Huntsman

Huntsman takes action to identify lost revenue and gains a financial edge.

Industry:

Manufacturing

Regions:

Global

Solutions:

DataShark, Audit & Recovery

huntsman-basware-customer-logo

How Huntsman Corporation Saved Nearly $9 Million in Duplicate Payments & Invoicing Errors

Huntsman Corporation—a global chemical company that manufactures products used to increase the energy efficiency of buildings, reduce fuel demand in ground and air transportation, reduce waste, and enable alternative energy technologies, among other solutions—faced significant challenges in their Accounts Payable (AP) processes, mainly related to payments errors.

Over a two-year journey to centralize shared service functions into regional hubs, Huntsman enhanced its AP processes, addressing concerns about duplicate payments and other financial errors.

The lack of transparency and reporting for duplicate payments and limited capacity to identify and recover errors prompted Huntsman to seek a solution that could pinpoint issues and recoup lost payments as an extension to their own AP team. In response to these challenges, Huntsman ran a proof of value (POV) to determine how the solution could help based on real-time data. This POV led to the discovery of $250,000 in duplicate payments which prompted Huntsman to continue their work with us, achieving some impressive results.

Key takeaways

$5M

saved from duplicate payments in 2023

90%

of suspected duplicates confirmed with POC

$3.5M

recovered in lost revenue over the past 3 years

Huntsman’s Challenges

Recognizing the various errors in their system, particularly duplicate errors, Huntsman faced a critical challenge in gaining visibility into these issues, identifying the source, and quantifying their impact on revenue.  

Huntsman also needed an in-depth analysis of their service contracts to unveil payments extending beyond the agreed-upon contracts. Other areas they looked for support included situations where products were returned without corresponding refunds, canceled invoices, and discrepancies in tax charges.

The vendor master file posed additional hurdles, with identified problems such as duplicate vendors and extensive payment terms leading to significant operational challenges. Although the objective was to rectify these issues through a file cleanup exercise, the complexity and time required to identify and cleanse the data correctly was beyond the current AP team’s capacity. 

Complicating matters further, the use of multiple ERP systems resulted in instances where the same purchase order existed in various systems across their active regions, spanning the Americas, EMEA, and APAC.

Huntsman has over 3,000 requisitioners in the company, and when considering those involved in 'goods receipt,' it means that over half of the company plays a role in the process. Maintaining the education and skill levels of such a significant number of individuals poses a challenge, leaving room for potential mistakes. 

How Huntsman recouped and took proactive measures

Huntsman adopted a dual-pronged strategy after the POV phase, which verified a subset of the total errors and found 90% of suspected transactions were errors. Huntsman first initiated the Audit & Recovery service to identify and recoup lost funds from the past three years and then used the DataShark software to proactively guard against fraud and prevent duplicate payments.

We enjoyed working with the Basware team; they’re easy to work with, and the technology helped identify a significant problem Robin Holdt, Global P2P Director, Huntsman Corporation

The recovery process involves monthly meetings and specialized reports tailored to Huntsman's needs. These reports include precise instructions for reclassifying payouts to the appropriate cost centers. This aspect of the reporting system saves time and ensures that procurement doesn't bear all associated costs.

The second component of the solution involves a proactive approach to detecting duplicate payments and addressing potential fraud and compliance issues. The team utilizes the DataShark software daily to scrutinize errors it may have identified, averaging about one or two errors per territory each month. With the system in a constant learning phase and ongoing cleanup of the vendor master file, the incidence of these errors is decreasing. Any unusual activity is rectified before the monthly payment run.

The key benefit is simply financial advantage. We’ve prevented $5 million in duplicate payments and recouped $3.5 million, which helps with working capital and cash flow. We work seamlessly with the team who strengthen our internal capabilities with skills and bandwidth we don’t possess

Robin Holdt, Global P2P Director, Huntsman Corporation

Results

The financial benefits from the POV exercise, coupled with the ongoing utilization of the Audit & Recovery service and DataShark software, consistently exceeded Huntsman’s expectations. The continuous Audit & Recovery process has recouped $3.5 million from the past three years. The proactive approach of using DataShark to scrutinize payments has resulted in savings exceeding $5 million in the last 11 months alone.

The implementation of advanced technology solutions not only saved Huntsman close to $9 million in duplicate payments and invoice payment errors but also transformed their AP processes, providing transparency, efficiency, and the ability to proactively prevent errors. The success of this implementation demonstrates the positive impact advanced technology solutions can have on optimizing financial operations and driving significant cost savings.