Adjustable trade spend review plugs a £1m accrual gap for beer manufacturer
Learn how Salitix recovered overfunded and erroneous payments for a global beer manufacturer, identifying significant trade spend errors that were recovered within six weeks.
A beer manufacturer with global revenues in excess of £30bn annually was facing a tough off-trade operating environment that put pressure on net margins. A challenge with miscalculated accruals left one team facing an additional budget deficit to deal with – and an opportunity for Salitix to step up and help mitigate a perfect storm!
Challenge: £1m+ miscalculated budget
Christmas trading accruals can be notoriously difficult to get right and are often overstated to protect against possible gaps. However, one miscalculated budget left a £1m-plus gap in accounted investment money when the actual claims from one retailer came in, leaving commercial finance teams scrambling to close the gap by alternative means.
Solution: Adjusting the trade spend reviews schedule for the year in question
Salitix was asked to help, which we did by adjusting the annual audit plan schedules to pull forward the specific retailer’s annual trade spend review for the year in question. We did this to deliver the reconciliation immediately (not 12 months after the period had ended). This was possible largely because the data acquisition protocols in place guarantee that all relevant data for any particular trading period is captured in real time to be available for review when required.
Results: Trade spend errors validated and recovered in weeks
The Salitix audit team identified in excess of £500K of trade spend errors in our client’s favour, of which 70% was validated by the retailer and repaid within six weeks. This cash was used to plug the accrual shortfall and avoid more significant balance sheet write-downs elsewhere.
Our data acquisition planning allowed us to adjust our audit plan, pull a review forward, and deliver a cash benefit at short notice to assist with a real-time accounting issue that was worth a round of beers (or two!).
“It’s an account manager’s nightmare to realise that your accruals are inadequate. Fortunately, Salitix was able to step up at short notice and accelerate their trade spend review to look at the current trading year and identify activities that had been overfunded, or funded in error, then negotiate and recover those funds within a short time frame.”
National Account Manager, beer manufacturer
Similar customer stories
Book a consultation to see how we can add 5% to your net profits with no upfront fees.
