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Scenario for Managing Promotions Deductions

The key account manager for a food and beverage manufacturer, is setting up a promotion to feature your company's line of gourmet coffee products at a chain of grocery stores. The promotion includes a provision to reimburse the grocery chain for the cost of purchasing newspaper advertisements and creating signs to publicize a sale on your coffee line. Rather than authorize a payment to cover the advertising and sign expenses, the key account manager arranges for the grocery chain to deduct those costs from the next invoice it receives from your company.

Next, the key account manager opens the Siebel Consumer Goods application to preauthorize the deduction. He selects the plan he created for fall promotions at the grocery chain and adds a new record for the gourmet coffee promotion. After entering relevant information about the promotion, he enters the names of the four gourmet coffee products and allocates funds for each individual product. He allocates $2,500 as the cost of promoting one product (one-fourth of the total promotion cost). Within the fund allocation record of each coffee product, he preauthorizes the deduction.

One month later, the grocery chain returns its payment for a $45,000 invoice from your company. It sends your company a check for $35,000, along with a debit memo referencing the deduction. The accounts receivable department notes the $10,000 discrepancy, a deduction record is created and passed to Siebel Consumer Goods.

The next day the key account manager brings up the list of deductions for the accounts he manages, and sees the new deduction record. Because he preauthorized the deduction when he allocated promotion funds, the allocated funds are available to resolve the deduction.

The key account manager then researches the deduction, including verifying the terms of the promotion and resolves the deduction by applying the fund allocation to cover the $10,000.

Siebel Consumer Goods Guide