Friday, June 16, 2017

Leaving money on the table..

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We are all looking for ways to maximize profit and squeeze whatever we can from our operations. But at some point the traditional methods of doing so, hit the wall. 

As the expression goes you can't get blood from a stone. 

So today we explore some new and innovative ways to keep your company from leaving money on the table. Maximizing those profits so you can not only compete with , but rather blow away your competition. 

This excerpt was taken from the TEVA 6-K document with regards to revenue recognition.
If you don't know who TEVA is - check out the link 

Revenue is recognized when title to, and risk and reward for, a given product are transferred to the customer, with provisions for estimated chargebacks, returns, rebates, discounts and shelf stock adjustments established concurrently with the recognition of revenue, and deducted from sales. Provisions for chargebacks, returns, rebates and other promotional items are included in “sales reserves and allowances” under current liabilities. Provision for doubtful debts and prompt payment discounts are netted against “Accounts receivable.”

TEVA is not unique here, all larger companies, put aside revenue to allow for "Chargebacks, returns, rebates, discounts and shelf stock adjustments".  Discounts well we understand that, everyone wants a better price. And Returns well that makes sense they are returning the products. But what about these others?  

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  • Chargebacks/Rebates 
  • Shelf Stock Adjustments

As a distributor, do you know what they are?, How they work and how to maximize the amount you can get from them?, Does your manufacturer or distributor partner have these hold backs as well?

If so the question you have to ask yourself is... 
Am I leaving money on the table? 

Lets start with what they are in simplest terms. 

1. Chargebacks and Rebates 

For most distributors a chargeback or rebate request is an additional amount of money they can request from a manufacturer or wholesaler, for selling an item to a customer or group of customers.  in exchange for reporting this sale they can them claim a "Rebate" or Chargeback to effectively lower the original "cost" or price they paid to the manufacturer or wholesaler. 

There are thousands of variations to the scheme and hundreds of companies who sometimes are in the middle like a GPO or other purchasing group. But the long and short of it. is that it's another way to access better pricing and costing on product and allow you to make more money. 

2. Shelf Stock Adjustments 

Shelf-stock adjustments are payments/rebates granted to customers based on the existing inventory of a customer following actual or anticipated decreases in the invoice or contract price of the related product. Not as popular in the Medical Surgical space , but standard in pharmaceuticals.  And it's becoming a standard in the Consumer space so it may be a requirement soon enough. 

Look at companies like Earny that offer a new mobile application that connects with your email and Amazon accounts in order to track your online purchases and find your e-receipts, then price check those items to see if you got the best deal. If it finds a lower price, Earny will request a refund on your behalf and the difference (minus the company’s 25 percent cut), will be credited back to your payment card.

Nothing new there as credit cards have offered price protection for a while, but the technology spin is what today is all about. 

Sure these rebate and shelf stock programs exist , but they assume a fair amount of work to file these claims and as such the programs are usually not maximized. Especially by smaller distributors who lack the manpower and time to properly monitor all these programs. 

Well enter the technology sector to save you time and money (Yay us!!) 

Just like earny,  The MDS-Nx system can scan thru your sales for the last 90-120 days and find those rebates that you did not know you had.This is after it automatically calculated your net rebate during sales order and quote entry.  As you add new contracts the system allows you to "rescan" your shipments to determine the best possible rebate for a shipment/sale. 

In addition when new product is received and there is a price drop the MDS-Nx system alerts you, Offering the opportunity to create a Return to Vendor Shelf Stock Adjustment. 

Of Course with Integrated Financials each transaction can be matched to a specific GL code so you to can create a Revenue account except instead of a liability.  And on your balance sheet it will show as an asset as you are making more money. 

So if you are ready to stop leaving money on the table, and automate the process of getting those extra dollars. Just give us a call. 

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to

Click here and tell us how we can help you with your business solutions.

Friday, June 9, 2017

Why You Should Treat Your It Guy Better...

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Ok, so this was stolen from Why You Should Treat Your Mechanic Better, but the same rules apply, and to a large extent they can be applied to any distributor serving their customers tirelessly day after day. 

So the next time you have that customer who isn't treating you the way that you think they should, share the blog post and let them see the other side of the coin.  Make sure your customers understand you are partners, and friends. It will make everything better.

While most customers engage their IT Guy with courtesy and friendliness, some people insist on treating IT Guys badly, whether it’s constantly calling them for an update on your ticket, or telling them that your uncle’s cousin’s brother-in-law knows the problem better than they do. Regardless of what it is, if you’re one of those people, here are 7 solid reasons why you should treat IT Guys better the next time you go call the help desk.

1. They’re just trying to do their job

The few dishonest IT Guys out are the ones that give everyone else a bad reputation. People always want to talk about or review a terrible experience, but not always a good one. When a IT Guy gives you a quote, don’t immediately think they’re tying to screw you over. Most are no different from you or me. They get in at 8am, work hard all day and get out at 8pm. (if they are luck)  It’s a tough job, and most of them are just trying to provide for their family, and not trying to bankrupt you.

2. They work on something that you have no understanding of

When you bring your problem to an IT Guy, you are essentially saying to them, “You’re the expert, and I’m not exactly sure how to fix this.” Treating them nicely shows that you truly need their assistance. Being a jerk about the cost or saying that they’re not doing the right thing while still bringing your problem does not give the IT Guy much incentive to want to fix your problem or take you back as a customer the next time you have an issue. Moreover, don’t go into it thinking they’re trying to sucker you for your lack of knowledge. Give them a chance before getting too defensive.

3. They’re a free bank of knowledge

Maybe this one only applies to the curious types. But, if you’re the least bit interested in how your stuff works, a good IT Guy is better than any website or YouTube video out there. Most will be happy to talk with you if you’re interested in what they’re fixing, how they fix it and what it does. Being nice to them will only encourage this kind of knowledge sharing.

4. They’re probably a decent person.

Actual work aside, most IT Guys are good, hardworking people. That’s a simple fact that I think gets overlooked by a lot of customers. There’s a heavily portrayed stigma that all IT Guys are grumpy weird people, which couldn’t be farther from the truth. Don’t pass judgment on them because the problem you brought them is bigger than you anticipated, or because the issue needs time to fix.

5. They work just as hard as you do.
So, your ticket has been in process for a few days longer than anticipated. Yes, this can be a large inconvenience, but if you go in there and your problem is still being attended to, then the IT Guy and crew are doing all they can to get you back up and running. Before getting in their face, make sure you look at the situation objectively to see if they are truly working hard to get your situation resolved. (If not feel free to complain, you have my blessing..) 
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6. They’re working on a very valuable possession.

Think about how much you need your computer system. Even if you’re leasing/renting it, think of how much you’re pouring into it each month. If you want the job done right, and you want meticulous care to be put into the work for your system, then treat the IT Guy respectfully. 

You get what you pay for. 

Might as well be nice and have your expensive system run well.

7. They’ll appreciate you as a customer.
When you start things out on the right foot, a lasting friendship can be made between you and your IT Guy. Not letting the little things get to you (i.e. a project being a day late, or the bill being raised from the estimate) can help you create something great. Maybe down the line when you have a little problem they’ll fix it, no charge. You never know!

Friendship is essentially a partnership.  - Aristotle 

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to

Click here and tell us how we can help you with your business solutions.