FA Questions:
As a lead into the responses below, I believe
it is helpful to present some statistics. In the first 9 months
of Fiscal Year 06, AAFES AP has processed and paid an average of
518,120 invoices each month. Additionally, we have cleared an
average of 18,000 items from various discrepancy queues. This is
the number of items cleared, not the total that is in
discrepancy. That is a metric we can not currently track, but we
will track this with the new system. This information is
provided to help understand some of the answers below.
1. Why do we still have invoices that are from six months to
two years old that have yet to be resolved?
There could be a number of reasons why an invoice is unresolved
over time. Any delay is undoubtedly linked to a discrepancy on
either the supplier side (invoice) or AAFES (the PO). AAFES
AP will route invoices with discrepancies to the party causing
the discrepancy and follow up for the proper resolution. For
example, if the invoice is in error, AAFES AP will return it to
the supplier for corrective action and submission of a corrected
invoice. When the corrected invoice is submitted, and it
passes all edits, the payment clock begins and the invoice is
scheduled and paid according to terms. If the PO is in
error, AAFES AP routes that informational internally to the
respective buyer for PO amendment action. As the buyer
accomplishes the amendment, the invoice is re-processed and
scheduled for payment according to the original invoice received
date (invoice date for discounts). In some cases, the
buyer indicates that the PO is correct and the invoice
is incorrect and payment is made according to the existing
PO. In those instances, AAFES considers the issue resolved but
the supplier may not.
If there is a discrepancy on either the supplier or the buyer
side, and no correction is made, the invoice will not be further
processed. AAFES AP attempt to follow up on the discrepancy
queues, but it is a manual process in the middle of otherwise
highly mechanized processing.
2. What is causing AAFES to incorrectly calculate the credit
discount?
AAFES' AP system is programmed to follow the Prompt Payment Act
requirements for taking discounts. AAFES AP would need
specific examples to research.
3. When will industry have the ability to view AAFES supporting
documentation on line?
AAFES’ new Workflow system—now in development—includes a
supplier self-service portal which will provide access to all
invoices paid, pending, and in discrepancy status to include
supporting documentation. AAFES expects the new system to be
available for supplier use in the Spring of 2007. AAFES will
publish more specific information about the new Workflow system
and we near implementation.
In order to gain the most benefit from the system, AAFES will
also send requests to suppliers for information that is needed.
We will also post messages requesting information on the
Partners On Line web site. We ask that suppliers regularly
visit their data on the Partners On Line web site for additional
information.
4. How long does AAFES retain accounting records?
Procurement and payables records are maintained for 7 years.
5. Why can’t we get specific, detailed information when a short
payment is being made? We need to know by item if there is a
quantity issue or price or whatever the problem might be.
Instead we have to go through the entire document when AAFES
already has the information.
AAFES expects a significant improvement on the information
available for these types of discrepancies with the new system.
It is the supplier’s responsibility to provide a proper and
correct invoice. It is AP’s responsibility to return invoices
that are not proper and correct. It is not AP’s responsibility
to find the supplier’s error. If a PO is issued for an order,
and the supplier ships other than what is on the order, or
invoices in a format that does not correspond to the order, the
invoice will have problems going through the system. If the
supplier invoices properly and correctly, these problems are
eliminated.
Having said that, we realize there are occasions when the errors
are not the supplier’s fault. In those cases, the buyer has to
get involved to determine if the PO is in error and submit an
amendment to allow the payment to process. In those cases, we
get the buyer involved to make the necessary correction to the
PO.
Currently, to determine the specific line or item with the error
is a manual effort that can take hours to complete depending on
the error. For example, if the PO is in units of “each” and the
supplier invoices by “case pack” and there is a price
discrepancy, the process to determine which price or quantity is
in error would require so much manual effort that other supplier
invoices to be worked would fall behind in order for us to
identify the error as requested.
The new system will help all of us involved in this process. It
will automate much of the manual matching done today and it will
highlight any discrepancies. This will benefit all parties
concerned. It is also planned to give suppliers the ability to
go on line in supplier self-service (through Partners on Line),
make corrections to invoices already received and resubmit
through the system for processing.
6. Will the system upgrade for the accounting system give
supplier the ability to view documents from previous years?
When will the system upgrade for accounting expected to be in
place for suppliers?
