Unearned Cash Discount Recovery and Collection

Retailers often take early-payment discounts they aren’t eligible for, which reduces margins and creates preventable cash leakage. These unearned discounts typically stem from timing errors, incorrect terms, or automated short-pay processes. IAB Solutions helps manufacturers identify, validate, and recover these deductions while strengthening controls to promote adherence to terms and stop future loss.

Purpose

Stop discount leakage caused by short pays taken without eligibility or outside contracted terms.

Process

  • Review customer terms and discount eligibility.
  • Audit transactions to confirm payment timing, discount rate, and invoice accuracy.
  • Prepare and submit evidence-backed disputes for invalid discounts.
  • Provide reporting on recoveries, root causes, and retailer trends.

Results Achieved

  • Recover revenue from discounts taken outside agreed terms or applied at incorrect rates.
  • Reduce preventable short pays by educating customers on accurate terms of sale and enforcing clear payment expectations.
  • Optimize cash performance by strengthening compliance with payment terms, lowering DSO, and minimizing unnecessary write-offs.
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