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Resolving Customer Deductions
By Michael C. Dennis MBA, CBF

When resolving customer deductions, the primary goals should be to:

  1. Determine the root cause of the problem.

  2. Make the necessary corrections so that future deduction problems do not occur.

  3. Try to customers supporting documentation only once.

  4. FAX rather than mail the documents required.

  5. Keep copies of all documentation sent to customers.

  6. Make careful and detailed notes of all discussions and commitments concerning outstanding deductions.

  7. When necessary, go up the chain of command at your customer to secure repayment of deductions taken in error.

  8. Follow up on customer commitments already made and apparently broken.

  9. Follow up to be sure that any required documentation was received by the customer, eliminating one excuse for delaying payment.

  10. Follow up to be sure that the customer makes a payment commitment upon receipt of relevant supporting documentation

One final thought: Arguably the only person that cares about an open deduction is the credit manager. The customer does not care because their books and records show the matter to be closed. Typically, your salesperson wants to look ahead rather than backward - but dealing with disputes and deductions involves looking backward. Your goal as a member of the credit department team is to make collection of an open deduction as important and as routine as collecting against a past due invoice.

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