3 Ways Coca-Cola Recovered $24m

In shared services organizations, where numerous complex transactions occur by the hour, there is huge potential for payment errors to occur. Whether it’s due to internal errors or problems with supplier processes, issues such as duplicate payments or credits are likely to arise when you have a large, complex supplier base. When companies focus on recovering these credits, they are often able to reclaim a sizeable sum.

Such was the case for Coca-Cola, which since 2005 has recovered $24m in gross profit for its North American units. In a recent webinar, Karen Dobson, former Director of Financial Support at Coca-Cola Enterprises, discussed the company’s strategies to build a tight credit recovery process, with the help of JPD Financial.

Karen shared 3 key insights that helped them recover millions:

1. Work with AP to ensure a positive view of recovery. While overdue credit can often be the result of problems on the supplier side, duplicate and overpayments in your AP processes can be the cause. Karen found it was “a major hurdle to convince the AP team that the recovery of credits is not a reflection of poor performance.” You need the key sponsors of your credit recovery program – in Coca-Cola’s case the VP of shared services and the executive leadership of the AP team – to secure AP’s sponsorship by communicating that the initiative is all about practicality and freeing their time to do what they do best. As Karen says, “if you were to build a structure [internally] to try to capture this half or 1 percent of spend, you wouldn’t make any money.” At the end of the day, money recovered is profit, which is a good thing.

2. When you find credits, take them. As Karen says, “you want your AP team to focus on critical suppliers, and not be engaged in the 3000 or more suppliers who may or may not have credit.” Some AP staff might worry about where a credit came from, but besides not being a good use of their time, figuring out where a credit comes from can be difficult to pinpoint; as Karen notes, “despite the comprehensive information in JPD’s vendor database, sometimes there just isn’t enough detail to tie a credit to a specific invoice or transaction.” So use Karen’s advice to send a constructive message to any AP staff member agonizing over where the credit came from: a credit “is found money; take it and run. Don’t walk to the bank.”

3. Leave the legwork to your provider. The recovery program should have very little impact on internal resource. Karen says that Coca-Cola “did not have to hire additional FTEs to manage our JPD relationship. The software made it easy to track results and monitor recoveries.” As such, there’s really no investment required from a client’s IT, and, as long as staff process and approve credit efficiently, you’re going to be using minimal AP resource.

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Conquering these challenges is only part of Coca-Cola’s recovery story. 

Watch the webinar for more on how Coca-Cola chose its recovery provider, the results of the program, and a fascinating Q&A with Karen and JPD’s Vice President and Managing Director EMEA Nick Hunt tackling many FAQs surrounding vendor credit recovery.

If you are looking to benchmark your recovery process or understand how to maximize your credit recovery, download the slides or watch the webinar.