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Friday, 1 May 2009

Invoices with 0% discount

Our number one issue for some weeks has been invoices with 0% discount on particular products. As a consequence we have been working hard to resolve two distinct aspects:

  • The root problem – ie ensuring we do not keep on creating new articles with 0% discount.
  • The consequences – ie backorders created before the discount was updated from 0% to the correct values.

At the risk of getting too detailed, I want to try and explain the root problem and also what we have put in place to fix it. Essentially we maintain a number of discount matrices for either wholesale or distribution product. Every product is in a product group and every customer is in a customer group. Where these two parameters meet on a discount matrix a value should be maintained eg 35%. If for a new product a product group is selected on a discount matrix where no value is maintained then SAP will apply no trade discount to the order – the result on your invoice is 0% discount. So how could this happen? Well, SAP is not able to automatically check that for say a particular Authentic book the combination of product group and customer group is correct. There are literally 1000’s of possible combinations and as a consequence, in the early part of the year, a number of products were entered with a combination giving a 0% value.

To address the root cause we are now running an external data checking process not just on the discount matrix but on all aspects of product data. In addition we check regularly in SAP for any lines that incorrectly come up with 0% discount. We know from Customer Services that the incidence has reduced over the last two weeks which suggests that these changes are starting to have an impact.

But I’m still getting invoices with 0% discount – I hear you say! As we know publishing generally works quite a long way in advance so the majority of titles affected were added to our system some months ago, sold in by our ASM’s and then stored as backorders until the stock arrived in Carlisle. The key point here is that when a product goes to backorder, with the exception of RRP, all the pricing criteria such as trade discount or special offers are held on that backorder. So if we correct a discount today, it applies to all new orders but not retrospectively to those already taken. Because the majority of products affected have been new titles, we have had large numbers of backorders stored with 0% discount and then released all in a short time frame when stock arrives.

We were told categorically earlier in the year that it would not be possible to mass update backorders with 0% discounts but would have to let them work their way through the system. However when the incidence increased significantly in late March and April being large publishing months) we challenged that view again. As a consequence we now believe that we have a workable means of updating backorders with 0% discount, which subject to testing we will begin to implement over the next few days.

Coming from a retail background myself, I am acutely aware of just how frustrating this has been for you and want to apologise for the difficulty it has caused particularly with reconciling invoices at month end. We have been working extremely hard to rectify both the root cause and the consequences and I hope to share further progress in the next few days.

Warm regards

Mick Goodman, STL Blog Team


GLO Bookshop said...

Well done, Mick- a bold attempt to explain the unexplainable, and I think I get the general idea. Basically, just keep sending the emails when the stock comes in with nil discount, and let you get on with sorting the problem.....

By the way, I thought that was an excellent idea from Geoff at the BA CBG AGM about adding the discount column to the back order list. I'm sure we'd all be happy to act as your extra eyes on this issue.

Trust Media Blog Team said...

Thanks for that - it was helpful to run through it all with the BA CBG first of all.

I have done a bit of work on Geoff's comment about the discount column, but it will be a little while before you see anything on your invoices.

Meanwhile I think we have the root cause fixed and although we are still getting some occurences, the incidence is far less now.

Mick Goodman
STL Distribution