Written by David Wouldham, Finance Consultant

How often is it that the Sales and Marketing department introduce a new rebate, promotion or other marketing campaign that creates a challenge for Finance? Finance may only be made aware of this very late in the process when a customer queries an invoice, an invoice is short-paid, or when there is a discrepancy on an inventory count. These queries can be time consuming to resolve.

While working with an IFS Applications 10 customer, two major Finance issues were identified and resolved in relation to Rebates and Marketing Campaigns.

1. Rebates

Even though our customer had been using IFS for more than 5 years, the calculation and reporting of rebate transactions was a very manual process. The sales report for the full month was produced and analysed on spreadsheets, with look-up’s populating the rebate percentages and creation of manually posted vouchers. Numerous rebate agreements were active with varying validity in terms of dates and specific cost detail. These agreements were a mix of customer, product, product group specific with multi-layering for additional rebates. The rebates may be open ended or periodically negotiated. The customer could claim their rebate in several ways, Invoice or credit note driven. They may then either be paid the amount due, or claim it as a credit against customer invoices payable.

Our team started by setting up Rebate Agreements in IFS Applications 10. A rebate agreement was set up for each customer receiving a rebate and a separate agreement was also created for buying groups. With the latter it is important that all customers within that buying group are listed in the rebate agreement as a Receiver. Agreements can be post dated and must then be activated to become live. Once the agreements were live, every time a customer invoice is raised with an associated rebate agreement, IFS generates the correct entries that accrue the rebate amount to the Balance Sheet and post the P&L amount to pre-defined General Ledger codes (offset to revenue or collected in a separate GL revenue or cost code). Reports can be generated at any time to detail all rebate transactions generated. Through this relatively small change in process, our client is not only saving several hours of administration at Month-End, but is also able to report their true revenue position, including the impact of rebates. Previously, the true revenue position was only clear several days after month end invoicing closed.

2. Sales and Marketing Campaigns

Another regular challenge is the fact that Finance often must “find a way” to process, analyse and report on sales promotions and campaigns. Working with our client we have found an effective way to achieve this using standard IFS. A recent initiative to offer free products based on a full pallet being purchased, initially led to a significant amount of additional work for Finance and Logistics. This campaign had been introduced rapidly with the impact on Finance not fully analysed.

Sales promotion functionality within IFS Campaigns was therefore investigated, tested, and implemented. This led to system-driven transactions, much improved reporting of the campaign cost/business impact of this specific promotion. Although the entire product range was included in the promotion, separate sales deals were set up to capture the variations offered. Implementing this process has saved both time and effort and, as with rebates, allows real-time reporting of a true revenue figure without having to wait until the end of the period to collect information and reconcile.

David Wouldham

Written by, Dave Wouldham, Finance Consultant
I have several years of experience working with IFS and have a passion for collaborating with our customers to ensure that we don’t just generate numbers but use the tools we have to add value to all areas of their business.