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:-
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:
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:-
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.
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HighRadius Deductions Software acts as a powerhouse for proactive deduction management to prevent bottom-line erosion. It provides automation, process standardization, and a platform for cross-departmental and customer collaboration. It supports deduction management by providing some key features like back-up document capture which captures deduction data from customers and supplies the information required for resolution; auto-capture proofs of delivery (PODs), bills of lading (BOLs) from carrier portals & emails; structured deduction resolution, collaboration & approval workflows to streamline the communication and approval process; along with automatic deduction correspondence, and automatic data push to customer portals. The result is a proactive deduction management operation that recovers revenue normally lost to invalid deductions.