DM 11: Calculate and process accruals and payouts

📽️ Check out a video demonstration for this use case, here.

Use Case Situation Description

Calculating and processing accruals and payouts in the discrete manufacturing industry can provide several benefits. Firstly, it can improve accuracy and timeliness in rebate and incentive payments, ensuring customer trust and loyalty; it can reduce the risk of errors in manual calculations, saving time and resources, and it provides transparency in the payment process, improving customer relationships and satisfaction. In Pricefx you can do all that along improving profitability by ensuring that payments are accurate and timely, maximizing revenue and minimizing costs.

User Role(s) and Business Objective

Finance, Controlling

Business Objective:

Automate the calculation of accruals and payouts and have audit-proved processes.

Complication

Manual and error-prone calculation and process with limited audit-trail.

Capability Needed

Fully automated calculation and process of accruals and payouts. Provide end-to-end management of the rebate, payout, and accrual life cycle.

Benefit(s)

Automated calculation of accruals and payouts
Audit-proved accrual and payout process including approval and audit-trail.
Less / no calculation errors and less discussions with customers

KPIs

None

Calculations

None

Prescriptive Design Requirements

Coming soon

Functional and Non-functional Requirements

Reporting and Dashboards

Measures, Calculation and Decision-making KPIs

Scope Validation and Project Readiness

User Stories

Coming soon

Epic:

Data Requirements

Coming soon

Out-of-Scope

Coming soon

Solution Design

In this use case we are looking at how the Rebates capability in Pricefx can help you calculate and process accruals and payouts. By doing so, players in the discrete manufacturing industry can help track and manage financial transactions, ensuring that they are meeting their financial obligations and protecting their margins. Additionally, this process provides visibility into the performance of rebate and incentive programs, enabling companies to optimize their pricing strategy and improve customer satisfaction. Automating this process can also help improve efficiency and reduce errors. A centralized system for managing these transactions can improve compliance and enable better decision-making.

Good to know: Some of our screens may be different as we are in a demo envionment.

LEARN MORE: To know more about Rebates, click here.

Situation description

So in the current state we have manual processes resulting in possible errors and little to no auditing capabilities with that. Our future opportunity is automating those calculations for accruals and payouts and providing an end to end solution from setting up the rebate to accruing all the way down to the customer payouts. The benefits are automation and eliminating manual work auditing capabilities for the accruals down to the payouts and then no more errors resulting in less backtracking with the customer.

Workflow: Step 1 - Rebate agreements

Let’s switch over to the Pricefx system and take a look at how this works.

To access the customer rebate for Stanley Linda, we will navigate from the Pricefx home screen to the Rebate Agreements section. This rebate is set up for a single customer and is valid for a 2-month period, with payouts made the following month. The rebate details show a fixed percentage agreement of 2%. By scrolling down, we can view the rebate records and see that the rebate ID is 2987.

This provides more details on how the $3700 rebate was accrued and is expected to be paid out. If you want to see how the payout was actually made to the customer, you can access the payout records for the rebate, in our case number ID 2987.

This makes it easy to track and manage customer rebates, ensuring compliance and customer satisfaction.

Workflow: Step 2 - Payout records

By pulling up the rebate ID 2987, we can see a list of all the payout records associated with the rebates.

These payout records represent every individual item that the customer purchased, with a flat fixed percentage of 2% on all revenue.

This means that every item is rebated at 2%, and this is the amount that was accrued and paid out to the customer.

This entire process is automated from the initial setup, but all the information is available for auditing purposes. Overall, this makes it easy to track and manage customer rebates while ensuring accuracy and compliance.