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Boost Margins by Automating Vendor Incentive Management with Solution Extensions from SAP

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Read how rebate and cost recovery programs offer wholesale distributors numerous opportunities to improve profitability. When integrated with SAP ERP, SAP Incentive Administration and SAP Paybacks and …

Read how rebate and cost recovery programs offer wholesale distributors numerous opportunities to improve profitability. When integrated with SAP ERP, SAP Incentive Administration and SAP Paybacks and Chargebacks enable the management of rebates, chargebacks, and claims-based programs.

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  • 1. SAP Solution BriefSAP for Retail SolutionsBoost Margins by AutomatingVendor Incentive ManagementBenefitsSolutionObjectives Quick Facts©2013SAPAGoranSAPaffiliatecompany.Allrightsreserved.
  • 2. 2 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.ObjectivesEffectively manage collectionof monies dueRetailers manage thousands of deals from vendors ranging from off-invoiceincentives, rebates, chargebacks, and scan-backs to markdown allowances,damages, and returns to vendors. But how effectively are you managing theidentification and collection of monies due from vendors? What if you couldautomate processes and recoup monies due quickly and reliably?You may have millions of products – andeach day, week, month, and quarter youmust apply, manage, report, and reconcile theright ones to thousands of manufacturer andsupplier programs. Each requires that youmonitor specific transactions, thresholds, orother activities and metrics that may occurhundreds and even thousands of times a day.Moreover, the processes required for each areunique – and all require that you have accessto accurate, trusted data. When you use man-ual, spreadsheet-driven processes to managethe details, it’s inevitable that a certain per-centage will fall through the cracks. And eachtime, it reduces your margins and directlyresults in a weaker bottom line.What’s needed is an automated systemdesigned to handle the complexity and veloc-ity of these programs. And SAP can deliver itwith an integrated set of solution extensions:the SAP® Incentive Administration applicationby Vistex and the SAP Paybacks and Charge-backs application by Vistex.Effectively manage collectionof monies dueBenefits Quick FactsSolution
  • 3. 3 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Use automated processes to recoupmoney from vendorsWith SAP solutions, you can establish auto-mated processes that will streamline how youkeep track of every kind of chargeback,rebate, and other incentive program yourbusiness participates in, such as:•• Scan-backs•• Purchasing rebates•• Chargebacks•• Damages and returns to vendor•• Markdown allowancesSolution extensions from SAP are tested,certified, licensed, and supported by SAP forcompatibility with your SAP ERP application.The embedded nature of these solutionsmeans you avoid the cost of interfaces, addi-tional infrastructure, and development of newskill sets.As a result, the solution extensionsenhance the benefits of your SAP solutioninvestments while minimizing risk andexpense. Once deployed, these solutions workbehind the scenes capturing real-time trans-action data, supporting the management ofclaims, and helping you control varied andchanging chargeback, rebate, and otherincentive agreements.The software can transform the management ofrecouping funds into a systematic, effective process.Use automated processes to recoupmoney from vendorsStreamline and automate processesto reduce days claims outstandingAvoid profit leakageFacilitate compliance with auditorsand internal controlsIncrease visibility and controlCapture your share of vendortrade fundsSolution BenefitsObjectives Quick Facts
  • 4. 4 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Streamline and automate processesto reduce days claims outstandingNow you can have all vendor agreements,regardless of type, in a single system thatautomatically executes the determination andsubsequent communication of claims withmanufacturers and vendors. Barring excep-tions, there is no need for human intervention,which saves you massive amounts of time andhelps you claim what’s due to your companysooner – and get paid more quickly. If andwhen discrepancies, rejections, resubmissions,disputes, and other delays in chargebackclaims settlement occur, everyone – includingmanufacturers and vendors – can go onlineand view the detailed data justifying your claim.With immediate visibility into up-to-date data,issues get resolved more quickly and with littleor no effort on your part.BenefitsSolutionObjectives Quick FactsUse automated processes to recoupmoney from vendorsStreamline and automate processesto reduce days claims outstandingAvoid profit leakageFacilitate compliance with auditorsand internal controlsIncrease visibility and controlCapture your share of vendortrade fundsThanks to all the time saved – andvastly improved cash flow – thesoftware can pay for itself.
