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Our Subscribers Say...
I think Credit Today is fantastic. You cover many practical topics in the credit field that I use regularly. Just one recent example—a conversation on the ListServ about preferential payments—gave me tips that I used in an actual case. The specific information I picked up from this one discussion saved me $10,000, enough to cover my membership for many years!
- Steve Savino
Manager of Credit & Collections, ASSA Abloy Americas Division, New Haven, CT
Credit Today's Resource Directory and their online e-mail forum (ListServ) provide information on almost any credit-related topic you can think of. It is a great way to exchange information with other credit professionals. As the saying goes, "You don't know what you don't know."
- Scott Goen,
Credit Manager, Big Lots Stores, Inc., Wholesale Division
"We've recently started using the ListServ tool within Credit Today. This is phenomenal and powerful forum for gaining immediate feedback, ideas, and suggestions, relative to any credit topic under the sun, all in a real-time e-mail format."
-Javier Vela, Senior Credit Manager, Global Credit Services, JDA Software Group Inc.
"Being a part of the Credit Today online community is like having the expertise of hundreds of credit managers at your fingertips. These credit execs are willing to help you solve topical business issues as they arise. In the current environment of ever increasing competing priorities which reduce our opportunities to meet peers out of the office face-to-face, this is the most valuable tool you can have on your desktop! It's important that we have a mechanism to reach out to our counterparts quickly to exchange knowledge as well as to stay on top of industry trends."
- Victoria Artis, Director of Customer Financial Services, Pfizer, Inc.
"Over the last 10 years I've seen Credit Today evolve from a monthly credit publication into a quality source of information and guidance for the B2B credit community. The website, with its user friendly form downloads, will take you from examples of new account credit applications to bankruptcy forms and everything in between.
The Credit Today ListServ has become the pre-imminent online forum, providing an opportunity for discussion and comments (and occasional humor) from an impressive list of credit professionals."
David Dungan, Director of Credit
Justin Brands, Inc. (A Berkshire Hathaway company)
Fort Worth, Texas
"There are numerous credit periodicals available to the credit professional today. How good is Credit Today? Is it relevant? I always have to read it late, or online because my credit analysts want to read it the minute it comes in. When my staff wants to read a publication before I have a chance to read it then something is working in that publication. We have cancelled our other subscriptions. When you have the best you do not need the rest."
Ron Woods
Corporate Credit Manager-World Wide
Thales Navigation, Inc.
"The newsletter, coupled with the website and the ListServ, are to us, more valuable than any other credit publication, bar none. I try to use at least one article out of each newsletter for departmental training/discussion sessions."
D. Mark Constantine
Corporate Credit Mgr
Fulton Paper Company
"I love Credit Today and read every issue cover to cover. For me, the greatest perk of a subscription is ListServ. I believe Credit Today's ListServ members may be the most knowledgeable Credit brain trust in existence today. I have saved and categorized hundreds of contributions on a wide variety of topics which I refer to often. It's an easy and cost effective way to network and learn."
Doug M. Thomas
Kimberly-Clark Customer Financial Services |
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Problems With Deductions?
Deductions are growing worse all the time. In fact, at many companies, deductions are more significant risks than bad debts. Here you'll find solutions to help you cope with this big problem and save tens, if not hundreds, of thousands dollars for your company. Learn the top 5 causes of deductions, how to reduce unearned discount deductions, how to resolve post-audit claims, and how to read routing guides and compliance manuals for fun and profit!
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Five Steps for Handling Chargebacks
"One of the most difficult tasks in credit management is to collect chargebacks and deductions," says one New York credit manger. He's found that following five-step approach usually yields good resul . . .
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Team Takes Control of Deductions
A payment arrives for the invoice amount, less a deduction. Now what? Who does the accounts receivable associate have to call or see to confirm that the deduction is allowed? Within the answer to this . . .
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Purging Deductions
At one time, deductions were a large problem at Nestle USA (Solon, OH). "Many of them were sitting in Accounts Receivable for up to two years before anything was done," recalls Peter B. Knox, CCE, dir . . .
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Credit and Sales Both Tackle Deductions
The sales order processing department at Prestone Products Corporation (Danbury, Conn.) makes the initial review of all deductions made by customers. Those judged by the department to be justified are . . .
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How do you handle deductions and credit memo requests?
February 3, 2011
I'm desperately trying to streamline our process for managing deductions and credit memo requests. Can I please get a little information about how you are currently handling this process? Who is responsible, what guidelines do you follow and (most importantly) is your current process working for you? . . .
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Unauthorized Discounts Can Run Into the Millions
How would you like to get a check from one of your customers for $716,000 for their unauthorized deductions, unaccompanied by any breakdown of what the money was for? You might not be so happy if your losses ran to $13 million. Read onto see how ridiculous the deduction game has become. . . .
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Get on Top of Deductions Early
They used to have deductions on the books for years. Now they attack those deductions up front. Result: They recover 80-90% of the chargebacks. It's a simple process. Some of the analysis is done by sales department's order processing people, but credit keeps a close watch on the process. . . .
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A Three-Phase Deduction Management Strategy
You can seize control over surging deductions. But you can't do it on your own. Causes and excuses for deductions typically flow out of many different departments, so you need the active cooperation of all of these departments to stop them. Here's how one credit manager formed a multi-departmental deduction control task force. . . .
