Ship and Debit Audit

Recover Excessive Ship and Debit Charges

Ship-and-Debit rebates or wholesale contract) are allowances used by electronic and technology original equipment manufacturers (OEMs) to protect channel distributor margins when the distributor must sell at less than the in-stock price. For example, a rebate may be appropriate when the OEM reduces its product prices, as a response to changed market conditions, or when a distributor is required to lower the resale price to be competitive close a large sale.

Our matching and reconciliation software enable us to identify, investigate, and validate these allowances against your Ship and Debit agreement to identify inaccurate payments. Records reviewed include EDI, XML transactions, SKU price variances, product returns, price protection, in-field transfers, rebates, short shipments, drop-shipments, stock rotations, sell-ins, sell-through, and impact of other rebate and allowance programs.


Our Auditors Review, Make Calls and Obtain Payments

An OEM may have volume, mix, and sales rebate programs, and perhaps as well directly with a distributor's end-customer. If not careful, the OEM can end up paying Ship and Debit claims on top of the other allowances already given. In another example, the product must purchased directly from the OEM, as opposed to third-party diverters at lower than OEM prices, and then improperly claimed under a Ship and Debit program.

After careful review, our auditors contact the reseller or end customer for supporting details and obtain repayment for any excessive or erroneous claims.

Ship and Debit Process

  1. The distributor requests, and the supplier initiates a Ship and Debit terms agreement.
  2. The distributor initiates a Ship and Debit claim (debit memo) for a difference in pricing, a discount or rebate to reduce the cost to the distributor for in-stock inventory or the amount of a sale.
  3. The OEM must validate the claim by verifying distributor sales and inventory documentation against the OEM sales records and program requirements.
  4. A careful Ship and Debit review is needed because of the potential for error or abuse. For example, the distributor inventory must be proved to have been purchased directly from the OEM and not from third-party diverters at lower than OEM pricing and then claimed under a Ship and Debit program.
  5. The "settlement" or payment for the Ship And Debit claim can be by means of a direct payment or credit memo to offset a deduction.

Our Audit and Recovery Process is Non-Intrusive

Our process is straightforward and does not require any support from your staff except for the required data and documentation. Supplier contacts are kept professional, friendly, and collaborative. The process is easy.

  1. You provide data and document access, plus an introduction letter, if needed.
  2. We run your ship and debit claims data through our tracking software to establish priorities for review.
  3. We obtain backup from the resellers and carefully analyze that against your data to verify claims.
  4. After a supervisory review, we contact the reseller for repayments due to you, and we reconcile any discrepancies in positions.
  5. We bill you after identifying the amount due. We will assist in that process.
  6. You receive a management report identifying steps to reduce such instances in the future.

Related Content: Carixa Automated Cash Application Video

Contact us to learn more about how this Carixa module can function independently or as part of a total Accounts Receivable software system.

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