Great work from Oliver Ansell this week:
With CPI battles raging in the marketplace, we wanted to draw attention to our auditors ability to reconcile these arrangements and make sure that what was agreed, actually happens at the till.
In this instance, the supplier had done the hard bit and got some price increases agreed by their Grocery Customer mid promotional period, who then re-calculated the value of applicable promotional retros due on the impacted skus and re-invoiced for promotional sales using this new retro from the agreed date of change.
The Grocer wasted no time in applying the correct increased retro, only they applied it to a number of days of sales prior to the actual agreed price change, i.e. that had already been invoiced at the correct, old retro. The result, a double fund of retro values – amounting to an overpayment to the Grocer in excess of £50K.
The supplier, despite excellent accounting systems and commercial finance governance failed to spot the error, probably because of the sheer volume of invoices generated by the CPI and this variance was within their accrual tolerance – which is quite easy to understand when you realise the error equated to only around 4% of the actual funding due… either way a costly error when you realise that it was repeated elsewhere many times.
This is precisely what Salitix find and get paid back to Grocery suppliers every day of the week, year on year.
Can you afford not to be reconciling your trading to 100% accuracy?