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Proving Delinquencies Ahead of Time
Getting way out in front of problems avoids a lot of problems. When this credit professional calls, delinquents have nowhere to hide. They can't say they didn't receive the invoices because he's just sent them fresh copies. And if there are questions or disputes, they can be worked out right then and there. It's a system that's reduced his formerly formidable collection problems by 80%. . . .
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Creating a Companywide Deduction Management Team
There is no credit work much "dirtier" than resolving unearned deductions. And it is always worst in those companies where Credit gets minimal cooperation and assistance from other departments. "It takes everyone in the company to manage deductions," emphasizes this credit manager. "It can't just be the credit department." He recommends working closely with Operations, Accounting, Shipping, Sales, and Customer Service. "First, calculate what deductions are costing your company," he advises. "Then, when you meet with the team, share these figures with them." Once everyone is on board in understanding the seriousness of the problem and is willing to work together to introduce solutions, the next step is to come up with ideas. In most cases, he sees these as falling into three categories: . . .
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Can Writing Off Customer Deductions Be Justified?
If you are faced with small-dollar deductions, you might be inclined to go after the companies (charging them back) because you don't want to start giving people the wrong idea about how serious you are about getting paid. But is it really worth the effort and the expense? This credit manager did a cost/benefit analysis that led him to write off these nuisance deductions. Learn what he learned. It might simplify your life. . . .
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Deduction Resolution - Not Simply a Job
At one time, the deduction resolution process at this firm was cumbersome, confusing, time-consuming, expensive, and not always effective. "We had a large staff of people who had to review the deductions, seek internal approvals from various people at various levels in the organization, and then process the credit memos," recalls the credit director. This is the story of: - how and why this firm initially contracted with a third-party firm to help them cope with deductions and made the transtion work well
- how they accounted for the deductions
- how they ensursed that the outsourcing firm performed well for a while, but why their results ultmately began to falter. Note: The specific reason for this is very important for anyone to understand before entering into a long-term relationship with an outsourcer!
- why and how they ultimately brought the process back in-house and revamped their system
- how they set up an incentive plan to reward employees who found the root cause of deductions
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Deduction Management in a Perfect World
Several years ago while managing credit and collections for a Midwest non-production provider of electronic tools for the automotive, consumer and industrial industries, Tanya Blackwell faced a major deduction problem. "We designed and manufactured tools to get into the hands of dealers and mechanics," she explains, "and we collected from wholesalers and retailers. Wholesalers were the cause of our deduction issue. Every month we did a deduction reserve as part of the month-end closing, and that reserve kept getting bigger and bigger--into multiple millions." . . .
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Tackling the Chargeback Challenge
When your product is Victorian style beds, you can imagine the variety of designs and colors you have to deal with routinely. Mistakes and misunderstandings are inevitable, and all of these funnel through the credit department in the form of chargebacks. How can you handle these quickly and efficiently and keep customers happy? This credit woman has found a way. Here she outlines four ways she tackles the immediate problems. More important, she gives you valuable guidance on how to avoid future chargebacks as well as some insights on using technology. . . .
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Effective Deduction Management
Until a few years ago, Digital Equipment Company (Maynard, MA) sold mainly to end users. Today the company sells primarily through distributors and other resellers, and there have been some significant consequences for the accounts receivable and deduction resolution functions. The fluctuating inventory levels and rapidly changing product offerings associated with the new marketing tack have created an environment where returns, pricing adjustments, and marketing co-op arrangements have become more commonplace. The result has been large numbers of deductions, discrepancies, and disputes. Many of those deductions were legitimate. It was not simply a question of redesigning a lot of internal process to reduce the number of deductions. (The company did address a couple of these areas, which are discussed below.) Rather, the major goal was to find ways to streamline the process to reduce the amount of time it took to resolve the deductions, discrepancies and disputes. They found a technological solution. They're already down to $50 million a month from $100 million. Find out how they achieved this phenomenal progress. . . .
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"A Mass of Deductions" No More
Are you facing a mass of deductions that are eroding your bottom line? Do you feel that you can't handle the problem alone? Well, you're right. If you want to bring deductions under control, you need the help of a number of groups in your organization. This credit manager formed a team consisting of a credit rep, the customer service manager, the sales manager, and the director of sales. This team, in turn, met with their counterparts in the customer organization, including the accounts payable clerk, the accounts payable manager, the finance manager, and the director of purchasing. Together they devised a five-step deduction resolution procedure. Here's how it works. . . .
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Four Steps to a Proactive Strategy on Handling Claims and Adjustments
Does everyone in your company know what a drain claims and adjustments can be on profits? You can answer both of these questions with a resounding yes if you take the time and trouble to develop a program like the one this company has. A proactive strategy for handling claims and adjustments involving Credit, Sales, Order Entry, Customer Support, Shipping, and Returns was accomplished in four phases: - Documenting the department's dispute procedures
- Holding meetings to discuss what needs to be done to eliminate any problems that are causing unnecessary claims and deductions
- Developing manuals (published on the Intranet) showing in detail the department's dispute resolutions procedure
- Monitoring the procedures and updating the manuals whenever necessary.
You'll want to read on to learn the procedures the company devised for handling claims -- procedures to be followed regardless of the reason for the deduction. . . .
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Outlook 2012
This month's survey explores...
- What the top problems are facing credit execs currently, and
- What the top improvement initiatives are.
Click here to participate!
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