The debit note is a sure sign that something is going wrong with your business - whether it is with processes that result in poor quality, incorrect pricing or late delivery, or a retail relationship in jeopardy.
In a highly competitive supply chain, the debit note can provide a clear indication that the supplier is failing to meet the strict performance criteria set by the powerful retail customer and, in addition to incurring significant cost, could be in danger of undermining a fragile relationship in an increasingly disloyal and competitive atmosphere.
Recording the causes of debit notes provides an information source that can be used to understand where the problems lie. Managing these problems enables the company to meet customer expectations and reduce the latitude for debit notes and associated credits.
This requires a consistent approach to recording the reasons for deductions and debit notes and a simple, effective means of communicating these problems across the business: they can do little good if known only to those people responsible for administering the debit note process.
This information can be combined with other core applications, such as ERP and CRM, to enable cross-departmental analysis of business performance. The resultant problems can then be addressed to deliver the service levels demanded by the retail customer.
John Charles
Managing director
Credica.co.uk
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