For, distributors, the

chargeback process can be

complicated, slow, and
costly. With SAP ERP and
Vistex Incentives and
Paybacks Module (IP), you
can
streamline the process
speed up the recovery
of funds from
manufacturers
improve cash flow
reduce the cost of
goods sold.






















Solution Brief

CHARGEBACK MANAGEMENT

Chargebacks occur when a distributor negotiates agreements
with a manufacturer, or with an end customer for special
pricing or spending programs. The manufacturer may also
negotiate agreements directly with an end customer. The
product is sold to the end customer at a special price or the
distributor incurs expenses based on the negotiated spending
program. The distributor files a claim with the manufacturer.
The manufacturer audits the claim and sends a payment to
the distributor.





Agreement


Manufacturer


Distributor


Customer
Payment
Claim
The Challenge of Chargebacks

In an era of heightened competition, manufacturers and
suppliers frequently offer special pricing to customers.
To do so with the speed and agility needed in todays
markets, they frequently ask distributors to provide their
products to end customers at prices below the actual
purchase price paid by distributors. The distributor
recoups the difference between its acquisition cost and
the customer sales price through the Chargeback
Process, which results in a rebate payment from the
manufacturer to the distributor.

Although the process may seem straightforward, it can
often be complicated and labor-intensive. Pricing
agreements offer incentives at various levels of the
supply chain. The incentives may be offered as
warranty recoveries, marketing funds, pricing-related
credits, etc. These arrangements are formalized in
agreements that can span multiple customers, cover a
vast array of products and can have multi-year validities.
They can change frequently, and even be modified
retroactively.

Keeping track of it all can be a real challenge- and too
often, wholesale distributors find themselves doing so
with a collection of basic tools, such as spreadsheets, e-
mail, faxes, and phone calls. That makes it difficult to
ensure thoroughness and accuracy, which in turn causes
you to miss opportunities to file claims, or to become
caught up in disputes and lengthy cycles of rejections
and resubmissions that increase days chargeback
outstanding- all of which drives up costs and impairs
cash flow and profitability.

The chargeback/claim data is reported to the
manufacturer in a variety of ways, most likely, as an
electronic transmission. Distributors look for
streamlined, automated processing of these claims and
rebates.




















Taming the Complexity

The answer to this complexity is Vistex Chargeback
Management. The solution helps you bring order to a
complex and error-prone process. Chargeback Management
is an application of the Incentive and Payback Module
(IP), a comprehensive, integrated set of solutions designed
specifically for your industry.. Leveraging the software of
SAP and Vistex, and drawing on their experience, the
solution lets you capture chargeback data, manage claims,
control varied and changing chargeback agreements- and
ultimately, transform chargeback management into a
systematic and effective process.

With SAP and Vistex, you can manage the entire chargeback
life cycle, from initiation to settlement, and minimize manual
intervention to bring new levels of efficiency and accuracy
to the process.


The software enables you to:

Create and manage a variety of agreements with
multiple suppliers and customers

Apply evolving agreements on an ongoing basis to
maximize chargeback recovery

Automatically submit claims using flexible settlement
parameters and calendars

Communicate with partners via EDI and/or web
portal technology

Park documents to give suppliers a broader
opportunity to review and approve claims.

Handle interim settlements to accept approved
amounts quickly, without waiting for final resolution

Produce timely reports and establish a full audit trail
for chargeback activity to support corporate
accounting and compliance efforts

Use multiple currencies and units of measure in the
chargeback process

Monitor and reconcile outstanding chargeback claims
using flexible search criteria

Support a multi-tier distribution model where initial
shipments are received in consolidation centers and
subsequently shipped to branch locations, and onward
to end customers

Utilize the reported chargeback data to control various
performance programs such as administration fees,
market share rebates, etc.

Aggregate chargeback document data in Logistics
Information Structures and provide extract structures
for SAP Business Warehouse

Provide a holistic overview of chargeback agreements
with complete visibility at customer and product level
using a Checkbook approach


The solution is fully integrated and embedded in SAP
ERP. As a result, you can include documents from other
enterprise processes, such as sales and procurement, in the
chargeback process. And you can easily use chargeback
information in your finance and other enterprise
processes. For example, chargeback recoveries may impact
incentive payouts to employees.

The complete integration of Vistex and SAP also means
there are no interfaces and up-front integration costs to
manage, and ongoing maintenance and upgrades are
seamless. And because SAP ERP is based on the SAP
NetWeaver platform, the solution offers easy integration
and flexibility in virtually any IT environment all of
which helps ensure a low total cost of ownership.




































The Payoff of a Streamlined Process

With SAP and Vistex, you can manage Chargeback claims
with lower costs and fewer resources, and shorten
turnaround time throughout the Chargeback process.

Overall, the software can help you to:

Reduce the number of missed chargeback
opportunities

Reduce days chargeback outstanding to get payments
in hand more quickly to improve cash flow

Reduce the cost of goods sold

Link up real time with Financials to record accruals
and settlement of chargebacks in full compliance with
current financial regulations

Reduce labor costs and get more productivity in
Claims Processing

Provide a more transparent, closed loop process to
manage Agreements and Chargeback Claims

Provide a complete financial and profitability picture
of the various agreements


In summary, the combination of SAP and Vistex enables
you to manage the complexities of Chargeback
management, to efficiently provide a key service to your
manufacturers, and to strengthen your companys ability to
compete.


Typical Chargebacks Lifecycle




www.vistex.com




Vistex, The SAP Pinnacle

Your organization has invested in SAP solutions. Your
investment needs to yield more value.

Vistex provides packaged solutions and services that
extend core SAP functionality and add dramatic value to
your SAP investment.

Powered by SAP NetWeaver, Vistex delivers stylish,
innovative add-ons to SAP functionality that allows
customers to fully exploit the strengths and potential of
their SAP systems. We leverage our extensive business and
technical expertise to deliver unprecedented solutions to
SAP users that demand more value from their installed
SAP systems.

Our flagship product, the Incentives and Paybacks (IP)
Module, is comprised of two fully-integrated embedded
SAP add-on applications, SAP Incentives
Administration by Vistex and SAP Paybacks and
Chargebacks by Vistex, both of which have been
branded as Global Solution Extension Products by SAP,
licensed and supported by SAP through the SAP Service
Marketplace since mid-2004. These solutions have been
implemented by several SAP customers to better manage
Incentive Compensation, Rebates, Paybacks/Billbacks, and
Chargebacks. Our newest solution, Foundation Data for
SAP streamlines the maintenance of pricing structures and
material, customer, and vendor master data.

Founded in early 1999 and headquartered in Chicago,
USA, Vistex solutions have been deployed by several SAP
customers. Since its inception, Vistex has a proven track
record of partnering with SAP to exceed customer
expectations. Located across USA, Germany and India,
our professionals are dedicated to providing high end
customer support and services.

To learn more about how Vistex solutions can help you
drive business performance in your SAP environment, visit
www.vistex.com








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or its subsidiaries in the United States and other countries.

SAP products and services mentioned herein as well as their respective
logos are trademarks or registered trademarks of SAP AG in Germany
and in several other countries all over the world. All other product and
service names mentioned are the trademarks of their of their respective
owners.


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