The exact time limitations will be for access to documents
through supplier self service have not yet been addressed and
defined. We will publish this information as it is determined.
7. Who are the key FA points of contact?
Correspondence and contact should first be at the lowest level
to resolve issues. If those efforts are not fruitful, the
escalation should be to the resolution tech’s supervisor and
then up the line. Given the numbers noted above, if the issues
are sent to the top of the payables organizational structure
first, we will not be able to manage the work.
Contact information by supplier is available on the supplier
invoice inquiry system through Partners On Line. Instructions
for accessing that information follow.
►
Log into
Partners On Line.
►
Click on
personal point of contact.
►
This will
display the tech’s name, phone # and day/hours worked.
►
The fax # is
located on the original log in screen.
Other Payables POC information:
Bob Drugas
Director, Payables
drugasr@aafes.com
Jim Davis
Payables
Manager
davisj@aafes.com
Susan Griger
Accounts
Payable Supervisor II
grigers@aafes.com
Marsha
Stringer
Accounts
Payable Supervisor I
Suppliers A-D & T-V
stringer@aafes.com
Sherry
Fletcher
Accounts
Payable Supervisor I
Suppliers J –
R; W – Z; Alcoholic Beverages; Catalog Sales
Fletchersi@aafes.com
Pat Fry
Accounts
Payable Supervisor I
Edits &
Supplier Debit
fryp@aafes.com
Cay Wheeler
Accounts
Payable Supervisor II
wheelerc@aafes.com
Debra Mason
Accounts
Payable Supervisor I
Suppliers E –
l & S
masond@aafes.com
Lynn Runyan
Accounts
Payable Supervisor I
Suppliers
Europe/Pacific
runyans@aafes.com
Robbie
Carroll
Accounts
Payable Supervisor I
Manual
payments
carroll@aafes.com
Darlene
Tankersley
Accounts
Payable Supervisor III
Post Audit,
Post Payment Receipts Matching, Purchase Card Program, Supplier
File Maintenance
Tankersley@aafes.com
Betty Lutz
Accounts
Payable Supervisor I
Post Payment
Receipts Matching
lutzb@aafes.com
Judy Woehl
Accounts
Payable Supervisor I
Post Payment
Receipts Matching
woehlj@aafes.com
Jennifer
Glenn
Accounts
Payable Supervisor II
Post Audit,
PCard Program, VMF, Return Checks
glennjen@aafes.com
Claire Barnes
Accounts
Payable Supervisor I
AAFES Post
Audit
barnesl@aafes.com
Lori Garza
Corporate
Card Administrator (S)
garzalo@aafes.com
LG
Questions:
We answered these in a manner to remind the
supplier that since these are primarily compliance issues, they
should be addressed through the buyer because they are also
contractual issues. We’ve already worked with several suppliers
and the buyers to work through “LG” compliance issues, although
we view them as AAFES compliance issues.
8. Fuel Credits. Why doesn’t AAFES apply our fuel credits on
our invoice when making payment? It creates a payment
discrepancy in our system, requires we keep the invoice open
until the credit is taken, takes additional time to notify AAFES
and request the deduction be taken. We are finding AAFES is
applying the same fuel credit multiple times. What is causing
the problem and how can we prevent duplicate deductions in the
future?
We need specifics on this, it may be a logistics or an AP issue.
9.
When product is shipped back to our facility from AAFES why do
we receive deductions for the freight cost even though our
agreement stipulates we pay the transportation cost of the
product?
There are situations when the return information isn’t clearly
spelled out. AAFES will prepay the freight charges and bill the
supplier back.
10. Why doesn’t AAFES apply our pick up credit on our invoice
when making payment?
We need specifics on this, it may be a logistics or an AP issue.
11. What are your time lines when overages, shortages,
differences in price allowances should be identified back to
suppliers?
This information is communicated through the buyers/IMs and is
based upon the receipt of goods. A lot of this will be
minimized as suppliers sign up for TMS and also work with our
EDI group to provide ASNs.
12. Several people have asked about shipments here in the U.S.
but why does it take even longer to report discrepancies for
shipments made to overseas distribution centers?
The time is caused by the lead times it takes to ship
merchandise overseas. The discrepancies aren’t found until the
merchandise is received at the distribution center. This is
usually 30 to 45 days after it ships from ConUS.
