As this time of crisis evolves, executive leadership across the globe is seeking deeper insights into risk management across the enterprise. One of the top concerns of CFOs today is protecting cash liquidity and capital resources. Contra revenue costs relating to special pricing discounts, rebates, and MDF spend directly affects the bottom line. Based on studies and past auditing experience, manufacturers are paying annually between 5 – 10% or tens of millions in excess incentives and rebates – resulting in lost profits and a negative impact on financial reporting and shareholder value.
Adjustments to remote work environments, in some cases furloughs, both internally and at your channel partners increases over-payment risks. Given disturbances in normal working conditions, process and control procedures are vulnerable and bad behaviors around deep discounting or over-claiming incentives may be rationalized because of financial instability. During difficult times, there tends to be an increase in special pricing requests and claims abuse.
Traditional Sales Operations Role in Claims Processing
Sales Ops teams are busy reviewing and processing claims and are dealing with internal and external partner questions and issues. Given the sheer volume of transactions, Operations’ primary focus is around processing claims quickly and providing visibility to the channel partners on what claims have received credits and which are still outstanding. This impacts their ability and bandwidth to assess whether the channel partner is submitting valid underlying transactions. When being asked to do more with less, just performing the duties to keep operations moving is usually the focus.
Protect Liquidity and Conserve Capital by Stopping Excess & Ineligible Claims
Leadership needs to have comfort that incentive discounts, rebates, and MDFs are appropriate and accurate. Due to the manually intensive nature of claim documentation reviews, along with traditional processes that have been set up to ensure speed on claims and special pricing approvals, there has been limited focus on verifying claims and special pricing. As a result, both erroneous and fraudulent activities go undetected resulting in tens of millions of dollars being lost. Performing verifications of special pricing requests and claims will result in managing your contra revenue downward and increasing your profitability.
Questions to Consider:
- What reasonable actions are you taking to verify special pricing requests are valid?
- Do you have higher risk regions or partners that require additional diligence?
- Are you proactively contacting the customer to verify deal details?
Increase Margins with a Solution powered by ConnorX
Recognizing that automation and expertise are both important in establishing a process to verify special pricing and claims, we have developed our claim verification solution, powered by ConnorX — a multi-channel engagement platform backed by fully-managed services designed to boost your claims verification efforts to deliver more verified claims faster and cheaper.
Our data-driven approach will result in increased confidence in claims submitted by your channel partners, increase your profitability, and combat incentive abuse. Connor provides white-gloved business process outsourcing (BPO) services providing real-time special pricing request verifications, claims validation, and end-customer verification leveraging our technology platform supported by expert auditors.
Click here to learn more about how to digitize your claims verification process in less than 7 days!