  • 5. 5 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Avoid profit leakageIn many retail segments, margins are thin,making it even more important to ensure thatall chargebacks, rebates, and other claims arecaptured and paid as quickly as possible.Leveraging these solution extensions helpsensure that you capture all funds due to you.These products do the heavy lifting for you,capturing real-time transaction data in SAPERP, identifying claims, and executing multi-ple chargeback, rebate, and other incentiveagreements simultaneously. By turning therecouping of funds into a systematic, auto-mated process, you can avoid profit leakageacross the business.The software also streamlines applyingagreed-upon changes to chargeback, rebate,and other incentive agreements retroactivelyto the relevant time period noted in thechange. It automatically reprocesses all pur-chasing and sales histories for transactionsthat were not originally considered eligiblebut now are, given the retroactive change thathas been made to the governing agreement.Similarly, when vendors drop prices, you canretroactively apply the new pricing to coveryour existing inventory and any open, unre-ceived purchase orders, as well as automatethe process of capturing any price protec-tions offered by the vendor. This prevents youfrom going “upside down” on your cost ofinventory relative to the current market price.BenefitsSolutionObjectives Quick FactsUse automated processes to recoupmoney from vendorsStreamline and automate processesto reduce days claims outstandingAvoid profit leakageFacilitate compliance with auditorsand internal controlsIncrease visibility and controlCapture your share of vendortrade funds
  • 6. 6 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Facilitate compliance with auditorsand internal controlsGiven the importance of vendor payments tothe bottom line, many retailers hire third-party auditors to ensure that nothing hasbeen missed. But this costs them time and asignificant percentage of the new monies dis-covered – typically 50%. With SAP IncentiveAdministration and SAP Paybacks andChargebacks, you can eliminate dependenceon auditing firms and keep 100% of all vendorpayments. (For a typical large retailer, thisalone can result in substantial savings everyyear.) The software hovers above deal pro-cesses, provides real-time deal auditing,corrects pricing, and applies deals as salesoccur, shipments move, and more. Becauseyou are always current on deals, you neverneed to call in an auditor in the first place.And because the timing of deal complianceis not delayed, you have better cash flow.BenefitsSolutionObjectives Quick FactsUse automated processes to recoupmoney from vendorsStreamline and automate processesto reduce days claims outstandingAvoid profit leakageFacilitate compliance with auditorsand internal controlsIncrease visibility and controlCapture your share of vendortrade fundsRetain all vendor payments withoutadditional expense. Simple.