13. Our sales people handle store claims for damaged
merchandise and take care of the product. There is little, if
any, involvement by AAFES personnel, yet we are charged the same
rate as if they were doing all the work. Why not eliminate the
charges for suppliers who have products being picked up at the
store.
AAFES store operators are still involved and required to follow
our procedures for handling damaged/defective/returned
merchandise. The handling charge is a standard industry
practice if the supplier wants merchandise returned. The cost
is contained in the AAFES Retail Agreement (ARA). The charge
can be avoided if an allowance is negotiated in lieu of returns
on the ARA or Trade Allowance Agreement form.
14. Why
can’t we get all the information we need to address a late
shipment? We need to know when our trucking company called for
an appointment, when they arrived at the gate, and when they
started the off loading process to see what is causing the
problem.
This information is normally kept at the DC. If a supplier
feels they are having a problem with their carrier that’s
causing an ongoing compliance issue, then they should work
through their buyer to have a joint meeting with the buyer,
LG-Operations (Dave Smith), and the supplier’s shipping
principals. Information can be provided to work out common
solutions to the problems.
15. Why don’t you look at when the trucking company arrived at
the security gate instead of when they backed up to the dock and
annotate the information on your tracking form? We have seen
significant delays at the gate and then someone later reviews
your information and sends us a bill.
This question should be more specific. Are you asking about the
military installation security gate or the DC?
16. Who do we contact at AAFES to get the documentation needed
to evaluate our trucking company’s performance to meet AAFES
delivery requirements to each distribution center?
The information request should be coordinated through the buyer
who will work with AAFES transportation on obtaining the
required info.
17. We
have multiple locations that may be shipping to a specific
distribution center depending on inventory at each location.
Can the AAFES system have more than one supplier shipping
location for each distribution center?
No, there is a constraint within Retek that only allows one
supplier shipping location per item per distribution center.
18. When
the product is picked up by AAFES, we believe title changes at
our dock and the carrier has liability for the product and what
was on the bill of lading. Depending on who you ask, we get
different answers. When does title change for point of origin
orders?
FOB Origin is as described, where title passes upon pick up by
the carrier.
19. Why do
we receive late delivery charges when your distribution center
gives us the appointment either before or after the delivery
time?
This needs to be addressed with specific incidents.
20. When a
trucking company is delayed and goes into a wait time situation,
what is the process for billing AAFES for the wait time charges
incurred?
Please provide specifics, much depends upon the FOB terms, etc.
21. When multiple purchase orders are being delivered,
shortages are being reported due to the in-checking process.
Why can you check multiple purchase orders on the same truck to
insure you don’t have any errors with the count?
The errors are usually caused by improper carton markings
identifying the correct purchase order. In order to prevent
these errors, the supplier must make every effort that each
purchase order shipment is clearly marked by PO number.
22. What is the policy for overages at distribution centers
and how is the problem identified back to the supplier?
Overages are identified as tally ins to the buyer or inventory
manager. It is their decision whether to accept or have it
returned however overall, AAFES’ policy is not to accept
overages.
23. If AAFES receives overages in the distribution center, why
don’t they pay for them?
If the buyer or inventory manager can’t get a return
authorization from the supplier, and they have made the decision
not to accept the goods, they can advise that the merchandise be
destroyed or donated to charity.
24. What is the policy for overages at stores and how is the
problem identified back to the supplier?
Same as the DC.
25. Who are the key POCs for LG?
For compliance issues it would be Dave Smith, 214-312-3769 or
smithda@aafes.com.
Exchange Partners On Line
(EPOL) Questions:
26. How do we get claims to go to the correct address?
Partners on line and e-mails don’t seem to be working.
Update company information in the Supplier Setup Manager on EPOL
and contact your Account Contact. EPOL
contacts, Vera LaDue, 214-312-4552,
ladue@aafes.com; Pat Duggan,
214-312-3753,
dugganp@aafes.com
27. Who are the key points of contact for FA, SD Co-op, SD
Partners, EDI, LG, and PRG? Can they be combined and available
on partners?
There is a phone directory for SD (Sales Directorate) on
Exchange Partners On-Line, this includes EDI. In the Supplier
Invoice Inquiry on EPOL the FA contact person for that specific
supplier code is listed. On the EDI Home page which can be
accessed from EPOL there are contact numbers for EDI. The
people attending the Supplier Seminars are given contact names &
numbers for all these areas.
