Salitix recovers £278k of invalid deductions for UK food producer

Our client is a UK-based food producer making a range of branded products across 15 sites for the grocery, sweet treats, and international segments. With revenues in excess of GBP1bn per annum they had a significant aged debt challenge that would be written off.

Challenge: Unforeseen deductions negatively impacting revenue

The food producer had a significant number of deductions against their sales invoice revenues for a variety of charges that were not agreed (i.e. these charges had not been authorised by them). This meant expected sales revenue were significantly down and the P&L negatively impacted.

With these deductions totalling more than GBP1m, a decision was made to ask Salitix to understand what the deductions were for and whether they were valid, with an eye to recovering any values deducted in error.

Solution: Forensic auditing to assess and validate charges

The Salitix team were able to use their core audit skills, such as identifying relevant evidence and executing specific routine reviews, to analyse the charges and/or deductions applied by the retailer customers and validate or invalidate them based on the contractual evidence available.

Once this initial assessment of every charge was finalised, our auditors engaged directly with the retailer to discuss any charge or invoice that was not contractually supported, present the relevant evidence, and seek immediate re-payment.

Results: £278k invalidated and repaid to our client

Executing detailed reconciliations is time-consuming – time that is often not available to commercial or finance teams focused on delivering tomorrow’s growth and profit today.

Salitix, on the other hand, specialises in this kind of painstaking analysis. We were able to invalidate GBP278k of the retailer’s deductions, and this was repaid to our client. We also validated GBP224k that had been correctly deducted by the retailer, which enabled more than half a million of the potential write-off to be resolved.