A DSD Recovery Audit can bring significant recovery dollars to your bottom line. In a business with slim margins, recoveries from a DSD audit can have a significant impact to a company’s profitability.
Did you know studies have shown that DSD merchandise can account for approximately 24% of a company’s total sales and as high as 52% of profits?
Interestingly, the internal controls in place to manage the DSD process are difficult to employ and in many cases may be antiquated. As a result, companies are at a higher risk of overpaying vendors on certain transactions, thereby reducing revenues.
Many executives in the grocery, distribution, convenience, and mass merchandise verticals are concerned about the prices of DSD product being in sync with ongoing promotional activity. They have shared with us their challenges in being able to manage and account for the enormous amount of disparate data associated with DSD transactions.
What makes a DSD audit unique?
- Huge amount of data – DSD transactions can easily be 10 – 20 times larger than warehouse transactions
- Deal data is in a different system than warehouse data
- Short deal periods
- Promotional offerings can vary by location
- Unique product mix
Why is a disciplined approach to a DSD audit a necessity?
- Must ensure completeness and accuracy of backdoor receiving data
- Accuracy of deal capture is critical
- Payment matching to purchase transactions is unique
- Billback deductions need to be accounted for
- Understanding of guidelines must be established for the audit
Make sure your recovery audit firm is capable of handling DSD data, and more importantly, that they have a specific audit approach to allow for maximum recoveries.
Not all recovery audit firms have the skillset to perform an effective and profitable DSD audit. For more information on how Strategic Audit Solutions can partner with you to identify, recover, and prevent future profit leakage in the DSD environment contact us today.
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