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  • One of our clients returned 3,500 cases of product that was purchased with an off-invoice allowance.  The price was $24.00 less a $4.00 off-invoice allowance for a net price of $20.00.  Since the product was purchased for a net price of $20.00, the return should have been calculated as $20.00 x 3,500 = $70,000.00.  That is what our client deducted for the return.  However, a few months later, the vendor sent correspondence stating that the returned product received a $4.00 allowance when it was purchased, and they requested a $14,000 repayment (3,500 x 4.00).  Our client repaid $14,000, erroneously.  The Audit Recovery auditor detected this overpayment, and produced a debit with all relevant backup information that made it easy for the vendor to understand and clear the $14,000 debit.

  • One other client ordered product that was to be demonstrated in their stores – frozen pizzas.  The deal sheet offered a $3.00 off-invoice allowance for a demo in month of September, but the order was received in mid-October.  The buyer placed a note on the purchase order stating that the buy was for the demonstration, the buy was ¾ truckload (over 30,000#), AND the pizza makers to perform the demo were listed on the vendor’s invoice.  The allowance was not received off-invoice, and with all the evidence, it was clear that the 720 cases should have received the $3.00 allowance, totaling $2,160.00.

  • Swapping UPC’s cost one of our clients $10,488.00.  The vendor decided to change the UPC number of their 60-watt 4-packs of light bulbs.  Before the UPC change, the vendor offered a 2.30 per case billback allowance for the old UPC number.  Since the old UPC was loaded into our client’s system, a billback debit was never produced because they were buying the new UPC during the promotion timeframe.  Our auditor verified that the light bulbs were exactly the same as the old UPC number, but the vendor decided to change the packaging.  The 4,560 cases that were purchased during the promotion were due the $2.30 allowance, totaling $10,488.00. 

  • Another client was due a volume growth incentive. The program requested that our client buy more electronic components from a vendor. If sales increased by $500k during the year, a 1% rebate applied. However, if sales increased by $1M during the year, a 2% rebate applied. The vendor calculated the increase in sales at $729,000 and issued credit for $7,290. Our auditor noticed that there were multiple vendor numbers and checked to see if other invoices for electronic components were paid to a different vendor number. When the auditor found $342,000 of electronic components payments under a different vendor number, it resulted in an underdeduction of $14,130 that was due to our client ($1.071M increase x 2% = $21,420 total due - $7,290 rec'd = $14,130 due).

  • Another example pertains to an error regarding the delivery of merchandise. A client expected to receive product on April 30th, just before a price increase that was to take effect with shipments beginning on May 1st. The price was changing from $19.53 to $22.74. The order was for of a truckload or 3,500 cases. The vendor delayed shipment and it was not received until May 3rd. The vendor charged the $22.74 price and the clerk paid that price since that was the correct price as of May 1st. However, since our client requested the merchandise to be received before the price increase, our auditor produced a debit for the difference between $22.74 - 19.53 or 3.21 per unit. The 3.21 overcharge x 3,500 cases amounted to $11,235 that was overpaid.

 

 

   
 
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