Deductions E-Book

How Robots Score 5-0 Vs Amazon in the Dispute Resolution Challenge

Disputes are a part of life and processing them takes away a huge chunk of manpower and time. But things get complicated manifold when you have to adopt a complex workflow just for handling deductions from only one customer – Amazon.

Amazon has ties with quite a number of vendors. However, the Amazon Vendor Central is a nightmare for deductions analysts because of its cumbersome processes for resolving disputes.

CHAPTER 01

Executive Summary

Introduction

Accounts Receivable is probably the toughest job in the finance portfolio since it primarily involves convincing external parties to part with their hard earned savings. A customer might cite multiple reasons for why they cannot pay an invoice, but an unresolved dispute is the only valid one which provides a reason why they should not pay an invoice.

AR teams across organisations of all industries and sizes, are keen to resolve any open disputes and clear the pay for payments but resolving customer claims/queries is not a cake walk. It is  a complicated process which involves

i)back-and-forth across multiple teams such as sales, credit

ii)aggregating documents such as claims, POD, BOL from various sources

iii)disputing timely with proper denial correspondence

Further complications arise when your are receiving a high volume of claims from a single major customer, such as Amazon, and your analysts have to deviate from their norm routine to resolve these queries, such as logging into a specific web portal such as Vendor Central to manually dispute these claims.

Customer, carrier and vendor portals are a specific niche when it comes to A/R automation and Amazon Vendor Central is the one of the most widely used customer portals owing to Amazon’s omnipresence. However, customer portals including Vendor Central are notorious for making life hard for analysts trying to transact on them. So how do you handle customer portals and save productive time while improving process outcomes? Read on to discover….

This e-book is for you if

If you or your team are handling resolving customer queries/claims on  their web portals and can relate with any of the below:

1.Raising disputes is a taxing exercise – It involves navigating through claims in the VC (Vendor Central), identifying the dispute, attaching the proper backup documentations and posting it. This takes time and highly inefficient. Will a technology solution eliminate the manual steps associated with dispute resolution in VC?

2.Vendors are penalized for no fault of their own – Invalid deductions pop up frequently where the vendors get disputed without any valid reason and get charged for it. Will technology provide options to counter against invalid claims?

3.Lack of visibility – A primary driver for boosting operational efficiency is to achieve real-time end-to-end managerial view of metrics and statistics. Will technology allow me complete visibility to adopt corrective measures based on drill-down capabilities?

4.Lack of preparedness for the future – Any enterprise-grade technology solution must be ready for the future. Will the technology solution remain relevant in the face of the growing deduction volumes and complex dispute resolution workflow?

Read on as we try to address the above issues by presenting a use case of Amazon Vendor Central.

CHAPTER 02

How difficult is it to raise a claim on VC?

 

Highly manual processes for disputing in Vendor Central

Disputing claims on Amazon Vendor Central is a challenge due to a largely manual-driven process coupled with a non-intuitive interface. Some of the key issues associated with disputing on VC are:

1.Claims download
This process involves dispute analysts to login multiple times in the system throughout the day just to check for claims. Every claim has to be manually downloaded from the portal as it cannot be fetched in bulk.

2.Document upload
Documents such as claims, remittance, proof of delivery, bill of lading have to manually collected by analysts from multiple sources and upload individually into the portal for every single claim.

3.Information key-in
Information related to each dispute has to be painstakingly keyed into the portal. Given the large claim volumes, this could delay raising disputes significantly.

4.Manual correspondence
Every time there is an invalid dispute, analysts have to manually type and send the denial correspondence with relevant documents attached, such as claims, POD, BOL, to Amazon.

5.Non-standardized cross team collaboration
Given that disputes involve teams from multiple departments, including cash allocation, collections (if handled separately), logistics, sales and supply chain, analysts often end up wasting time in coordination instead of actual dispute research.

As a result, dispute resolution:

  • Turns Highly Manual
  • Adds little value
  • Turns Time consuming
  • Misfires on Metrics

Why not let robots do these menial tasks?

CHAPTER 03

How Do Robots Fare Against Vendor Central

1.Claims and POD Aggregation

Claims and POD Aggregation

“As a result, all claim/dispute information are exported from Vendor Central in one single batch eliminating the need for manual download “

2.Auto-coding Deductions

Auto-coding Deductions

“Time spent on dispute identification and coding is now saved and they are directly assigned to analysts who directly start working on them.”

