Case Study 2

 Case Study: Lost rebates and advertising allowances

The Problem:
Retailers, especially grocery retailers, operate on extremely narrow margins. Therfore, they can’t afford to miss any rebates or advertising funds offered by the vendors. Tracking sales to claim these rebates and allowances isn’t easy and some of our clients miss these opportunities. This situation is complicated by the fact that rebate and marketing support funding programs provided to large grocery retailers are often not well defined and program specifics aren’t always documented.

The programs themselves tend to be complex and not easily compatible with different accounting systems to track the funds earned. Additionally, the retailer’s systems allow a variety of ways for these programs to be set up but some do not necessarily provide an automatic way to alert the buying staff of potential program updates. For example, if the retailer establishes a rebate/marketing program to track items purchased to accumulate funds earned, the addition of new items doesn’t flag the buying staff to review for inclusion.

The Solution:
CPRS excels when it comes to discovering lost rebates and overlooked advertising allowances. We recently completed an audit for one of our clients utilizing a legacy system that didn’t lend itself to programming modification to track the needed information to collect the rebates and advertising allowances. By focusing on the largest volume vendors, CPRS assigned experienced audit teams to complete the normal post audit functions then carry that knowledge forward and perform the analysis of all funding programs. Working with the client’s buying and accounting groups, a standard procedure was put in place to obtain fund definitions, programs, vendor reconciliations, and allow open, on-going communication between the individual groups involved.

The Results:
The first major vendor audited using the “new” standard procedure netted recoveries of over $800K—and there’s more to come. Additionally, taking advantage of this intelligence and CPRS’ recommendations, this vendor is now well positioned to take the rebates and advertising allowances as soon as they are earned rather than wait for auditors to comb through their records after the fact.