28. Why
can’t we find a better way for suppliers to update their point
of contact information for supplier compliance charges? Right
now we don’t have a way to view what AAFES has in their system
and the charges are often going to the wrong location. The
quicker we find out about a problem the faster it can be
resolved.
The SUPPLIER
SETUP MANAGER on EPOL is the current place for supplier to
update their company information.
The Supplier
should update changes in the Supplier Setup Manager and provide
an official letterhead to the AAFES buyer for any major changes
to Addresses especially the Payment address.
29. We continually see claims going to the wrong point of
contact and often find we have only a few days to research and
refute a claim. Why doesn’t AAFES have one point we can verify
the point of contact information so compliance charges, or any
other information, get’s to the right person?
On EPOL under
the Supplier Invoice Inquiry each company has a contact
person listed with phone number and work hours under PERSONAL
POINT OF CONTACT.
30. Why can’t AAFES set up one database for supplier point of
contact information? The accounting people have a list (which
we can’t see), supplier compliance has a list (which we can’t
see) and contracting has a list (which we can’t see).
AAFES Retail Buyers & Contract Buyers are listed on the Phone
Directory on EPOL and each Supplier has a contact person in
Accounting on EPOL under Supplier Invoice Inquiry.
31. Why can’t we use Partners on Line as the means to
communicate all point of contact information within AAFES
various systems (buying, accounting, logistics, etc.)?
We will explore that possibility.
32. When we update our point of contact information using
Partners on Line why doesn’t the updated information flow to the
right places in your systems?
Updates on the
Supplier Setup Manager on EPOL go to the AAFES Buyers via the
email address and Supplier Code which is required. The Buyer
will initiate the update of the information in the VMF (Supplier
Master File). Information changes such as Address Changes
require a hardcopy (no faxes) of the letterhead sent to the
buyer for signoff.
33. We changed the point of contact information using Partners
on Line but the change has not been made in the AAFES accounting
or purchase order module. We have sent e-mail’s but have yet to
get the address change into the system. It has been months
without any success, what should we do?
First contact your AAFES Buyer for resolution then if you still
do not get help contact someone in SD support such as EDI.
Reference the Sales Directorate phone Directory on EPOL.
34. Can we be able to download all of our information for a
single supplier even when they have multiple supplier numbers?
On EPOL if running Teradata Sales Information Application 30
supplier codes or less can be highlighted and a report will
return with sales for all items under all supplier codes. Never
run over 30 supplier codes at one time.
35. Who are the key POC for Partners?
Pat Duggan,
dugganp@aafes.com,
214-312-3753 and Vera LaDue,
ladue@aafes.com,
214-312-4552.
EDI Questions:
36. When will the 812 Advise Debit/Credit be used to
communicate overages or shortages?
We are working on the application and hopefully will be ready to
test the first quarter of 2007.
37. In order to receive the 812, will the supplier be required
to send the 856 advance ship notice?
No, but the 856 is required by AAFES.
38. How quickly after the receipt of goods will the 812 be
sent to the supplier?
The 812 will be sent the same day payment is made. Partner must
be on FEDI.
39. Currently the ship date and delivery date are listed on the
purchase order when only one of the dates applies. Why doesn’t
AAFES only list the date that applies to the specific type of
shipment, FOB destination or origin?
We will be able to accommodate this change when we upgrade to
the new EDI version 5010 and as RETEK rolls out the purchase
orders in RMS.
PO Process Questions:
40. Why don’t we see bulletins about your processes for
handling claims, points of contact and changes in your business
practices? The E-business side (, GDS,) have been sending out
bulletins on problems with the systems, pending changes, notices
about attribute changes which we use to adjust our processes.
We are revamping our web site to be more like the
e-business web site. Currently most of the info mentioned in
your comment is on the “Doing business with AAFES web site”
41. We have problems with purchase orders that are placed prior
to a price change but are shipped after the effective price
change date. This situation creates a payment discrepancy in
our system that must then be researched. Do you have any
suggestions?
There are too many variables to consider to give a
blanket response. I suggest they work this out with the Buyer.
42. When we have a pricing difference we are being told the
price was in the buyers system but did not flow to the
accounting side. What could cause that type of problem and do
you have the ability to see the price was in the buyers system?
There is insufficient detail to provide a response.
If the supplier can provide details, we can research further.
