Boost Margins by Automating Vendor Incentive Management


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Find out how smart retailers are recouping all monies due via chargebacks, rebates, and other incentive programs – with auditors – with solution extensions from SAP. The SAP Incentive Administration and SAP Paybacks and Chargebacks applications automate and streamline the complex processes involved.

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Boost Margins by Automating Vendor Incentive Management

  1. 1. SAP Solution Brief SAP for Retail Solutions Objectives Solution Benefits Quick Facts Boost Margins by Automating Vendor Incentive Management© 2013 SAP AG or an SAP affiliate company. All rights reserved.
  2. 2. Objectives Solution Benefits Quick Facts Effectively manage collection of monies dueEffectively manage collection Retailers manage thousands of deals from vendors ranging from off-invoiceof monies due incentives, rebates, chargebacks, and scan-backs to markdown allowances, damages, and returns to vendors. But how effectively are you managing the identification and collection of monies due from vendors? What if you could automate processes and recoup monies due quickly and reliably? You may have millions of products – and the details, it’s inevitable that a certain per- each day, week, month, and quarter you centage will fall through the cracks. And each must apply, manage, report, and reconcile the time, it reduces your margins and directly right ones to thousands of manufacturer and results in a weaker bottom line. supplier programs. Each requires that you monitor specific transactions, thresholds, or What’s needed is an automated system other activities and metrics that may occur designed to handle the complexity and veloc- hundreds and even thousands of times a day. ity of these programs. And SAP can deliver it Moreover, the processes required for each are with an integrated set of solution extensions: unique – and all require that you have access the SAP® Incentive Administration application to accurate, trusted data. When you use man- by Vistex and the SAP Paybacks and Charge- ual, spreadsheet-driven processes to manage backs application by Vistex. 2 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  3. 3. Objectives Solution Benefits Quick Facts Use automated processes to recoup money from vendorsUse automated processes to recoup With SAP solutions, you can establish auto- Solution extensions from SAP are tested,money from vendors mated processes that will streamline how you certified, licensed, and supported by SAP for keep track of every kind of chargeback, compatibility with your SAP ERP application.Streamline and automate processes rebate, and other incentive program your The embedded nature of these solutionsto reduce days claims outstanding business participates in, such as: means you avoid the cost of interfaces, addi- •• Scan-backs tional infrastructure, and development of newAvoid profit leakage •• Purchasing rebates skill sets. As a result, the solution extensions •• Chargebacks enhance the benefits of your SAP solutionFacilitate compliance with auditors •• Damages and returns to vendor investments while minimizing risk andand internal controls •• Markdown allowances expense. Once deployed, these solutions work behind the scenes capturing real-time trans-Increase visibility and control action data, supporting the management of claims, and helping you control varied andCapture your share of vendor changing chargeback, rebate, and othertrade funds incentive agreements. The software can transform the management of recouping funds into a systematic, effective process. 3 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  4. 4. Objectives Solution Benefits Quick Facts Streamline and automate processes to reduce days claims outstandingUse automated processes to recoup Now you can have all vendor agreements,money from vendors regardless of type, in a single system that automatically executes the determination andStreamline and automate processes subsequent communication of claims withto reduce days claims outstanding manufacturers and vendors. Barring excep- tions, there is no need for human intervention,Avoid profit leakage which saves you massive amounts of time and helps you claim what’s due to your companyFacilitate compliance with auditors sooner – and get paid more quickly. If andand internal controls when discrepancies, rejections, resubmissions, disputes, and other delays in chargeback Thanks to all the time saved – andIncrease visibility and control claims settlement occur, everyone – including manufacturers and vendors – can go online vastly improved cash flow – theCapture your share of vendor and view the detailed data justifying your claim. software can pay for funds With immediate visibility into up-to-date data, issues get resolved more quickly and with little or no effort on your part. 4 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  5. 5. Objectives Solution Benefits Quick Facts Avoid profit leakageUse automated processes to recoup In many retail segments, margins are thin, The software also streamlines applyingmoney from vendors making it even more important to ensure that agreed-upon changes to chargeback, rebate, all chargebacks, rebates, and other claims are and other incentive agreements retroactivelyStreamline and automate processes captured and paid as quickly as possible. to the relevant time period noted in theto reduce days claims outstanding Leveraging these solution extensions helps change. It automatically reprocesses all pur- ensure that you capture all funds due to you. chasing and sales histories for transactionsAvoid profit leakage These products do the heavy lifting for you, that were not originally considered eligible capturing real-time transaction data in SAP but now are, given the retroactive change thatFacilitate compliance with auditors ERP identifying claims, and executing multi- , has been made to the governing agreement.and internal controls ple chargeback, rebate, and other incentive Similarly, when vendors drop prices, you can agreements simultaneously. By turning the retroactively apply the new pricing to coverIncrease visibility and control recouping of funds into a systematic, auto- your existing inventory and any open, unre- mated process, you can avoid profit leakage ceived purchase orders, as well as automateCapture your share of vendor across the business. the process of capturing any price protec-trade funds tions offered by the vendor. This prevents you from going “upside down” on your cost of inventory relative to the current market price. 5 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  6. 