Companies continue to struggle with their efforts to reduce and control customer deductions. On one hand deductions are increasing at the rate of 20% per year. On the other hand, companies are under constant pressure to either decrease headcount or increase staff efficiencies. The complexity of resolving a dispute across multiple departments such as credit, account receivables, collections, distribution, operations, marketing, sales, and customer service introduces a significant challenge to cost-effectively resolving a dispute in a timely manner. As a result, the number of open deductions is exploding leading to increase in Days Sales Outstanding (DSO) and unnecessary write-offs.

In a recent study conducted by the Credit Research Foundation (CRF) on customer deductions across 16 distinct industries, the top three internal challenges for controlling deductions were identified as:

• Lack of cross-departmental cooperation
• Inefficient processes
• Lack of timely access to information.

Most ERP systems provide rich capabilities around receivables financial transactions but do not capture and track the business processes that lead to them. Personnel within departments spend significant amount of time looking for information spread out in silos and manually collaborating with others using email, phone and paper-based processes.