43. We continually get buyers or inventory managers who tell
us to ship products but then fail to complete the purchase order
revision and we get deductions. Is this a common complaint or
is it just us?
We are sending out a reminder to our buyers on this subject
stressing they must complete PO amendments if they make changes.
44. We offer all retailers the ability to take special
discounts based on payment terms for promotional and seasonal
merchandise. Who makes the decision on which payment term will
apply, the buyer, accounting, or is there someone else?
The buyer.
45. We have been waiting for quite some time for a signed copy
of our resale ordering agreement, what is causing the delay and
who can we talk with to obtain a copy?
The buyers are required to staff all ARA’s with our
Policy and General Counsel which may cause some delays if there
we changes made or proposed to the agreement. You need to
contact the buyer and discuss the situation. If you are unable
to contact them, provide more specifics such as the contract
name and we can research.
46. What is the biggest challenge you see with the supply
chain? There are several challenges of aligning over 7,000
diverse suppliers to meet AAFES supply chain objectives,
effective communication and effectively aligning business
processes are two of the critical ones that come to mind from
the logistics perspective that will be on going challenges for
all of us.
Agree with your assessment. As we are rolling out
Retek modules which will have a positive improvement on our
Supply Chain and SD reorganization to more effectively channel
communication to where it can be more easily addressed, positive
impacts should be realized by both our Suppliers and AAFES.
47. How is the order lead time determined?
The buyer preparation time, purchase order time,
supplier ship times are all considered when developing the order
lead time.
PRG
Questions:
48. Why does AAFES take months to reimburse suppliers when the
claims are found to be invalid?
PRG reversal
procedures are the same for AAFES and the civilian market.
However, since we only have read only access to the AAFES
system and no authorization to image or key the reversal in the
system, this extends the repayment process. This is common on
many of our accounts. The goal is to take a minimum two weeks
to 30 days for all approved reversals.
49. What is causing AAFES to take deductions prior to the
suspense date listed on the claim?
Our claims
are processed for deduction after 30 days from being mailed. We
don't have a suspense date.
50. Why are there such long delays in getting deduction
information to our company so we can address the problem? Why
is AAFES taking six months or longer to identify deduction
issues?
It is
industry standard to review the account for accuracy after the
closing of the fiscal year. The account review is performed by
two audit firms, in a primary/secondary pass. This is done after
AAFES' Internal Group completes their review.
51. What do you feel is a reasonable time we should have to
wait before getting a response?
Our
guidelines with AAFES are to respond to all supplier requests
within 5 business days after we receive the correspondence in
writing.
52. How do we address claims being made for co-operative
advertising or market development funds from the past when we
had dead net pricing? We put applied every allowance to get to
a net price and now the audit process is saying we owe more
money even though AAFES got it with the lower price.
In the event
this situation occurs, the supplier should have all this
information recorded in the ARA to avoid additional claims.
53. Claims are sent by the Co-op department in year one.
Suppliers and supplier reps refute the claims, get buyer
approval, and have the claim reversed. comes through and
processes the same claim and requires that the same proof be
provided again. Why can’t the Buyer’s flag the claim so we
don’t have to repeat the same work we did initially with?
We should not be generating a claim on the same issue unless
additional information is discovered.
54. After
AAFES has researched the information and filed a claim, why
can’t the supplier have copies of the same documents used by
AAFES or to make the claim? We receive non compliance fees with
little or no documentation. It’s difficult for us to determine
what the claim is for or verify whether the claim is legitimate.
For example, AAFES shows freight was late. If we can determine
why and how the freight was late then we can determine if our
carrier screwed up or if we screwed up. If the carrier screwed
up then we can get the fees from them. If we screwed up we need
to pay. If AAFES did not give a delivery appointment and we
were late because they were too busy to get us in then it’s
AAFES’ fault and we should be able to deny the claim.
AAFES
compliance claims are generated from EDI information provided by
the carriers and other electronic data sources such as PO,
Routing Instructions, receiving information, etc... The data is
analyzed against the electronic information and evaluated
against the ARA's to verify compliance. Once this occurs the
claim is printed by pulling the electronic data into a schedule.
There are no hard copies of freight bills.
55. What is the process for a post recovery audit?
The post
audit recovery groups review all business transaction sets,
documentation and agreements between AAFES and their suppliers.
