Manage Short Payments/ Unauthorised Deductions
How does it work?
A deduction occurs between a customer and a supplier when the customer refuses to pay all or part of the amount on an invoice. Examples of this are:
- The customer short pays the invoice.
- The customer states they will not pay the invoice.
- The customer takes a deduction.
Benefits
Managing short payments or unauthorised deductions manually can be a time-consuming activity for collections staff. They have to remove the associated invoice from the next dunning run and go about resolving the issue as quickly as possible to ensure collection activity can continue.
They then need to match up the short payment to any credit notes or disputes that may be held in other systems. Some companies are even resorting to increasing staff headcount to discover the source of these short payments. The impact of short payments is the accumulation of large volumes of low value uncleared items on the AR ledger, which cause a headache for any receivables management process.
CVG Value+ automates this process, automatically matching up disputes, deductions and credit notes together leaving only unmatched short payments for the individual attention of a collector.
Unique Functionality
- Auto-match: CVG Value+ checks if the deduction can be matched to an existing dispute (based on Debit Number and Claim value). If a match occurs: Upon matching this dispute to the unidentified deduction – the unidentified deduction is closed and the dispute gets a tick-box ticked called “Deduction Taken”.
- Partial match: CVG Value+ checks if the deduction can be matched to an existing dispute (based on debit number and claim value). If no match occurs but other disputes are listed on the account, a list of disputes are provided so the collector can perform a manual match-up. Upon matching this dispute to the unidentified deduction – the unidentified deduction is closed and the dispute gets a tick-box ticked “Deduction Taken”.
- No match: If a match cannot be made, the unidentified deduction can be ‘transformed’ into a dispute by changing the activity type.
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Bridging the Gap
The tighter economic conditions have prompted businesses looking for competitive advantage with their customers to implement best practice software that integrates AR credit and collections with customer service management, as Dickie Bielenberg explains.
