/R) reconciliation operations at Huhtamaki. Manual reconciliation, deduction mapping, and billing adjustments took more than two man-hours per payment received. The average number of payments in non-peak hours was 15 payments per hour, and during peak hours, it was 56 payments per hour.


Unapplied Cash and Delayed Payment Advice

Huhtamaki customers typically make payments without intimation, which was temporarily posted as unapplied credit in Huhtamaki's books. Once the payment was received, the Huhtamaki team had to follow up with the customer for payment advice or remittance notes. Payment advice took an average of two weeks to comprehend because of missing information, manual reading, incomplete information, etc.


Clubbed Payments​

The customer usually procures products from multiple Lines of Businesses (LoBs) and makes a single payment by clubbing 3-to-5 invoices, leading to a challenge in reconciling on an invoice level across LoBs. Further complicating the issue is the fact that they have more than one ERP system across the LoBs.


Complex Deductions Management

The reasons for deductions made by the customers are written in natural language in the payment advice, which is hard to detect and codify. Each deduction has a different treatment by a different team within Huhtamaki. The sales team's time is consumed in assisting the accounts team with collection-related activities. Due to a lack of resolution, approximately 5.2% of the amounts claimed in deductions are written off quarterly.

Our Solution

Huhtamaki engaged with Global PayEX to deploy AlgoriQ – its AI-powered A/R reconciliation solution, to enable an end-to-end digital cash reconciliation process.


Document Data Engine​

Once the customer sends the payment advice, AlgoriQ auto-reads the data irrespective of the format and initiates the real-time reconciliation process. AlgoriQ eliminated the document reading process and delinked the volume of payment advice from Huhtamaki's A/R manpower.


Intelligent Fund Allocation (IFA)​

AlgoriQ matches the payment & the payment advice against outstanding obligations pulled from Huhtamaki’s ERP. The ML-based engine is programmed to learn from reconciliation paths and continuously improve accuracy. The reconciliation is done at the LoB level, and the posting is done automatically in the respective ERP.


A/R Dunning and Payment Advice Follow-Up​

AlgoriQ sends intelligent reminders for payment based on the ‘most optimum time’ – an in-house heuristic algorithm. AlgoriQ also sends reminders when payment advice is not received from the customers.


Smart Dashboard​

For instances where AlgoriQ cannot find a match, a dashboard is provided for a user to input how the obligation is to be resolved (offset with credit notes, trade discounts, raise disputes, etc.). AlgoriQ learns from these inputs and automates similar instances after a particular threshold. Thus continuously improving automation and reducing manual intervention.


Live MIS across Business Functions​

Live MIS dashboards are provided to finance and sales teams at various levels to view the outstanding obligations and payments made by their respective customers in real-time.

The Results

Global PayEX has facilitated Huhtamaki to eliminate a significant amount of manual effort and intervention by automating the reconciliation process end-to-end. The time taken to reconcile payments was reduced from over 15 days to less than seven days within the first quarter, thereby reducing the amount of unapplied cash in the system at any given time. Thus, Global PayEX has helped Huhtamaki with a platform to grow its business by improving sales productivity and working capital efficiency.

“The fintech-powered solution has fully digitized our workflows in India, alleviating our treasury team from traditional manual practices to better focus on core strategy planning, to further grow the business.”

Jessica Chan , Director of Treasury APAC ,

Stanley Black & Decker

Bridgestone India’s digital collections went from 22% before Covid-19 to 80% in March 2021. They unlocked around 7.8M USD over a 9 month period by adopting FreePay. Bridgestone has now reduced its day sales outstanding (DSO) or the average time taken to get paid after invoicing by 6 days. Around 75% of Bridgestone India’s 4500 dealers are extensively using FreePay. Bridgestone has received great feedback from the dealers on the seamless experience of their payment process which is a good win-win for both parties.

According to chief financial officer (CFO) Jyotsna Sharma, Bridgestone India has now reduced its days sales outstanding (DSO) – or the average time taken to get paid after invoicing – by six days, unlocking €7 million in cash flow over an nine-month period.

“Our digital collections went from 22% before Covid-19 to 80% today,” said Sharma. “We are expecting further efficiencies in our working capital as we look towards onboarding all of our dealers onto the platform. We have received great feedback from them on the seamless experience of their payment process so it’s really a win-win for both parties.”

“Digitalization of our finance processes continues to be a key priority for us at Bridgestone India. We are delighted to see great progress with JP Morgan’s solution that has helped us overcome some of the longstanding challenges around manual processes that we face operating in this market while staying compliant with regulatory requirements,” added Sharma.

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