Once all the areas are reviewed for accuracy and the
discrepancies are identified, a claim will be issued for AAFES
approval. Once the claim is approved by AAFES, a 30 day letter,
including the supporting documentation, will be mailed to the
supplier for their review. The supplier has 30 days to dispute
the claim. After 30 days, if there is no correspondence, the
claim will be sent to AAFES AP for deduction. If there is a
written correspondence within 30 days, then correspondence will
be logged in our system and the auditor will be notified
accordingly. PRG requires written correspondence so that the
information can be scanned and tracked accordingly.
AAFES follows the Industry Post Audit Standards by reviewing
transactions up to 7 years from the check date. However, AAFES
is currently reviewing the FY 2006, FY 2005, FY 2004 and just
ended FY 2003.
56. Is a claim from without sufficient documentation to
support the claim valid?
There is
sufficient documentation provided within each claim to support
the validity of the findings.
57. We have filed a protest to a claim from yet the value is
still deducted, why?
The
suppliers have 30 days to review and dispute a claim. Each
claim is evaluated by the auditors when a correspondence is
received. If the claim is researched as a result of a dispute
or correspondence and it is believed to be valid by the auditor
then the claim will be re-instated to follow the claim protocol
established by the AAFES audit guidelines, which means the
supplier will be given another 30 days to review our research.
If no correspondence is received within those 30 days, the
claim will be set up for deduction.
58. Who is the right person to talk to about a claim? When we
go to the point of contact we are told to contact the buyer who
in turns sends us to someone else.
PRG will
handle all the correspondence of post audit claims issued by PRG.
Suppliers should contact PRG as instructed in the cover letter
attached to the claim. All the correspondence should be
addressed to (aafes_audit@prgx.com). Once we receive the
written correspondence it will be logged in our system by our
correspondence desk. The auditor that wrote the claim is
notified by the desk to address the correspondence and to
contact the supplier accordingly. PRG requires written
correspondence so that the information can be scanned and
tracked accordingly. If the claims do not belong to PRG the
auditor should send you to AP or COOP Dept. In rare occasions,
the auditor may send you to the buyer for the research of a
claim. However, this should not be the norm.
59. If we can’t get a response back from in a timely fashion,
who do we contact to get help?
If you do not
receive an answer in a timely manner, please contact Omar Ramos
at
omar.ramos@prgx.com and copy the correspondence desk at
aafes_audit@prgx.com
60. How do we get the supplier point of contact information
changed for claims? We have tried sending e-mails and calling
without success.
If you would
like to change the point of contact information, please send an
email to
aafes_audit@prgx.com or
omar.ramos@prgx.com or an
auditor.
61. We receive claims from four years ago and many of the
records needed for review have been archived in a commercial
facility that can take four to six weeks to retrieve. How do we
go about getting additional time? We don’t want to
automatically file a dispute with the claim until we have our
documents.
AAFES
provides the supplier community with 30 days to respond and
dispute any claim prior to deduction. If additional time is
needed to perform further research, please contact the PRG
auditor directly or send your request to
aafes_audit@prgx.com
and an auditor will contact you to evaluate your request.
62. Why doesn’t provide all the information they used to
determine a claim should be made? When we get incomplete or very
limited information with their claims we have been told we have
to look at our documents because they don’t have the time.
Our intention
is to provide sufficient documentation to support the validity
of the findings. Each claim has its own life and in many
occasions the analysis is performed utilizing electronic data
sources such as EDI and legacy systems, that requires the data
to be converted from electronic format to paper form. The hard
copies are provided to the supplier. We (PRG) are responsible
for supporting the claim. The supporting documentation should
be provided to the suppliers for their review.
63. When we reject the claim from and send supporting
documentation, they reject our documentation and the claim
stands. What is the process for us to file a formal dispute
when we believe our documents support our claim?
If a supplier
sends a correspondence disputing the claim, it is the auditor
responsibility to evaluate the correspondence and share the
findings with the supplier. If findings by the auditor support
the validity of the claim and the supplier is not satisfy with
the research, please contact
omar.ramos@prgx.com for further
discussion.
Trade Promotion Management Questions:
64. What is the process for disputing a claim; can you provide
us with a written process or protocol for the refusal/denial of
claims?
All claims contain a POC email
ID. Questions/Disputes/Denials should be emailed to
coop@aafes.com. The Trade
Promotion Management group will research the reasons for the
reversal request. We will coordinate with the suppliers/buyers
and act in accordance to the buyer’s direction.
