Retailer Shortage Deductions Don’t Have To Cut Into Your Holiday Profits
As sales volume in the retail world naturally increases in the coming holiday season, a spike in revenue for manufacturers and distributors can also be expected. While this should be great news for those providing goods to retailers, except there’s one catch: the higher the revenue, the higher the deduction volume.
Let’s look at one example: Whirlpool Corporation, an enormous appliance manufacturer has a Credit Department that includes 16 individual Credit Representatives, each responsible for the accounts of multiple retail partners. Their process of disputing shortage deductions was laborious:
Credit Reps would first review deduction “reason codes” from the retailers to identify deductions associated with shortages.
Each shortage deduction was then looked up manually in each retailer’s account through SAP. Research followed to determine if the deduction was valid, and if deemed disputable, a POD (proof of delivery) would be requested from the shipping carrier.
Anywhere from a few days to a few weeks later, the POD would show up in SAP. The unpredictable turnaround time meant Credit Reps were tasked with checking back often.
Once the POD was finally received, the Credit Reps would follow the process specific to each retailer. More often than not, that required disputing each shortage deduction one by one in their portal and attaching each POD individually.
On average, each of the 16 Credit Reps was spending 10-15 hours a week disputing shortage deductions. However, a Credit Rep assigned the account of a trade partner with a large backlog could easily spend 50% of their time on deduction processing.
The 160 - 240 manpower hours a week that were spent processing and resolving shortage deductions was repetitive, overwhelming, and a large timesuck. Throwing more workforce at the problem was not an option.
With multiple retail partners, each with their unique dispute requirements and portals, it was essential Whirlpool find a solution customizable for each and start recovering deductions automatically and quickly. A Deductions As A Service automation using cloud robotic technology is a unique option resulting in more company profit, increased employee satisfaction, and time savings.
Whirlpool Corporation is now saving hundreds of manpower hours by automatically disputing each deduction for an estimated time savings of 75%. Download this free case study to learn more about how they did it.