Business Context:
The company is a leading ecommerce marketplace with multiple product categories. The largest category, mobile phones, sees about 2 million handset sales in a month. Mobiles phones of 40 different brands and 2500 SKUs are sold on the marketplace. Most of these phones have discount schemes running on them. The amount offered as discount is reimbursed to the marketplace by the brands in whole or in part, depending upon the understanding between the brand and the marketplace. The amount thus reimbursed is called Brand Support. Every month, the marketplace needs to submit a report to each of the brands claiming the amount of brand support.
Problem Statement:
The calculation of the amount claimable as brand support from the brands and reconciling the same with the amount actually paid by the brand is a very complex activity due to the following reasons:
1. Multiple brands and SKUs and huge volumes of transactions
2. Multiple schemes running at various points of time on each SKU. At times, there overlapping schemes of which only one is eligible or in some other cases, two schemes can be combined.
3. In some cases, the brand support is claimable from the brand only if the marketplace sells the item below a certain threshold price and not otherwise.
4. The ERP system generally is not capable of handling these many conditions, calculations and reconciliations.
How Reconcify Solved the Problem:
Reconcify automated the entire process of calculating the brand support amount claimable from each brand every month, through the following steps:
1. Collating all inputs i.e. sales register, scheme database and the amount paid by the brand.
2. Validating the number of eligible units sold for each SKU against each scheme by applying the scheme date, time and list price.
3. Applying the brand support terms to the sales data for each SKU and each scheme.
4. Comparing the amount so calculated with the amount paid by the brand and highlighting differences.
5. Generating a report containing the IMEI number of each of the eligible units sold as a supporting evidence to the claim in order to minimize the changes of the claim being refuted.
How the Company benefited using Reconcify:
1. Prior to the deployment of Reconcify, the company had engaged a team of 12 accountants to carry out these reconciliations. With Reconcify, these 12 accountants were freed up to perform other important activities. This turned out to be extremely beneficial for the company which was already struggling due to staff crunch.
2. During festive months, sale volumes used to surge, which made it even more difficult for the team to complete the reconciliations in a timely manner. Reconcify is completely scalable and works with the same degree of efficiency regardless of transaction volumes.
3. There was a significant revenue leakage in the form of short amount paid by the brands to the marketplace. The marketplace was unable to contest these claims due to non-availability of reconciliations and supporting data. Through the use of Reconcify, the marketplace is now able to claim an additional $6 million on an annualized basis from the various brands, which translates into a straight bottomline impact for the marketplace.