65. What do you consider to be a reasonable period of time to
address a disputed claim?
We should acknowledge initial emails sent to
coop@aafes.com within 48
hours of receipt (M-F). Resolution time depends on the
complexity of the claim and becomes dependant on other parties
to provide facts, even so, most are resolved within the same
week, and some take longer.
66. Why does AAFES deduct first?
Unless it is a credit memo, we don't deduct first.
Our claims have terms of Net 30 Days which allows for payment
and any dispute.
67. We have several allowances available to AAFES that are not
being taken until well after the invoice has been paid, usually
by the compliance group. Why can’t all the allowances we have
authorized be applied at the time of payment?
If the Trade Promotion Management group is not
aware an allowance is available we can't ensure the allowance
will be taken. The solution is to make the availability of the
allowances known to the Trade Promotion Management group. Simply
email
coop@aafes.com
68. We list on our invoice all the allowances to arrive at the
net price. The buyer lists the net price without showing all
the allowances used to get to the net price. While the two are
the same net, we have problems getting paid correctly. What is
being done to address this problem?
Please provide specific example to
coop@aafes.com. This sounds
like a simple miscommunication regarding how specifically the
allowance is to be taken. Or simply a terminology
misunderstanding, .For example, “off invoice” may have been
misunderstood as “off line item” or “off invoice” as a “below
line deduction”.
69. What are the three biggest problems you hear from
suppliers and what were your answers?
1. Supplier is surprised by a deduction. Solution
- Why did you wait until deduction to question the claim?
We mailed a claim that provided 30 day notice that a deduction
will occur.
2. Supplier doesn't know what the deduction is for. -
AAFES Partners web site provides the answers or directs to a POC
available to ask for more details.
3. Issues with Logistics compliance claims - These are
complicated for both parties. We encourage and facilitate the
dialog between supplier and AAFES logistics to 'fix' what
is broken. Less than 10% of these claims are ever reversed.
These claims represent the smallest amount of cost recovery, but
are the most contentious of all claim types. As we have stated,
we’d like to see them go away simply because the degree of costs
recovery could be better invested in promoting the supplier’s
products.
70. Is anyone tracking the types of discrepancies (e.g.
pricing, short shipments) and seeing how what caused the
problem? For example, if there is a problem within the AAFES
systems or business process every supplier has to spend time
researching a problem that isn’t really our problem. Conversely
if we have a problem within our system, I need to get it fixed
as well.
Yes. The AAFES Trade Promotion Management System
includes tracking codes for each specific infraction and we
continuously analyze the reports to determine process errors and
then work to fix them. It was noted by one of the attendees
that they don't have compliance issues with AAFES, as
they 'fixed' their issues a couple of years earlier based on
compliance claims they received from Kohl’s. We applaud that
approach because it is a win-win.
71. Instead of calling your group Co-Operative Advertising,
wouldn’t a more accurate description be trade promotion
allowances since your responsibilities include Co-Op, MDF,
Defective, Returns, Warranty, etc.?
Done! What was “Co-op” is now the Trade Promotion
Management group or “TPM” for short.
72. If all clams are being reviewed prior to submission to a
supplier, why do we continue to receive claims for co-operative
advertising that have nothing to support that authorized the
claim? If you don’t have approval in writing from us, what is
the basis for making a claim?
AAFES expects support for advertising. The claim
is result of the trade allowance system's consideration of the
amount of measured media used. In many cases, the principle
supplier offers trade promotion support but fails to convey that
to the sales force. For example, if a supplier offers 3% of
purchases for advertising, then the claims reflect that. If the
system doesn't ‘see’ the agreement, then suppliers are billed
based on our advertising rate card. We include the supporting
documents with the claim and mail these to suppliers for their
review. Most suppliers prefer accruals versus event-by-event
claims and the accrual process also proves more cost-effective
because AAFES can block space well in advance of the event and
pass those saving on to the supplier.
73. Why are claims for co-operative advertising being
submitted at dramatically higher levels than approved in the
agreement? For example, we approved $1,500 but received a claim
for $10,000. This has happened multiple times and continues to
be a problem for many of our suppliers.
If the Trade Promotion Management group knows of
the agreement, the claim is booked at the agreement rate. If TPM does not know of the agreement, then the prevailing Rate
Card rates are used to determine the claim based on measured
media utilized for the advertisement. The solution is to
forward a copy of the agreement to
cooprev@aafes.com and future
claims will reflect the agreement.
