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Solution Brief

BILLBACK MANAGEMENT
Promotional Pricing and Trade Spending Programs are strategic levers for manufacturers to drive business performance. The execution and monitoring process of such programs can be complicated, slow, and costly. But, with the combination of SAP ERP and Vistex Incentives and Paybacks Module (IP), you can

Agreement

Agreement

Claim
Channel Partner Manufacturer

Payment Claim
Channel Partner Manufacturer

Payment

streamline the process validate claims against


agreements

Customer

reduce disputes and


adjustments

End Customer

prevent overpayments achieve dramatic


savings in labor costs

Billbacks occur when a manufacturer negotiates an agreement with a channel partner or directly with an end customer for special pricing or spending programs. The product is sold to the end customer through a channel partner or the channel partner incurs expenses based on the negotiated spending program. The channel partner files a claim with the manufacturer. The manufacturer audits the claim and sends a payment to the channel partner. The end customer may also be eligible for a payment from the manufacturer.

The Challenge of Billbacks

Taming the Complexity

Manufacturers often collaborate with channel partners to offer special pricing and spending programs for sales and marketing activities. This ensures that their products are competitively priced and have adequate market exposure. Market forces usually drive the structure and content of such programs. The process from negotiating an agreement to claim receipt and final settlement is referred to as Billback Management. Manufacturers create agreements with their channel partners containing product pricing and/or approved spending programs. These agreements can involve one or many channel partners including their end customers, and multiple agreements may simultaneously apply in certain cases. Agreements might encompass pricingrelated credits, warranty recoveries, marketing funds, volume commitments, market share statistics, and cooperative advertising; Agreements can change frequently, and even be modified retroactively. Claim data can originate from the channel partner, end customer, or an external source, such as a Group Purchasing Organization or a Data Aggregation Service. Auditing each claim can require a considerable amount of time and money and too often, manufacturers find themselves doing so with a collection of basic tools, such as spreadsheets, e-mail, faxes, and phone calls or with inflexible legacy applications. That makes it difficult to ensure accurate agreement validations and quick claim turnaround, which in turn results in lengthy dispute cycles and increased labor costs. When a channel partner submits a claim, it should be compared to the eligibility and pricing terms in the agreement. Are the claim amounts consistent with the agreement? Is the channel partner eligible for a billback? Was the product shipped to the eligible end customer? Could the claim be a duplicate? Did the channel partner or end customer return the product?

The answer to this complexity is Vistex Billback Management. The solution helps you bring order to a difficult and error-prone process. Billback 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 record and process claims, control varied and changing agreements and ultimately, transform billback management into a systematic and effective process. With SAP ERP and IP Module, you can manage the entire billback life cycle, from claim request to settlement, and minimize manual intervention to bring new levels of efficiency and accuracy to the process. The software enables you to: Create, manage and automate a variety of agreements with multiple channel partners and end customers Accept claims via EDI, flat files, web portals, or manual entry using fast entry tools Review claims for completeness and accuracy including pulling data from SAP Business Warehouse and SAP CRM applications Carry out mass changes to claims for incorrect submission data Process submitted claims against applicable agreements using billback documents. Settle billback documents based on flexible settlement parameters, for example, daily, weekly, monthly Easily reconcile and resolve disputes Produce timely reports and establish a full audit trail to support corporate accounting and compliance efforts Factor in calculation models to account for monies already earned by channel partners during the fulfillment cycle Use multiple currencies and units of measure in the entire billback process Use analytical and simulation capabilities to evaluate and promote the desirable programs and quickly model new programs

Communicate with partners via print, EDI and/or web portal technology Provide real time integration to SAP Financials and Controlling Module, especially in reconciling deductions already taken by channel partners against submitted claims Support a multi-tier distribution model where initial shipments are sent to channel partners consolidation centers and subsequently shipped to channel partners branch locations and onward to end customers Utilize the reported end sale data to control various performance incentive programs offered to channel partners and/or sales employees Aggregate claim and billback document data in Logistics Information Structures and provide extract structures for SAP Business Warehouse Provide a holistic overview of spending programs 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 consider documents from other enterprise processes, such as sales and procurement, in the billback process. For example, you can easily compare quantity sold to a channel partner with the quantity claimed from the sales data resident in your SAP ERP system. And you can readily use billback information in your finance and supply chain processes. 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 billback claims with lower costs and fewer resources, and shorten turnaround time throughout the billback process. Overall, the software can help you to: Create and approve agreements using Workflow Reduce labor costs, get more productivity and faster turnaround times in claims processing Provide a more transparent, closed loop process to manage agreements, claims and billbacks Reduce the amount of overpayments and disputes Link up real time with Financials to record accruals and settlement of billbacks in full compliance with current financial regulations 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 billback management, efficiently provide a key service to your channel partners and strengthen your companys ability to compete.

Typical Billbacks 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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