6. Objectives Solution Benefits Quick Facts Facilitate compliance with auditors and internal controlsUse automated processes to recoup Given the importance of vendor payments to alone can result in substantial savings everymoney from vendors the bottom line, many retailers hire third- year.) The software hovers above deal pro- party auditors to ensure that nothing has cesses, provides real-time deal auditing,Streamline and automate processes been missed. But this costs them time and a corrects pricing, and applies deals as salesto reduce days claims outstanding significant percentage of the new monies dis- occur, shipments move, and more. Because covered – typically 50%. With SAP Incentive you are always current on deals, you neverAvoid profit leakage Administration and SAP Paybacks and need to call in an auditor in the first place. Chargebacks, you can eliminate dependence And because the timing of deal complianceFacilitate compliance with auditors on auditing firms and keep 100% of all vendor is not delayed, you have better cash flow.and internal controls payments. (For a typical large retailer, thisIncrease visibility and controlCapture your share of vendortrade funds Retain all vendor payments without additional expense. Simple. 6 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  7. 7. Objectives Solution Benefits Quick Facts Increase visibility and controlUse automated processes to recoup One of the challenges retailers face is collabo- products in their category and 1,000 to 1,500money from vendors rating with the vast number of parties involved deals on these items per week. Now they can in deals: purchasing, finance, vendors, and see only those deals relevant to their cate-Streamline and automate processes more. Everyone looks at deals from a different gory – not all grocery deals – and sort andto reduce days claims outstanding point of view and needs to see different view their category’s deals as needed. information.Avoid profit leakage And if there is a discrepancy around a charge- To address this issue, the SAP Incentive back made to a vendor, the solutions facilitateFacilitate compliance with auditors Administration and SAP Paybacks and reconciliation before it hits the accountsand internal controls Chargebacks applications give all stakehold- payable process. Simply give vendors visibil- ers one place where they can go to get the ity into the software via a portal to see theIncrease visibility and control latest information – complete with various supporting transaction data and automated predefined views for different business roles. calculations (based on agreements) forCapture your share of vendor As a result, everyone can see what’s relevant themselves. This approach saves you a greattrade funds and ignore what’s not. For example, in the deal of the time, effort, and cost normally grocery category, managers who handle associated with discrepancy handling. breakfast foods may have 2,500 to 5,000 7 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  8. 8. Objectives Solution Benefits Quick Facts Capture your share of vendor trade fundsUse automated processes to recoup The software also helps ensure that you don’tmoney from vendors lose out on vendor trade funds that offset marketing and other types of costs. ThisStreamline and automate processes money often falls through the cracks becauseto reduce days claims outstanding of manual processes that make it difficult to track and capture funds. For example, a typi-Avoid profit leakage cal offer may involve a sliding scale whereby if you buy up to a certain amount of goods, youFacilitate compliance with auditors get a corresponding amount back from the Why burden employees with figuringand internal controls vendor in trade funds. The software tracks these types of programs for you, automates out complex offers when theIncrease visibility and control the process of accepting offers as you qualify software can do it automatically? for them, and executes requests for payment.Capture your share of vendortrade funds 8 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  9. 9. Objectives Solution Benefits Quick Facts Boost your profit marginsBoost your profit margins With SAP Incentive Administration and SAP •• Limit profit leakage and capture charge- Paybacks and Chargebacks, you can boost backs, rebates, and other claims as quickly your profit margins by systematically and as possible accurately recouping all funds due from manu- •• Eliminate tedious manual tasks facturers and vendors. If you’re still managing •• Consolidate all vendor agreements, regard- chargebacks, rebates, and other incentives less of type, in a single system manually or with piecemeal systems, you’re •• Improve collaboration with business leaving a lot of money on the table. With SAP partners, internal departments, and other Incentive Administration and SAP Paybacks stakeholders and Chargebacks, you can: •• Strengthen vendor relationships by resolving issues quickly and facilitating reconciliation of discrepancies Everyone wants to do business with companies that are fair, cooperative partners committed to living up to their agreements. 9 / 10 © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  10. 10. Objectives Solution Benefits Quick Facts Summary Solution Using an integrated set of SAP® products, you •• Online collaboration with vendors to create can establish automated, integrated processes agreements and obtain approvals that streamline the tracking and management •• Automatic execution of claims and charge- of all types of vendor-driven chargeback, backs according to the terms and condi- rebate, and other incentive programs. You can tions of the agreement, without the need give vendors direct access to data, cut manual for human intervention work, and eliminate the need for costly audi- •• Real-time visibility for key stakeholders, tors. Leveraging tight integration with the SAP internally and externally ERP application, these solution extensions can prevent margin leakage, increase cash flow, Benefits and boost your bottom line. •• Faster claims recovery by streamlining and automating deal tracking and execution Objectives •• Lower claims recovery costs •• Mitigate persistent margin leakage •• Minimized profit leakage via consistent •• Improve relationships with vendors capture of all monies due •• Gain accurate insight into chargeback, •• Improved cash flow by accelerating dis- rebate, and other incentive monies due crepancy resolutions and the collection of •• Speed up discrepancy resolution processes, monies due increasing capital requirements For More Information For more information, contact your SAP sales representative or visit us online at /index.epx. 10 / 10 CMP14215 (13/03) © 2013 SAP AG or an SAP affiliate company. All rights reserved.
  11. 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 for additional trademark information and notices.