For companies seeing hundreds or thousands of customer deductions per month, processing claims has become critical to maintaining their bottom line. Suppliers for major retailers like Walmart and Amazon can face deductions for everything from unmatched paperwork to packing and transportation issues, damaged shipments, shipping delays, and goods not received.
As a supplier, you will probably already know all about customer deductions and how they quickly erode your bottom line. According to a 2021 report by Attain Consulting group, up to 10% of non-trade-related deductions are invalid.
What you may not know about these deductions, however, is that their nature can vary according to the retailer issuing them and the types of chargebacks and deductions being issued in the first place. Minor differences in formatting and process from customer to customer creates frustration and inefficiencies when manually processing claims.
What You Need to Know About Customer Deductions
Let’s dive deeper into the differences between claims, deductions, short-pay, and chargebacks with a few examples, starting with retailer claims. Some retailers post deductions on portals before payment is affected, which gives vendors a brief opportunity to dispute deductions and successfully preserve their payments.
In general, deductions, also known as chargebacks or short pay, appear as short payments on an invoice. So, if you receive $30 in deductions on a $120 invoice, you’ll be paid only $90 on a check remittance.
Lastly, chargebacks are applied to future payments rather than to current invoices. Thus, a chargeback issued for a violation in February may only reflect in an April payment, and so on.
One thing to note is that while terminology and processes have slight nuances from one supplier to the next, the impact of these deductions all affect your company financially. The difference we have seen is how proactively one company will handle deductions processing versus another.
Understanding the Challenges Posed by Customer Deductions
In an ideal setting, a supplier’s workflow would immediately address claims before they are able to affect payments.. Addressing deductions while they are still in their early stages gives businesses the best chances of successfully disputing them and winning back their revenues.
However, due to a variety of reasons, we find many companies are not able to do this. This is particularly true for vendors that service large retailers like Amazon, who can issue thousands of claims in a single month.
Most teams tasked with handling thousands of claims simply run out of time to address them all, and this delay allows those claims to become deductions, which adds additional strain to teams and creates extra paperwork-related headaches in the long run. Wait long enough and the window to dispute simply closes.
Deductions Processing Automation is the Solution
It’s easy to understand why so many suppliers and distributors fall behind on their claim management processes and allow claims to become aging deductions and chargebacks. Most companies simply don’t have the staff, the time, or the resources to constantly validate and dispute claims on top of their many other essential projects and responsibilities. Even if they hire extra staff to resolve claims, these staff members prioritize the larger claims due to time constraints, leaving accumulating sums of money on the table in the process.
At the end of the day, the key to successfully handling deductions is prioritizing workloads. This can be done manually, but the chances are that you will need to hire additional staff or outsource the management of your chargebacks to a third-party agency in order to get the job done.
iNymbus provides a simpler solution. Our technology allows you to transfer 100% of the claims issued to your organization to RPA-powered bots, who do all of the work on your behalf. Our automation technology allows you to focus on clearing customer deductions that become escalated while minimizing your worries related to the further escalation of claims.
iNymbus: Automated Customer Deductions Processing
iNymbus provides an innovative service that eliminates the need for suppliers to manually process retailer and shipper claims. We use cloud robotic process automation, artificial intelligence to instantly read retailer portals, gather and prepare claim paperwork, and upload complete claim packets to the correct vendor portals automatically.
The system performs all of these tasks without requiring direction, assistance, or intervention from human staff. It also maintains vendor compliance at all times according to each supplier's business rules. Once we have programmed our bots to your business’ specifications, they will be able to complete all of these steps autonomously to save you time and manpower hours alike.
Our solution informs the bots of the status of each individual claim or deduction and presents it on the iNymbus dashboard for you to access and view at any time. This system enables you to leave claims to be processed automatically by RPA, and to instead focus your time on handling and reclaiming vendor chargeback losses.
Contact Us for a Demo Today
iNymbus empowers your business to optimize vendor compliance while handling shortage and chargeback disputes automatically using the power of RPA. Our solution reduces the time needed to organize and file a single claim from 15-30 minutes to 30 seconds per claim. This time savings translates to huge dollar savings.
If you’d like to see our software in action validating and solving claims, contact us to ask about our paid pilot and demo programs. Our obligation-free 30-day trial gives you a chance to witness the power of RPA for yourself and to find out if your chargebacks and deductions are at the amounts and volumes where dispute and resolution automation will pay you back in spades.