  • 7. 7 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Increase visibility and controlOne of the challenges retailers face is collabo-rating with the vast number of parties involvedin deals: purchasing, finance, vendors, andmore. Everyone looks at deals from a differentpoint of view and needs to see differentinformation.To address this issue, the SAP IncentiveAdministration and SAP Paybacks andChargebacks applications give all stakehold-ers one place where they can go to get thelatest information – complete with variouspredefined views for different business roles.As a result, everyone can see what’s relevantand ignore what’s not. For example, in thegrocery category, managers who handlebreakfast foods may have 2,500 to 5,000products in their category and 1,000 to 1,500deals on these items per week. Now they cansee only those deals relevant to their cate-gory – not all grocery deals – and sort andview their category’s deals as needed.And if there is a discrepancy around a charge-back made to a vendor, the solutions facilitatereconciliation before it hits the accountspayable process. Simply give vendors visibil-ity into the software via a portal to see thesupporting transaction data and automatedcalculations (based on agreements) forthemselves. This approach saves you a greatdeal of the time, effort, and cost normallyassociated with discrepancy handling.BenefitsSolutionObjectives Quick FactsUse automated processes to recoupmoney from vendorsStreamline and automate processesto reduce days claims outstandingAvoid profit leakageFacilitate compliance with auditorsand internal controlsIncrease visibility and controlCapture your share of vendortrade funds
  • 8. 8 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Capture your share of vendortrade fundsThe software also helps ensure that you don’tlose out on vendor trade funds that offsetmarketing and other types of costs. Thismoney often falls through the cracks becauseof manual processes that make it difficult totrack and capture funds. For example, a typi-cal offer may involve a sliding scale whereby ifyou buy up to a certain amount of goods, youget a corresponding amount back from thevendor in trade funds. The software tracksthese types of programs for you, automatesthe process of accepting offers as you qualifyfor them, and executes requests for payment.BenefitsSolutionObjectives Quick FactsUse automated processes to recoupmoney from vendorsStreamline and automate processesto reduce days claims outstandingAvoid profit leakageFacilitate compliance with auditorsand internal controlsIncrease visibility and controlCapture your share of vendortrade fundsWhy burden employees with figuringout complex offers when thesoftware can do it automatically?
  • 9. 9 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.Boost your profit marginsWith SAP Incentive Administration and SAPPaybacks and Chargebacks, you can boostyour profit margins by systematically andaccurately recouping all funds due from manu-facturers and vendors. If you’re still managingchargebacks, rebates, and other incentivesmanually or with piecemeal systems, you’releaving a lot of money on the table.With SAPIncentive Administration and SAP Paybacksand Chargebacks, you can:•• Limit profit leakage and capture charge-backs, rebates, and other claims as quicklyas possible•• Eliminate tedious manual tasks•• Consolidate all vendor agreements, regard-less of type, in a single system•• Improve collaboration with businesspartners, internal departments, and otherstakeholders•• Strengthen vendor relationships by resolvingissues quickly and facilitating reconciliationof discrepanciesBoost your profit marginsBenefitsSolutionObjectives Quick FactsEveryone wants to do business with companies thatare fair, cooperative partners committed to living upto their agreements.
  • 10. 10 / 10SummaryUsing an integrated set of SAP® products, youcan establish automated, integrated processesthat streamline the tracking and managementof all types of vendor-driven chargeback,rebate, and other incentive programs.You cangive vendors direct access to data, cut manualwork, and eliminate the need for costly audi-tors. Leveraging tight integration with the SAPERP application, these solution extensions canprevent margin leakage, increase cash flow,and boost your bottom line.Objectives•• Mitigate persistent margin leakage•• Improve relationships with vendors•• Gain accurate insight into chargeback,rebate, and other incentive monies due•• Speed up discrepancy resolution processes,increasing capital requirementsSolution•• Online collaboration with vendors to createagreements and obtain approvals•• Automatic execution of claims and charge-backs according to the terms and condi-tions of the agreement, without the needfor human intervention•• Real-time visibility for key stakeholders,internally and externallyBenefits•• Faster claims recovery by streamlining andautomating deal tracking and execution•• Lower claims recovery costs•• Minimized profit leakage via consistentcapture of all monies due•• Improved cash flow by accelerating dis-crepancy resolutions and the collection ofmonies dueFor More InformationFor more information, contact your SAPsales representative or visit us online atwww.sap.com/solutions/solutionextensions/index.epx.www.sap.com Quick FactsBenefitsSolutionObjectivesCMP14215 (13/03)© 2013 SAP AG or an SAP affiliate company. All rights reserved.
  • 11. © 2013 SAP AG or an SAP affiliate company. All rights reserved.No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG.The information contained herein may be changed without prior notice.Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.National product specifications may vary.These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, withoutrepresentation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials.The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanyingsuch products and services, if any. Nothing herein should be construed as constituting an additional warranty.SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks ofSAP AG in Germany and other countries.Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices.