Solving a 3-year pendency for a multinational FMCG

Solving a 3-year pendency for a multinational FMCG


A multinational FMCG brand had to reconcile a large number of distributor claims in a specific market. Such claims were set off against the receivables from distributors. These claims were provided annually creating cash flow challenges and tedious audits. Matrix Business Services was engaged to clear the backlog and reconcile claims appropriately.


Problem Statement

  • Claim pendency for 3 years
  • Distributors submitted multiple claims in a month against activities authorised by the company towards promotions
  • Some of the claims were multi-branded claims and accounting for them was a challenge
  • All claims pending approval were received via e-mails into the inbox of different budget owners, who were a part of the sales team and couldn’t spend time clearing these claims.

The Matrix Solution

Backlog clearance

  • Onboarding sessions were set up with the budget owners to understand the promotion plan, budgeting process, business landscape, KPAs, approval hierarchy, and more.
  • The pending distributor claims were listed and Matrix engaged with the distributor teams to confirm the balances.
  • Against the pendency reported, line-level checks were done to check if the claims were indeed received. A common SharePoint was created for distributors to upload the supporting documents.
  • Daily trackers were sent on the status and the organization was recommended to give an ultimatum to the distributors to submit the respective details.
  • The claims were classified basis an ABC analysis (given the magnitude) and an exception was sought for clearing the claims below a specific threshold with bare minimum support.
  • High-value claims were thoroughly checked to confirm performance.
  • Duplication in claims was identified and raised to the distributors to provide reasons and RCA.
  • Other rejections were mailed to distributors for alignment or further proof of performance
  • The company’s approval was sought to split multi-branded claims in sales salience of the respective years and the claims were charged to the right Profit Centers and spends booked to right cost centres

Long term solution

  • A detailed SOP/ Jobaid was created in collaboration with the company
  • Relevant approvals were sought and the SOP was deployed to the distributors as well
  • Expectations were set right in terms of performance needed against every spend type and a detailed Business Risk Acceptance document was created to record certain risks that have to be assumed along the process due to market conditions, the magnitude of data, cost-benefit, data constraints etc. and compensating controls were identified for every risk & documented with approvals
  • A traffic light report template was aligned & created as a platform for highlighting the management outages distributor wise and the results of compensating controls
  • Measures were identified such as continuous defaulters, duplicate claims submissions, any cases of fraudulent practices and action items & owners were documented for the same
  • Ancillary checks & balances for compensating controls were set – such as checking any inflation in sales by deriving sales through inventory and shipment and comparing the same to claimed sales
  • The digital platform created for claims submission and live status tracking

The Result

  • The claims were bucketed in to clear statuses on where it is pending – either with the company, distributors (or) Matrix and targeted deadlines were plotted for clearance
  • The practice of set-off against receivables stopped – claims were either cleared within SLA (or) identified as pending inputs from distributors
  • Cashflows improved tremendously due to stopping of set-off and due to identification of duplication in claims
  • Accounting right against relevant IOs and GLs enabled through right identification & scientific salience application
  • Frauds identified – Examples – Duplication in pictures submitted for visibility claims, GPS coordinates in pictures not leading to the stores, Inflation of sales, Returns against sales that were paid for promotion etc.
  • Clear visibility to management teams on the status via digital platforms
  • Quick turnaround & SLA enabled through Macro tools, BOTs and other means of digitisation (such as apps for tracking visibility)

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