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Object documentationChargeback

 

An amount of money that the manufacturer takes back from the customer.

 

You use this to recover money from a customer within the deduction scenario. The over-deducted amount could be for costs related to:

  • Nonperformed services

  • Insufficient proof of services

  • A trade promotion that was not executed

Structure

There are the following two types of chargebacks:

  • Funds-based

    This is used to recover the validated portion of a deduction.

    Example Example

    A customer receives an invoice from the consumer products company for $10,000 for shipped goods but pays only $9,000 because $1,000 was deducted for a trade promotion. Upon receipt of the deduction the consumer products company's ERP system creates a dispute case for $1,000, which is transferred to CRM where an automatic claim submission is created. You examine the claim and determine that the deduction is invalid because there was no trade promotion agreement. As a result, you create a chargeback based on the claim submission to recover $1,000 from the customer.

    End of the example.

    Note Note

    If you use a claim submission with tax-related information, this information is copied to the chargeback apart from the net amount. You have to enter the net amount, distributing the amount across the relevant tax codes.

    End of the note.

  • Project-based

    This is used to recover the validated portion of deduction by means of a carried-over prepayment that will be applied to a future trade promotion.

    Example Example

    A customer receives an invoice from the consumer products company for $10,000 for shipped goods. However customer pays only $8000 because $2,000 was deducted for promotion expenses according to the terms of an existing agreement between the two parties. Upon receipt of the deduction the consumer products company's ERP system creates a dispute case that is transferred to CRM where an associated claim submission is created. You examine the claim and determine that only $1,000 of the claimed $2,000 is valid. As a result a claim settlement is created for the valid portion and a chargeback requesting $1,000 is sent to the customer.

    End of the example.

    Note Note

    You cannot enter tax-related information in a project-based chargeback.

    End of the note.

When a customer sends an invoice payment to ERP that is less than the expected amount, the system automatically creates a dispute case that is then transferred to CRM where it becomes a claim submission. You determine which portion of the disputed amount is valid and create a chargeback to recover the invalid portion of the claimed deduction. If you determine that the amount cannot be recovered the chargeback status is set to Proposed uncollectible. Upon approval, the status is reset to Uncollectible and the settlement process is triggered. When the settlement process is completed, the chargeback status is automatically set to Written-off.

For both the fund-based chargeback and the project-based chargeback, you can have one of three possible results:

  • Payment

    The chargeback amount is recovered from the customer.

  • Carried-over prepayment

    The amount is applied to the customer's account for use in future trade promotions. In this case the chargeback amount is considered recovered. For more information, see Carried-Over Prepayments.

  • Write-off

    The chargeback amount is considered uncollectible because there is no possibility of recovery. For more information, see Write-Offs.

To use taxation in claims, you must activate the business function Claims and Funds Management (CRM_CF_1).

Integration

Chargeback operations impact claim submissions and dispute case documents. The chargeback also impacts funds management as the chargeback balance is updated in the funds checkbook.

You can maintain external reference numbers in the chargeback. External reference numbers can come from the predecessor document, such as a claim or a claim submission, or you can enter them directly in the chargeback.

To use external reference numbers, you must activate the business function Claims and Funds Management (CRM_CF_1).