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§ Invoice
Collections (Commercial, Consumer, Domestic and
International)
§ Deduction
Management - The prompt resolution of deductions is of
more
importance than
most companies realize. Lost revenue occurs when
customers “ding” their suppliers by taking
unsubstantiated or erroneous deductions.
Deductions taken
outside of the agreed allowances cost the suppliers
money that pile up needless expenses. For sake of easy
numbers, at a 25% gross margin, every Dollar in
expense, requires FOUR dollars of new sales just to
break even. The hole deepens when you factor in
the time value of money plus the direct costs of
collection. Yet companies to a large extent ignore
their deduction issues and choose to settle or write
them off rather than to collect them. Last year, a
large well known manufacturer wrote off $2.2million in
deductions. Using the aforementioned
formula, that equates to over $8.8 million in
additional sales just to break even on the deductions
taken. This does not include the direct and ancillary
costs.
Deductions
surface through many avenues the most frequent areas
are:
§ Coop
advertising
§ Rebates
§ Pricing
Errors |