74. What are some examples of how co-operative advertising
monies could be spent within AAFES?
We provide the same advertising channels as are
available in the civilian marketplace. Print advertising (some
examples - weekly tabloids, catalog, food court shopper, Power
Zone flyer, food court tray liners), electronic advertising
(radio, TV, theater, internet), outdoor advertising, and
direct mail.
If the print advertising or electronic spot is national, we
expect national support not something to be taken out of
“co-op” funding. In those instances, the supplier’s national
ad is placed within AAFES’ media channel, essentially the same
as if your ad agency booked an ad on CNN, NBC, etc. It is
your company's national ad campaign placed in our media channels
to further the campaign's reach. On the other hand, TPM dollars
are used when the advertising message is tailored to a
store's advertising plans. In other words, both parties
realize a specific benefit from the advertising; i.e. Dillard’s
and Rockport both benefit from the co-op ads in the newspapers
and both Dillard’s and Rockport are identified in the ad
message. The perfect example of AAFES cooperative advertising
is our weekly sales flyer. .
If you would like a copy mailed to you, send request to
coop@aafes.com.
75. What are some examples of how market development funds
could be spent within AAFES?
MDF is used to increase market share or manage the
line. Some typical uses are placement (our checkout
merchandisers and endcaps), fixtures, temporary price reductions
(VPRs), early buy allowances, new item allowances, volume buy
allowances, in-store signs, purchase of fixtures that feature
your products, coupons. rebates allowance, overall trade
allowances, trade allowances to compensate for 'normal'
markdowns, damaged and defective allowances, warranty
allowances, 0% interest promotions.
76. Our Company is currently funding supplier compliance
charges from our market development fund program. That means a
less money to promote your products plus the loss of valuable
resources away from their responsibilities. Why don’t you
focus your efforts on curing the problem instead of treating for
the symptoms?
Since the compliance claims now flow through the AAFES trade
allowance system, if affords the coordination between the sales
divisions and the logistics division to cure problems. In
addition, this process allows 30 days for the supplier to review
the claim and resolve before deduction occurs. We are focusing
on fixing the problems. We would like to see these types of
claims diminish because the funds are better utilized for
promotion rather than fixing process errors.
Note: We’d caution against this practice. Proper accounting
methods dictate that advertising money should be spent for
advertising, MDF promotional money should be spent for
promotions. Compliance money should not co-mingle with
Promotion money.
77. Why do we receive billings for cooperative advertising
claims that have no documentation and were not included in our
trading partner agreement? It was our understanding the
Supplier Compliance Group reviewed all the documentation to
insure the claim was valid before submitting to the supplier.
....see responses for 72 and 73
78. Because the point of contact information is incorrect for
many of us, why doesn’t AAFES temporarily revise the time frame
to dispute a claim from thirty (30) days to sixty (60) days?
We will follow industry standard which is net 30
days. Let's correct the POC information. Let us know the POC
and address you want trade promotion claims mailed to. An email
to
coop@aafes.com will resolve
this.
79. Because there are significant differences between various
types of trade (soft goods, hard goods, electronics, etc.), why
doesn’t AAFES tailor the trade allowance agreement form by type
of trade?
We will revise the trade allowance form and group
the allowances by type. Advertising allowances will be together
on the form, logistics allowances together, and MDF allowances
together and identified as such.
80. We offer the same trade allowances to all customers and
actually treat AAFES as a preferred customer for discounts and
allowances even though your volume isn’t sufficient. We find
each buyer has their own view of how to allocate allowances
which directly impacts our ability to have one standard that can
be applied to all invoices. Is there a problem having allowance
agreements by product group and how will that be tracked in the
AAFES accounting system?
1. We believe we are a “key account” for most suppliers and we
anticipate receiving the TPM support levels accorded to a key
account.
2. The Trade Promotions Management group can facilitate
coordination between buyers and sellers where it makes sense to
have a cohesive trade promotion agreement.
3. AAFES’ Trade Allowance Management System can accommodate
allowance agreements by product group, or even down to SKU
level. Any cost recovery revenue from a TPM claim is applied
as a reduction to COGS which automatically favorably affects
store departmental margin and—in turn—the respective buyer.
