BlackHawk’s Scalable Reality With Deductions

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How Blackhawk gifted themselves the power of automation, thus scaling up their deduction management process.

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Deductions At Blackhawk: A Disaster Zone

Deductions at Blackhawk, are payments that it owes other brands for their participation in marketing and distribution programs. The company owes its distribution partners money for their participation. That gets deducted from the payment they were supposed to pay Blackhawk for the products supplied. According to Cindy Scott, Sr. Manager at Blackhawk, their deduction landscape a few years ago was “A Disaster Zone”. They had thousands of pending deductions aging for more than two years and over 4,000 total deduction line items. Now, the large scale deductions at Blackhawk were divided into hundreds of stores involved. This meant hundreds of invoices per deduction. Let’s see how that was a problem. For example, let’s say Kroger had a deduction amount of a million dollars. Now, this amount gets divided across all of their stores resulting in around 1500 invoices with each deduction being handled individually. Quite a hassle, considering the manual approach to scaling this mountain of deductions. There was a lack of a definitive process and visibility which made this entire process inconvenient and “A Disaster.”

The key reasons for the failure of manual deduction management included:-

• Disconnected Spreadsheet Dependant System- They handled the entire deduction management through spreadsheets and all the changes done would have been manual which was error-prone and time-consuming.
• High Volume Per Deduction- With 100+ line items per deduction, the issues were evident, the volume per deduction is considerably high.
• No Workflow- A small deduction team meant no proper workflow.
• Lack of Visibility- There was literally no real-time visibility into the status of deduction.

Then, the need for an ideal Deductions Management Solution was highlighted. And they gave themselves the gift they needed the most; Automation.

An Ideal Deduction Management Solution:- A Gift Named Automation

By introducing automation, a deduction management solution could:

• Automatically aggregate all documents
• Create analyst’s worklist
• Divide workgroups properly based on the workflow
• Update real-time deduction status report

This not only helps increase visibility but also helps the analysts create a more efficient worklist.

How Does It Affect The Overall Workflow

Now, dealing with diverse large partners at the same time and managing their deductions implies that the workflow gets divided among several analysts. This is where each group receives one company to deal with and so on continues the workflow. Now the manual workflow didn’t provide enough visibility for the teams to operate in separate workflows. This had an overall negative impact on work distribution. By introducing automation, the structured workflow got divided into processors, where each processor is an individual being allotted a specific action to perform(a process called collaboration). Also, if handled through a central repository, the processors and their allotted workflows could be moderated and changed as per requirements from time to time.

Reporting Via Automation

In case of deduction management if the system is capable of real-time updates, then it can be a doorway to understanding deduction aging and holding the upstream people in the workflow accountable. And automation does provide with a better insight into the entire process which also included elements such as:-

• Calculating the average number of days taken to resolve deduction by the owners.
• Ranking the customers on the basis of their deduction resolving periods, hence improving prioritizations and deduction correspondence.
• Analyzing customer behavior and personal analysis.

Switching To Automation: Deductions Made Easy

Blackhawk gifted themselves with the power of automation and allowed technology to take control over their deduction management process. This wasn’t just a tool that they embraced but more as an ally that made the mountain of endless deductions, well scalable and the entire process way more efficient and endlessly more productive.