Deductions Prevention Comes Of Age

Deductions is an area where an ounce of prevention is truly worth a pound of cure. Here's how to head off unnecessary deductions before they impact your bottom line


Similarly, automating workflows across departments can help drive cross-functional collaboration, speed resolution of deduction-related issues and make it more difficult for errors and exceptions to take root because much of their ability to occur is essentially automated out. Also automated out are rote, low-level tasks, freeing employees to focus on higher-value work. As many companies have discovered, there's no easier way to double or triple the account coverage and enhance the productivity of collections personnel.

Actionable Insights = Deduction Protection

With integrated views and automated workflows in place, reporting and analytic technologies can provide insights as to why and where in the process errors are occurring. While it is desirable to nip unwanted deductions in the bud, it is even more desirable to eradicate their root causes from the system. In-depth, drill-down analytics can be used to uncover such causes as late delivery, concealed shortages or new sales personnel unschooled in pricing or discounting, and the resulting revelations can be used to further bulletproof the process going forward, so you're not battling over the same ground again and again.

Increasing Dividends

Companies that have implemented this proactive, full-cycle approach — visibility, automated workflows and analytics — to preventing unnecessary deductions have not only experienced sudden improvements in cash flow, operating expenses and customer satisfaction, but have also seen these improvements increase over time. They've gone from perpetually fighting fires to experiencing constant advances in operational efficiency and productivity. And they've enhanced their ability to comply with corporate governance mandates such as Sarbanes-Oxley. Most of all, they're able to view deductions as legitimate competitive weapons, and not as profit-draining liabilities.

About the Author: Robert Sherman is division president, Vengroff, Williams & Associates, a firm with 40 years experience in receivable management solutions, applying proprietary systems and best-practices workflow. www.vwainc.com.

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