Costly invalid claims

CP manufacturers need to validate that the conditions for the contract have been met in order to release the off-invoice price on the purchase order or to accept or chargeback the claim/deduction to the distributor as an invalid settlement once the back-up detail has been obtained and reviewed. The validation task is administrative and usually performed by an entry level/low paying position.  

The validation process requires the review and validation of a large amount of volume purchased and comparison with purchase orders. In the case of a settlement, you must validate that the conditions have been met using the claim backup detail. 

The median percent of invalid deductions taken by customers was 5.1% - 10%, with nearly 40% reporting invalid deductions of 10% or more.

– Attain Consulting Group

Putting some “best practices” in place for claim auditing Group 3797.png can help lessen or prevent a financially damaging impact.

As described, there is a back-office labor shortage similar to what is happening on the production lines and in other supply chain areas. When these roles go unfilled, the validation process is either not occurring or is not as diligent as it needs to be to prevent revenue leakage.

Cost Roller Coaster &
Keeping Margins Whole

Keep your
eyes open

The proof is in the
pudding or the margins

Peeling back
the onion

The Tangled Web of
Complex Markets

The heat 
is on

The dominoes
are falling

Palatable management
of complex markets

Labor Wading Pool:
Manual Processing

It takes
the cake



It’s a
new day