Business Issue:

• Company experienced on-going deductions from key customer due to unresolved EDI and labeling issues
• Another key customer deducted over 6,000 individual claims which were felt to be invalid, but needed to be researched
  
• Deduction reporting from company’s financial software was limited and did not provide management with visibility to the information necessary to understand recurring issues, or evaluate deduction performance.
  

Actions Taken:

• Created and managed cross-functional team to resolve compliance issues.
• Worked together with trading partners to create & execute recovery strategies / settlements.
• Redesigned reason code structure and implemented Business Intelligence software to provide robust, user-friendly reporting and “data mining” capabilities without manual reentry.

Results:

• Collaboration between company and trading partners led to over $1.5 million in settlements as well as improved customer relationships
• The open deduction balance > 90 days was reduced by 80%.
• Improved visibility to deduction information – weekly and monthly Flash Reports & Scorecards prepared for senior management.

Business Issue:

• Company had experienced large chargebacks from key customers due to shipping problems at a new warehouse
• Certain open chargeback balances were quite aged, due to difficulties in resolution and cross-departmental cooperation across multiple departments
• Chargeback reporting from company’s financial software was limited and did not provide management with visibility to the information necessary to understand recurring issues, or evaluate deduction performance. 

Actions Taken:

• Redesigned reason code structure and implemented Business Intelligence software to provide robust, user-friendly reporting and “data mining” capabilities without manual reentry
• Created and executed resolution / recovery strategies for key customers, through cross-departmental involvement.
• Created a Claims Department to focus on chargeback prevention / resolution
• Increased accountability by developing and documenting task lists.

Results:

• Focused efforts by cross-departmental team led to the recovery of over $2 million from key customers within the first 8 months
• The open chargeback balance was reduced by 80%.
• Improved visibility to chargeback information – weekly and monthly Flash Reports prepared for senior management.
• Improved relationship with key customers due to open dialogue and joint “clean up” efforts.

Business Issue:

• Insufficient deduction reporting resulting in poor senior management visibility to recurring deduction issues.
• Limited accountability and cross-functional cooperation leading to minimal prevention efforts and ineffective recovery strategies.

Actions Taken:

• Developed improved deduction reporting using company-owned reporting tools. Focused on top / recurring deduction issues & customers as well as tracking performance over time.
• Created cross-functional steering committee to focus / prioritize improvement efforts and foster ownership and accountability.
• Developed recovery and prevention strategies for key customers, including preparation of settlement meeting packages, negotiation training and identification / resolution of key issues.

Results:

• Initial settlement meetings with key customers resulted in recovery in excess of 100% of disputed deductions (due to partial recovery of valid deductions where “fixes” can be shown).
• Implemented revised allowance policies which can reduce deductions by >$500K.
• Reduced the time it took to process and research deductions by 75%
• Implemented process changes to “fix” recurring deduction issues which had resulted in >$250K of chargebacks during previous 12 months.

Business Issue:

• Company had ineffective processes & procedures in place to resolve and manage deductions. It took up to 1 month after a deduction was received for reason code to be identified and entered into the system
• Deduction reporting was limited and did not provide management with visibility to the information necessary to understand recurring issues, or evaluate deduction performance. In the COO’s own words: “I don’t sleep at night because I don’t know what kinds of deductions are out there.”

Actions Taken:

• Developed detailed policies and procedures by reason code for collectors to follow when researching deductions. Provided improved policies and training on identifying and classifying deductions.
• Implemented Business Intelligence software to provide robust, user-friendly reporting and “data mining” capabilities without manual reentry

Results:

• Focused efforts by senior management using improved reporting capabilities led to the recovery of over $1million within first year
• Reduced the time it took to identify unknown deductions and get them properly coded in the system by 50 – 95% (15 – 30 days)
• Revised policies and procedures reduced collector workload 30-40% by eliminating non-value added activities.
• Visibility to information vastly improved. In the COO’s own words: “I don’t sleep at night because I know exactly what kind of deductions are out there.”

Business Issue:

• Company had over $3.3 million in open deductions
• Limited visibility to issues - 66% of open deductions were coded as “unidentified”
• Minimal reporting capabilities to track and manage deductions

Actions Taken:

• Redesigned and remapped reason codes for deduction information electronically received from factor
• Implemented Business Intelligence software to provide robust, user-friendly reporting and “data mining” capabilities without manual reentry
• Facilitated cross-functional group review open deductions by reason and develop specific recovery and prevention strategies.
• Developed collector procedures for reviewing and analyzing new deductions.

Results:

• Using improved reporting information, over $100K in delivery related deductions was recovered within the first 3 months of implementing improvements
• Root cause analysis resulted in process improvements which prevented close to an estimated $50K in ASN deductions annually.
• “Unidentified” deductions were reduced to 3% of open deductions

Business Issue:

Large volume of chargebacks > 120 days. Initial review identified the following:

• Chargeback reporting was manually prepared and too limited to allow for adequate tracking and root cause analysis – losing $ on potential recovery & prevention
• Cycle times to process physical returns were often 90+ days
• Only 1/3 of allowances and “program” discounts were processed at cash application requiring non value-added follow up for approval

Actions Taken:

• Implemented Business Intelligence software to provide robust, user-friendly reporting and “data mining” capabilities without manual reentry
• Facilitated cross-functional returns team to identify & implement process improvements including RMA pricing and customer “keys” to facilitate matching
• Identified opportunities to increase “same-day” clearing of allowances and programs

Results:

• Open chargebacks > 120 days were reduced by 60% within the first 3 months of implementing improved reporting, due to visibility of information and focused recovery efforts. Ability to easily create standard and ad hoc reports.
• Reduced cycle time to process physical returns for key customers to < 30 days. Allowed faster follow up / recovery of pricing discrepancies.
• “Same-day” clearing of allowances and program deductions increased to 85%. Invalid program deductions quickly identified and resolved. “Cleaner” A/R