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Foodservice Manufacturers: The Claim Acquisition Dilemma

Foodservice Manufacturers: The Claim Acquisition Dilemma

One of the biggest frustrations for manufacturers in the Foodservice Industry about Trade Promotion Management is the chore of obtaining all the backup needed to process claim rebate payments and deductions. Sounds like a simple task, but it isn’t. Let’s talk through why this is not an easy thing to achieve.

The Problem: Lack of Standardization

There isn’t any standardization at all in foodservice claim processing. When you set up deals with Operators and Distributors to buy your products and offer rebates/pricing, they at some point want their money and thus send you some form of backup to get it. Unfortunately, that backup comes in many different formats: handwritten, pdf, Excel, Word, etc. and that’s if you’re lucky enough to get them sent to you.

The Problem: Lack of Time and Resources

Nowadays, many of these vendors place the responsibility in your hands, the manufacturer, of going out to their portals to grab the claims/backup needed. This task may not seem like a big deal on the surface, but when you factor in the time and resources it takes to complete this task on a regular basis for multiple vendors, it adds up and is costing you money. The time spent on these admin tasks take you away from where you should be focusing your time and resources.

Some of these vendors can now send electronic versions of this backup, but many manufacturers can’t take advantage of this because it means getting their already busy IT department involved.

Why does IT need to get involved? If you want to get into the electronic claim retrieval business as a manufacturer, you need to set up a system that allows for all file delivery methods from your trading partners such as FTP, secure FTP, encrypted files, security keys, email, etc.  Then if you’ve mastered that, you also need to have the ability to process all file types such as flat (positional), any form of delimited, any version of Excel, EDI, and PDF.

If you get that far, that’s only half the battle.  Now you need to have the ability to identify and manage bad data received for things like wrong format, incomplete information, etc. and need system flexibility to allow for rapid modifications to file formats received from business partners without new development.

Vendors change their layouts all the time so just when you think you have an incoming claim automated; they change something up, and you have to react. On top of all that, IT expertise requires network management, ETL development, and database administration to name a few.

So as you can now see, many manufacturers stick with the old fashioned method of getting claims mailed to them, emailed to them, or manually going out to portals.

The Problem: Lack of Detailed Data

What you miss out on if you don’t invest in a good claim acquisition electronic process are a couple of big things.

  • Gain Useful Information for Insight into Your Trade Spend – If you get the electronic version of the invoice, many times that means more useful information.
    • For example, many electronic versions show you the actual location that bought your product.  All of the location level data can be loaded electronically into a system so you can now view total purchases all the way down to location and SKU level.
      • Just think about being able to analyze those 10,000 cases Sodexo bought from you but now having the ability to drill in and see that 20% went to K-12 and 30% went to Hospitals.
      • Then drill in more and see specifically what that hospital on 123 Main St bought. That’s the power of electronic claims!
  • Get More Options – One more benefit is that many of the vendors sending in claims have different formats. You just need to know how to request the best one for your business needs.
    • For example, there’s a major GPO that will send backup that only shows case/lbs by SKU and rebate total. If you’re in the know, you are aware that you must ask them to send the location level file to get the better info.
  • Get Faster Turnaround – Electronic claiming allows for faster turnaround. It gives you the ability to pay customers faster. It also gives you the opportunity to get a better handle on your deduction balance because you can clear deductions in a timelier manner.

The Solution: A Complete Electronic Claiming Infrastructure

If possible, manufacturers should look into building out a complete electronic claiming infrastructure to gain many of the benefits noted above. It does take time, money, and resources to build out an electronic claiming infrastructure. If you have the ability to do this, then you’re ahead of the game.

However, many manufacturers are not able to build an internal electronic claiming infrastructure. Don’t panic! There are 3rd party vendors that do this all day long for foodservice manufacturers.  A 3rd party may be your best option because you don’t have to worry about making updates on your end. The 3rd party solution will be on top of industry standards and connections to provide you with a great solution that fits your needs. They specialize in this area so they will do all the heavy lifting for you.  Then send a clean standard daily file back to your system to process the claims internally, or use the 3rd party to also process all the claims to completion.

Either of the options above should be looked at because if you’re not benefiting from all this useful information, chances are your competitors are. Don’t let your competitors get a leg up on you. Contact GoSimple to learn more about our electronic claim process and our trade promotion management solution.

Brian Maloney

Brian Maloney

Co-Founder & COO at GoSimple
Brian Maloney is the Co-Founder & COO at GoSimple. He has been in the foodservice industry for 20+ years.He has extensive knowledge in claim acquisition, contract management, and trade spend analytics. Connect with Brian on LinkedIn.
Brian Maloney

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