3 Tips to Prevent Losing Millions in Revenue

As a former wireless dealer, I’ve seen first-hand how poor reconciliation processes can be downright costly. Two common mistakes that can cost you millions in lost revenue are making assumptions you’ve been paid correctly and taking shortcuts. 

Assuming you’ve been paid correctly, or completely, is a risky practice. Carriers are paying out millions each month – with this amount of volume, mistakes can and do, happen. When you’re not reconciling your transactions it’s likely you’re not identifying those mistakes. And taking shortcuts to reconcile payments is just as risky. Shortcuts can be things like:

  • Looking at minimal criteria
  • Not validating your spiff payouts
  • Not validating your residual revenue
  • Not utilizing residual revenue
  • Not utilizing all aspects of your cell phone store POS to ensure revenue is tracked properly (if you’re an RQ user, this includes Integration, PS Promotions, Finance Wizard, and most importantly, the functionality build within the Price Sheet)

Thankfully, you can rid yourself of bad practices and begin to feel confident in your numbers by focusing on 3 areas:

1. Understanding the functionality with your POS and using it to your advantage

POS functionality related to reconciliation typically includes things like Chargebacks, Chargeback Reversals, and Partial Chargebacks. Why are these important?

Chargebacks do not affect profit or sales reporting for the day they are processed but will reverse the employee commission payment in full and reverse the revenue from the general ledger (G/L). You should be utilizing the full chargeback to match to the carrier commission statement to ensure you are being deducted only for the items you have been paid for previously.

Chargeback Reversals are game changers since there are times when you may be deducted payment due to unpaid bills which can lead to account suspensions. Now you can process the chargeback and when the account is re-instated, the carrier will repay you as they can reverse the chargeback. This will record the profit back to the G/L and repay the sales rep commission.

Partial Chargebacks only affect employee commissions if they are not paid as a spiff to the employee. If they are paid on a percent of profit or sales it will only reduce their commission based on the partial chargeback amount.

2. Understanding how each of the above functions affect your G/L and commision payouts

A common misconception among dealers is if you reconcile something in your POS, it will affect your G/L. This is a myth! The G/L is only affected if you make an adjustment to the amount of the reconciliation. When you make this adjustment, you can choose to post the entry to the G/L today or back date it to a previous day.

3. Validating/​Auditing your reconciliation process

For RQ users, validating your reconciliation process means utilizing the Phone Activation Wizard (PAW) Exceptions report to ensure there are adequate comments to identify where the integration is failing. With this information, you can make the necessary adjustments to RQ to confirm that the exceptions are kept to a minimum. It’s also important that you analyze the chargeback details. Ask yourself the following; Are there trends of higher chargebacks in one store vs. another? Are employees invoicing out items that are fraudulent? Are there trends with stores, employees, etc.? What do those trends mean? You must guarantee the sales team is invoicing only valid transactions. Garbage in means garbage out, which creates an overwhelming amount of errors throughout the reconciliation process.

Finally, validating/​auditing your previous day’s sales will reduce the number of items that must be researched during reconciliation. Audit your previous day’s sales in your POS by validating in the carrier system whether they are accurate. Matching in RQ is easy, but it’s essential to ensure the data is valid so you’re not wasting a ton of time researching items that do not reconcile.

For iQmetrix clients, if you feel there’s room to improve with your reconciliation process and would like some help, join us at the RQ Bootcamp for hands-on training and support.