Financial Rewards: The Heyman Corporation and 9ci, Inc. Collaborative Experience.

For many credit professionals today, a sizable portion of your trade receivable can be attributed to the growth of unresolved customer deductions and invoice disputes. Various studies have shown that up to 80 percent of all deductions are legitimate and most often preventable. Preventable deductions generally result from compliance violations, freight infractions and pricing issues, to name a few. Contrary to unauthorized deductions, preventable deductions can be characterized as the cost of doing business poorly.

Deductions can often be prevented through sound, proactive business practices and solid technology. It is from the proactive prevention of this group of deductions that companies can often add hundreds of thousands of dollars, and in some cases millions, back to their bottom line.

Take the case of Heyman Corporation, a mid-size apparel manufacturer in Vernon Hills, Illinois that produces apparel under licensed names like OshKosh B'Gosh, Disney and Warner Brothers. Like so many other companies that sell to mass merchants and department stores, Heyman had significant deduction issues. The investigation and tracking of incoming deductions was draining resources, and continued to rise at an alarming rate. In 1999, deductions more than doubled from the year prior. It became clear that a plan was needed to combat this never-ending assault to the bottom line. A program, written and developed by Corporate Credit Manager Michelle De Napoli, CBA, appropriately titled "Getting Connected" was put into place. "'Getting Connected' has a simple philosophy of connecting with your customer, internal and external, and understanding and communicating the tasks needed to comply with customer requirements," says Michelle De Napoli. Heyman Corporation collaborated with 9ci, Inc., a deduction management and automated cash application software provider, to achieve their goals.

Heyman Corporation utilized the following strategies and solutions to gain control over its deductions.

Senior Management Buy-In

Michelle De Napoli says, "First and foremost, you must have senior management buy-in. Without a commitment from the top, there is a low probability that a cross-functional effort will succeed." You must enlighten senior management to the controllable nature of your deductions, demonstrate the cost of these deductions to your company and build a solid business case for implementing a deduction software solution. John Kuhn, the Chief Operating Officer of Heyman Corporation says, "The first step is to realize that the proper management of the entire deduction process is just as vital in today's business environment as managing your receivables or inventory. Companies that cannot look at the overall profitability of a customer relationship, including the impact of deductions and the cost of compliance, and do something about it, are at a significant disadvantage."

Customer Requirements & Compliance