Deductions Maturity Assessment

We don’t really have a process to review customer compliance requirements

Our review of customer compliance requirements and requirement changes is usually triggered by receiving deductions. The process is pretty much an individual effort.

We have a defined process in place to routinely review customer compliance requirements and changes. We may attempt to negotiate waivers or exemptions for those requirements where we are unable to comply.

We have a defined process in place to review customer compliance requirements and have collaborated with our key customers on changes or new initiatives. We may routinely negotiate waivers or exemptions to certain requirements and have negotiated some of our own requirements.

We have no real cross-functional communication to speak of when dealing with deductions. There is no accountability outside of finance.

Our cross-functional communication regarding deductions typically happens only when dealing with problems or “fire-fighting”. There is limited accountability outside of finance.

We have routine cross-functional meetings to discuss deduction performance. There is a sense of accountability across departments.

We have routine cross-functional meetings to discuss deduction performance and these teams actively work to continuously improve our performance. All departments involved are accountable.

We don’t really have a consistent process. We have a large backlog of open deductions and write off a high percentage

Our process is triggered when a deduction is received. Most of our research is done manually.

We routinely use at least some pre-deduction information available from our customers to research possible problems before the deduction arrives. We prevent some recurring deductions and recover some invalid deductions. At least some of our research activities are automated.

Our process is primarily focused on early detection and prevention of deductions. Invalid deductions are typically recovered. Much of our workflows and research processes are automated.

We don’t use much. (You may or may not have an automated system in which deductions are entered.) Any deduction reporting is done through Excel.

We have an automated system in which deductions are entered and managed. Deduction reporting is done primarily through Excel or Access database.

We have an automated system in which deductions are entered, tracked and managed. We have started to use technology to automate some of the tasks and activities associated with researching and managing deductions (e.g., workflows, POD & claim retrieval, approval process, reporting)

Our systems are automated and take advantage of current technology to reduce manual activities and streamline deduction management (e.g., pre-processing cash app, workflows, POD & claim retrieval, return reconciliation, auto validation, approval process, reporting).

Communication with our customers is pretty much limited to requesting supporting documentation or requesting payback on invalid deductions. This is usually done via email.

We usually get in touch with our customers only after we receive a deduction or they have identified a problem.

We try to meet with key customers on a periodic basis to review our performance. We will reach out to customers as soon as we know there may be a problem – hopefully before a deduction has been taken.

We have routine cross-functional calls/meetings with key customers to collaborate on performance issues or upcoming initiatives. We have usually met requirements to become “Certified Vendor”.

Our Sales team does not do a good job of documenting or communicating the deals that they make with our customers. We typically have to “chase” them for approval after we have received a deduction.

Only our major deals are documented and/or communicated. We still have to frequently “chase” Sales for approval after we have received a deduction.

Most of our deals are documented and communicated. Some of the deductions can be matched and cleared during cash application, however validation is still a manual process.

Our deals are documented and communicated. Most deals are auto-matched during cash application and validation is automated.