When you think of non-trade deductions, you think of grunt work and heavy lifting. It’s not the fun part of Order to Cash. It’s a piece of O2C which is truly non-value adding.
Writing off all your deductions (which would never happen) would cost companies millions a year. So, teams of five to 10 analysts are employed to investigate small to large amounts, often working on thousands of deductions at any given time. As long as the process is manual, the company is losing out because of the high cost of activity, the high write-off threshold, and the stall in working capital.
This article looks at the numbers (some very alarming) related to manual deductions processing, and the more relaxing numbers achieved once you automate.