Increase Cash Flow by Reducing Deductions
Everyone wants to be paid for the services and products they sell, but this isn't always the case. Customers regularly pay vendors an amount less than the actual invoice was billed for without explanation. We, acting on the vendors behalf, will investigate the reason behind the partial payment and when appropriate, contact the customer for full payment.
In accounting language such a 'partial payment' transaction is called a 'short payment.' These short payments can create a significantly negative effect on cash flow and the business' bottom line.
Our process always starts with an investigation that will determine if the deduction taken—the one that resulted in the short payment—is valid or not. If an investigation shows that the deduction is valid, a credit memo is generated which will clear the deduction. If the deduction is invalid, a bill back notification is generated. Bill back notifications should then be followed up on for payment until payment is received, or a settlement is reached. Our ability to seamlessly pass this to our collections teams simplifies the process for customers.
The age of a deduction plays an important role in reaching a resolution. Most customers will only research a deduction that is no greater than 12 to 24 months old. Time limitations can also be due to the ability to get the required documentation for resolution. For example, freight carriers will typically only provide Proof of Deliveries (POD) for up to a year, and since this is typically a required document for resolution, this industries deduction management must be addressed within 12 months of the service being provided. Our extensive experience across many industries allows us to guide our clients to the most effective process and timing.