9 Key Accounts Receivable KPIs and Metrics For Managing A/R

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DSO, DDO, and KPIs For Managing Accounts Receivable Since accounts receivable management and working capital are critical to your business, it is important to monitor the Key Performance Indicators (KPIs) and other metrics that track your company’s credit, collections, and deduction management results. As businesses have become more complex and even global, standardized analytics have… Read more »

6 Steps to Control Unauthorized A/R Deductions

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Deductions Cause Revenue and Profit Leakage Surveys show customer deductions comprise 5% up to 20% of gross revenues, depending on the industry, with the highest incidence in consumer products (CPG), which relies on “billback” trade promotion deals. Even if only 10% of these accounts receivable deductions are unauthorized, a $500 million company will be losing… Read more »

Post-Audit Claims Policy Example

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Post-Audit Policy Example   It is essential that you have a written policy, communicated to customers (and post auditors), which serves as your notice to them as to what is required for consideration of post-audit claims. Without a basic policy, your position is weaker than it needs to be. The document needs to be signed… Read more »

Understanding The Deduction Process In The Order-To-Cash Cycle

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In an ideal world, all B2B accounts receivable would be straightforward. Your customer asks you to provide something, you do it, and the customer pays you. However, it ends up a lot more complicated, especially when your customers are big-box retailers. Deductions processing in the order-to-cash cycle can result in a significant loss of profits,… Read more »

14 Ways To Reduce “On-time, In-full” Chargebacks and Deductions

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What is “On-time, In-full” (OTIF) It’s the mechanism, the exacting metric, and penalty scheme that large retailers are using to rate and penalize their suppliers for non-compliance with purchase order quantity and delivery requirements. Accounts receivable deduction management software and compliance systems are more important than ever to counter the profit leakage due to OTIF… Read more »

“Wash” Credits and Debits ?

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What is a “Wash” of accounts receivable credits and debits? An accounting “Wash” is a process of taking a series of credit and debit transactions of roughly equal dollars and mass-matching them (the “wash”) to clear the books, resulting in a zero balance. In accounts receivable, this refers to unapplied cash and credit memos vs…. Read more »

On Time-In Full Violations (OTIF)

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On Time-In Full On Time-In Full (OTIF)  is a metric for supply chain delivery performance that measures what percentage of the time a supplier delivers orders that meet the customers’ requirements for fill rate and specified delivery windows. For all suppliers but especially for food and consumer packaged goods companies, the importance of Walmart’s On… Read more »

Top 8 Causes of Vendor Compliance Penalties

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Vendor Compliance Penalties have become a real problem for all retail suppliers. Small vendors, especially, are having problems keeping up with the ever-increasing complexity of doing business in the electronic age. Bog-box retailers are highly computerized and automated throughout the logistics operations and expect their suppliers to be able to match them, deal with them electronically, and ship the goods in a… Read more »

Receiving Dock Procedures for Shortage – Damage Freight Claims

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Receiving Dock Procedures for Shortage and Damage Carriers cannot prevent all instances of freight loss or damage so when it happens, there are a few steps you can take to protect yourself and help assure the freight claim gets paid. Do not sign the freight bill (FB) or bill of lading (BOL) until you have… Read more »

Deduction Management-Best Practices for Shipment Shortages

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Reducing Shipment Shortages Shipment shortages and damages are age-old problems that dilute manufacturer profits by as much as 1/2 to1 percent of gross sales, a loss that can be reduced by taking common sense steps.  Shortage deductions are caused by errors in the shipper’s warehouse, by transportation carriers, and at customer receiving docks, incidences which… Read more »