Five years ago, I wrote an article entitled “Twenty-Five Tips on Deduction Management.” This article resulted in several speaking engagements for me. I ran across this article quite recently, and I was amazed by what I read and by what I didn’t read. Only 1 of the 25 tips addressed credit automation and more specifically deduction management software. That 1 tip was exactly 25 words long. It read: “Develop your own, or purchase commercially available software that allows you to track the status and the actions taken to address and resolve customer deductions.”
If I were going to write this article again, the main focus would be the effectiveness of deduction management software. I would focus on how deduction management software has matured and is now a ‘need to have’ rather than a ‘nice to have’ tool for many credit departments — especially those whose customers routinely and aggressively take deductions.
I have said before that the ‘worst thing’ that can happen when a customer takes a deduction is they may eventually have to repay a deduction taken in error. However, in the mean time, the customer gets what amounts to an interest-free loan from your company. The key question is how long that interest-free loan will remain outstanding.
Without a tool that enables your team to systematically address customer deductions, managing customer deductions is like trying to hold back the incoming tide with a mop and a bucket. What is the solution? In my opinion, one strong candidate for a solution to the problem is deduction management software. I think you will be impressed by its capabilities, its ease of use, and how effective it is in helping the creditor to resolve deductions quickly and efficiently. That’s my opinion anyway. What’s yours
Michael Dennis’ Covering Credit Commentary. Michael’s website is www.coveringcredit.com.
The opinions presented are those of the author. The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors. Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them