Distributor Chargeback (also known as Ship & Debit or Claim back or Special Price Agreements) is a contractual agreement between manufacturer and distributor in which distributor ship and invoice end customers at lower price than usual while manufacturer protect distributor margins through chargeback payment. This process is covered under Customer Chargeback in IMA360.
This enables manufacturers to negotiate the prices directly with end customers, buying group, GPO based on market conditions while protecting distributor profit margin.
There are three main types of contracts:
End Customer – This typically happens when end customer is big enough for supplier to negotiate directly. Supplier and end customer negotiate the contract and supplier communicate the pricing information to distributors to make sure the end customer is billed at the contract price and distributor is eligible to claim the money back from supplier.
Buying Group – This is usually the case when the end customer is part of bigger purchasing group. These could be GPO, Buying Groups, IDN etc. In this case Supplier and purchasing group negotiate the contract and distributor bill the end customer at the contracted price and claim the chargeback from supplier.
Distributor – This generally is to allow distributors more control to be able to react to market conditions. Supplier and distributor negotiate the contract giving the authority to the distributor to react to local market conditions by buying at uniform price but sell at different price and then claim the money from supplier.
Let’s dive into some of the best features to look for in customer chargeback software and how they can help your business grow by optimizing chargeback programs based on sales.
User-Friendly Interface and Workflow
A user-friendly interface is crucial to ensure your team can seamlessly adapt to and utilize the chargeback management software effectively. Workflow automation, integrated approval processes, and easy navigation can help streamline tasks, enabling quick set-up and management of chargeback programs.
Deal Modeling
Model ship & debit programs based on historical sales or AI generated sales forecast to understand their impact on sales and profitability before finalizing them with trading partners. Not every chargeback program yields the best results, and modeling is the key to understanding the impact before signing multi-year contracts.
Flexible Chargeback Program Design and Customization
Every business has unique needs when it comes to chargeback programs, which is why flexibility is key. Top-notch customer chargeback software should allow you to design and customize chargeback programs based on specific evaluation criteria, such as customer, products, product categories, customer segments, memberships etc. and complex chargeback calculation formulas. Whether you’re running a tiered chargeback system or offering performance-based incentives, the software should adapt to your requirements.
Automation of Complex Chargeback Calculations
Manual chargeback calculations can be time-consuming and prone to human error, specifically when dealing with complex tiered volume, multi-axis tiered chargebacks, price protection, tiered growth, and special price agreements. Customer chargeback tracking software simplifies this process by automating complex chargeback calculations. The software can automatically apply the correct calculation formulas based on specific deal terms, ensuring that every chargeback calculation is accurate and compliant with contractual agreements.
Scalability and Multi-Tier Chargeback Programs
As businesses grow, so do the complexities of their chargeback programs. A top-tier customer chargeback management software should offer scalability to handle increasing volumes of transactions and multiple-tier chargeback structures. Whether you are managing small-scale chargeback programs for specific customer segments or large, multi-tier chargeback systems spanning multiple regions, the software should be flexible enough to scale with your business needs.
Seamless Integration with ERP Systems
One of the most important aspects of effective customer chargeback software is its ability to integrate seamlessly with your ERP, CRM and Revenue Management systems. A robust solution will connect these critical business areas, allowing companies to automate chargeback calculations by pulling the sales and purchase data automatically, post accrual and payments to financial systems, and analyze profitability. This reduces manual effort, minimizes errors, and ensures that customers receive the correct chargebacks based on the agreed terms and on time.
Real-Time Chargeback Tracking for B2B Partners
Visibility into your chargeback program is crucial for the B2B partners. The best customer chargeback management solutions provide real-time tracking and reporting of chargebacks via collaboration portal. Real-time reporting benefits customers, as they can track their chargeback status, ensuring transparency and trust in the chargeback process by making certain purchasing decisions.
Dashboards and Analytics
Software should offer intuitive role based dashboards and analytics tools to provide users with a comprehensive overview of chargeback activity, financial impact, and customer engagement. Tracking also allows organizations to observe the progress of chargeback accruals, profitability analysis, and payouts, helping to manage financial expectations and avoid chargeback overpayments.
How Our Company Can Help
Finding the best customer chargeback management solution is crucial for maximizing the impact of your chargeback programs while minimizing administrative overhead. Our approach at IMA360 offers precisely this balance. We specialize in providing businesses with an all-inclusive, integrated platform designed to optimize chargeback management by automating calculations, improving tracking, and enhancing transparency.
By choosing us, you’ll be leveraging a solution that was built by experts with more than two decades of experience in chargebacks business process and the best of the cloud engineers. Solution integrates seamlessly with your existing systems, ensuring smooth operations and more accurate chargeback management, helping you focus on what matters—building strong, long-lasting customer relationships.
