From the 1st day I got involved with the Dynamics EDI industry, I continuously heard that EDI ASN’s (Advanced Ship Notice) would trigger very high emotions for anyone having to deal with them. So with pen and paper in-hand, I first asked the EDI Senior Specialist who was training me, “Why is this?” In record time I got my first answer, “Errors in ASN’s can result in chargebacks and these can be very expensive to the retail supplier!”
Rolling into the New Year, I’m once again thinking about those ASN comments and how they relate to one of my New Year’s resolutions - having a much healthier bank balance. If you’re like everyone else who has been affected by the recent economic struggles you’re probably thinking about the importance of having a healthier bank balance so that you can securely ride through the down times, if and when they happen again.
So how can understanding what errors result in chargebacks in the first place improve the health of your company’s bank balance? For a full list of errors, www.retailedi.com offers a very comprehensive list on this page: http://retailedi.com/index.php/business-models-a-concepts/310-a-few-of-the-business-and-edi-errors-which-can-be-tracked-via-edi-documents.
Once we understand where errors can happen, a 3-step approach can be taken to limit or remove chargebacks all together:
1. Understand what can cause chargebacks with your trading partners. This task can be challenging to get your head around so focus on the key errors that you know will cost money at the end of the day. Also make sure you know how to dispute a chargeback as sometimes your customers make mistakes as well.
2. Double-check everything. Have the right EDI solution in place to make sure that 1) notifications are sent if invalid data is about to be created – e.g. required data is missing or out of specification, 2) make sure your EDI solution is current and fully-tested to meet the requirements outlined by your trading partners and 3) alerts can be generated for delayed ASN receipt acknowledgements.
3. Monitor your own performance to understand where your weak points are located and where your greatest risks for chargebacks exist. It’s always best to catch your own mistakes and realize areas of improvement before your supplier scorecard suffers. By keeping tabs on yourself, you have the opportunity to correct errors and strengthen accuracy before taking a potentially heavy financial hit from your trading partner.
What are chargebacks costing your organization? While you’re gearing up for a healthier year, go ahead and weigh the effects of chargebacks on your organization’s bottomline and evaluate how you can have a healthier, more profitable 2011. Cheers!