Why Manufacturers Are Overpaying On Partner Submitted Claims

By Alex Weinbaum, Computer Market Research

Ineffective management of partner submitted claims contributes to a host of problems for manufacturers. Manual management of enormous quantities of channel data (with Excel spreadsheet) puts manufacturers in an extremely vulnerable position; it extends far and wide within the infrastructure of an organization, hurting productivity and the reconciliation of imperative information that directly impact periodic forecasting, allocation of resources, budgeting, and overhead/operational expenses.

Full-time employee’s sit in front of spreadsheets trying to manage disparate partner data feeds, determine approvals, and authorize payments for hundreds or even thousands of pricing programs yearly, with many overlapping (or duplicating) each other. This level of adoption simply falls short, unable to sufficiently reign in processing costs while increasing issues with budgeting, resource allocation, and cash flow.

As with all manual processes, there are inevitable break downs and/or missing elements in critical areas that directly impact the financial status of your company, for example:

• accuracy and consistency — resulting in erroneous claims and overpayments
• valid audit trail — electronic process storage and retrieval of data
• reporting — net revenue and sales reports (ROI) with quantifiable metrics

Ultimately, the indirect sales funnel is far too complex to handle backend rebates without a robust, fully responsive pricing management system in place. Without the technical capacity to accurately approve and validate partner claims, while effortlessly referring back to each POS transaction, understanding the true financial status of a business is flawed.

Here are some of the areas manufacturers leave themselves most vulnerable in without an automated partner claims management process:

• Claim overpayments — keeping track of partner incentive programs and submitted claims manually (i.e., on spreadsheets) guarantees inaccurate accounts payable.
• Unreliable reporting — manual data collection greatly increases erroneous calculations of net revenue; furthermore, inability to track each transaction of current and historical POS data deteriorates demand forecasting and overall business productivity.
• Inaccurate program reconciliation — without a price management system that auto-matches volume commitment thresholds or incentive rebate requirements, you have little to no validation into best performing partners, most profitable programs or accuracy into estimations of monthly/annually payments to partners.
• Operational inefficiency — manual processing of claim-form data means your team is allocating an unnecessary amount of resources and overhead into claim management. With price management automation, workforce can allocate their labor into other (more important) revenue generating activities.