3.Web Push

Web Push

For invalid claims, denial package uploaded to Vendor Portal attached with POL, BOD, ASN, same day the deduction is claimed

4.Dispute Correspondence

Dispute Corresponding

Analysts don’t have to separately write emails, attach documents for each customer

5.Audit Trail

Audit Trail

Disputing timely with proper backup documentation results in faster resolution

 

CHAPTER 04

Robots and Real World Amazon Dispute Cases

1.Shortage Deductions

Storage Automation

 

Why do they happen

“86% of companies said that shortage deductions have increased in the past 6 months – Amazon Deduction Issues/Findings, Attain Consulting Group”

How they are currently resolved

  1. Analysts login to VC and download each claim manually
  2. The ASIN number in the claim is manually matched with the invoice number in the ERP. The ASIN appellation of Amazon is complicated and modified repeatedly
  3. Analysts go through the claims individually and identify the shortage disputes
  4. Analysts collect backup documents from carrier portals, emails, paper
  5. Analysts open each dispute separately in VC and upload the relevant documents such as POD, BOL, claim
  6. Analysts key-in the relevant information in VC for each dispute

 

How does Automation help

Help Automation

 

2.Pricing Deductions

Why do they happen

Pricing-deduction

“65% of vendors said that they experience pricing challenges with Amazon  – Amazon Deduction Issues/Findings, Attain Consulting Group”

How they are currently resolved

  1. Analysts login to VC and download each claim manually
  2. The ASIN number in the claim is manually matched with the invoice number in the ERP
  3. Analysts go through the claims individually and identify the pricing disputes
  4. Analysts login to VC and download negotiated pricing document
  5. Analysts upload the pricing documents relevant to that particular pricing dispute
  6. Analysts key-in the relevant information in VC for each dispute

 

How does Automation help

 

3.Co-op Deductions

Why do they happen

Co op deductions

How they are currently resolved

  1. Analysts login to VC and download each claim manually
  2. The ASIN number in the claim is manually matched with the invoice number in the ERP
  3. Analysts go through the claims individually and identify the co-op disputes
  4. Analysts check product catalog and pricing agreement in VC
  5. Analysts go back-and-forth across Sales and Credit teams for deal sheets and trade documentation
  6. Analysts key-in the relevant information in VC for each dispute

How does Automation help

4.Vendor Chargebacks

Why do they happen

Amazon will review your performance from the prior six weeks and issue Amazon Vendor chargeback fees based on the following criteria:

  • 2% cost of product: if the ASNs submitted have less than 100% compliance but greater than 95% from the trailing six weeks.
  • 4% cost of product: if the ASNs submitted have between 70% – 95% compliance from the prior six weeks
  • 6% cost of product:  if the ASNs submitted have less than 70% compliance from the prior six weeks

How does Automation help

Audit trail

Robot
Robots track all forms of communication with vendor and stores all backup documents in one source for effortless disputing in case of invalid chargebacks


Auto- compliance

Robot
  • Attaches all relevant documents for disputing
  • Eliminates errors due to manual keying in
  • Disputes as soon as claim is raised

 

5.1 Bonus: Dispute Validity Predictor

Why auto-resolve disputes?

 

Dispute Validity Predictor

 

What Robots can do?

What can robots do

 

5.2 Bonus: Drill-down Capability

Additional visibility with Reports

Robot
Robots provide real-time out-of-the-box and custom reports for end-to-end managerial view



What Robots can do?

Robot

“It allows drilling down on inefficient sub-processes and applying speedy corrective measure”

  • Reports provide view on the number of deductions and the type of deductions happening periodically for different geographies, warehouses, vendors and customers
  • Reports provide C-level Executives with visibility on cash flow and working capital metrics such as Deductions Day Outstanding, write-offs, volume of deductions, deduction values and more
  • Reports allow managers to track productivity of analysts and take instant corrective actions on identifying process inefficiencies
CHAPTER 05

Summary

Before

  • Each claim is manually downloaded from VC for resolving resulting in delayed dispute resolution
  • Vendors wait for 30 days for repayment and then raise dispute, if not paid
  • No option to batch deductions
  • All data elements need to be manually keyed in when disputing
  • Piling up of unresolved disputes results in more write-offs
  • Insufficient time dedicated to research and resolution of disputes
  • High Days Deduction Outstanding and low invalid deduction recovery

After

  • All claims are pulled from VC in a single batch, along with BOD, POD from portals
  • Dispute raised with proper backup as soon as invalid claim is raised
  • Deductions can be processed en masse
  • Data elements automatically entered into the system with high accuracy
  • Automated resolution results in lower write-offs
  • With automation analysts have additional bandwidth to research and resolve disputes
  • Less DDO and high invalid deduction recovery