Supplier Ship and Debit

Here you can understand what distributors can do using Channel Revenue Management.

Channel Revenue Management on the buy side is a supply chain management application that can help prevent margin leakage in your channel business processes with greater efficiency. With supplier ship and debit, distributors can:

• Centralize ship and debit programs from suppliers.

• Automatically apply eligible supplier programs at order capture.

• Automate accruals tracking and claims processing.

Supplier Ship and Debit Overview:

Centralize Supplier Programs

Use Channel Revenue Management as your hub to manage ship and debit agreements from suppliers. You can:

• Capture program details including the supplier, effective dates, and supplier authorization number.

• Define customer eligibility and product eligibility.

• Support accruals based on amount, new cost, or percentage basis.

Automatically Apply Eligible Programs at Order Capture

Sales can see eligible supplier programs and calculate channel discounts providing margin visibility before they book an order. Accruals can be included in margin calculations.

Automate Accruals Tracking and Claims Processing

For many distributors, profitability is determined by the ability to track and collect supplier incentives. Channel Revenue Management automates accrual tracking, providing you with real-time visibility to the earned, collected, and balance accruals, for each program. Earned accruals are tracked in channel's subledgers and posted to the general ledger. Real-time supply chain integrations provide accurate supplier balance tracking and compliant accounting practices. You can:

• Improve your productivity by generating and processing supplier claims online. Accruals are relieved in General Ledger after claims are approved, and pending settlement.

• Settle supplier claims through Payables and automatically close the claim.

Supplier ship and debit is the process by which a distributor ships goods at a lower than usual price to the customer and debits the supplier for the additional discount from the acquisition price. The additional discount is claimed from the supplier.

These are the four basic steps for a distributor:

1. Request a Ship and Debit Agreement from Supplier

   The salesperson for the distributor can request this new price or can decide on this price to win a deal in hopes that it will be approved. To debit the supplier for the difference, the distributor requests a special price from the supplier. If the supplier approves, a supplier ship and debit program can be created and sales are made against the program.

2. Ship to Customer

   The distributor ships to the customer and earns the accrual. Accruals are calculated.

3. Claim Debit from Supplier

   The distributor creates a claim with a matching debit memo or a supplier invoice to pay back the transactions (if it is a supplier rejection), in Payables. Payables issues a debit memo or invoice to the supplier.

4. Settle Claim

   The issuance of a debit memo (or payment against the supplier invoice if it is a supplier rejection) closes the claim.