Deduction Management

§ 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

§ Shipping / Distribution / Quality errors

§ Discounts

§ Duplicate Discounts and Credits

§ Variance from Purchase Orders

§ Audits for Unbilled Sales

§ Private Label Collection Services - TFC can handle your receivable function, all or in part. We can handle the transactions “transparent” to your customer. Direct 800 numbers facilitate calls being seamlessly handled as if we were at your location.

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