Through a special arrangement, presented here for discussion is an excerpt of a current article from The Journal of Trading Partner Practices (JTTPP), the official online publication of the Vendor Compliance Federation (VCF), the Trade Promotion Management Associates (TPMA), and the Federation of Credit and Financial Professionals (FCFP).
As the transformation from manual to automated deduction management systems becomes more prevalent in the consumer products industry, the skills required of credit and financial professionals is likewise evolving with the times. According to Yessine Alvarez, director of client services at Smyth Solutions, "the demand for human capital has been characterized by the need to acquire employees with greater analytical and managerial skills, since most of the processing is done by the automated systems."
Ms. Alvarez, who is also president of the Federation of Credit and Financial Professionals (FCFP), said the trend of companies consolidating back office or revenue functions and creating shared service and customer financial service organizations is happening more and more. She added that the actual skill set of staffs and departments is shifting from training in the discipline of managing deductions to technology and system training.
Ms. Alvarez noted that the technology has become so sophisticated that much of the A/R and deduction reconciliation functions that required a great deal of human intervention in the past are being automated via A/R workflow systems. Therefore the skill sets of those employed in the field are changing.
Managers who previously were not involved in chargebacks can step into the position of a chargeback specialist by understanding the details of an A/R/ workflow system. Technologies that provide workflow and reconciliation can allow a staff member to process a deduction using detailed, matched and reconciled information, whether it's a shortage, deduction, returns deduction, etc. Such systems can save companies hundreds of thousands if not millions of dollars by better matching and reconciliation; however they will require current staff to understand technology and to elevate their roles to more strategically manage business processes.
Increased regulatory compliance requirements (such as Sarbanes-Oxley) will also speed the movement toward automated workflow programs. Ms. Alvarez noted that those who manage chargebacks and deductions have visibility and awareness into company errors and shortcomings as well as into the specific requirements of their retail customers, which may be the most valuable knowledge managers have because it provides insight into other departments and facets of the organization. Leveraging the opportunity that technology brings to get away from transaction-based work and further into strategic business-process change management associated with reducing chargebacks can enable individuals steeped in chargeback knowledge to create a broader role for themselves within their organizations.
Discussion Question: What shortcomings have you noticed in how vendors are handling chargebacks and deductions? How will the arrival of automated deduction management systems impact the deduction management process and vendor/retail relations? How might the duties of credit and financial professionals be altered?