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Scenario for Managing Deductions for Account Promotions

The account manager for a food and beverage manufacturer sets up an account promotion to feature your company's line of gourmet coffee products at a chain of grocery stores. The account 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 account manager arranges for the grocery chain to deduct those costs from the next invoice that is received from your company.

Next, the account manager opens the Siebel Consumer Goods application to preauthorize the deduction. He selects the plan that he created for fall account promotions at the grocery chain and adds a new record for the gourmet coffee account promotion. After entering relevant information about the account promotion, he enters the names of the four gourmet coffee products and allocates funds for each product. He allocates $2,500 to each product (one-fourth of the total cost for the account promotion). In 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 and a debit memo referencing the deduction. The accounts receivable department notes the $10,000 discrepancy and creates a deduction record in Siebel Consumer Goods.

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

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