BlackHawk’s Scalable Reality With Deductions

Blackhawk Networks: Gift Cards For Everyone!

How Blackhawk gifted themselves the power of automation, thus scaling up their deduction management process.

Let’s talk about gift cards. Everybody loves gift cards. They are not just a gesture of appreciation or care, but also something that businesses use to amp up their customer experience, employee productivity, and relationships. That is why thousands of brands trust Blackhawk Network to engage and grow loyalty, productivity, and sales by their gift cards, e-gifts, rebate, and several employee programs.

Deductions At Blackhawk: A Disaster Zone

Deductions at Blackhawk, are payments that it owes other brands for their participation in marketing and distribution programs. The company owes its distribution partners money for their participation. 

That gets deducted from the payment they were supposed to pay Blackhawk for the products supplied. According to Cindy Scott, Sr. Manager at Blackhawk, their deduction landscape a few years ago was “A Disaster Zone”. 

They had thousands of pending deductions aging for over two years and over 4,000 total deduction line items. Now, the large-scale deductions at Blackhawk were divided into hundreds of stores involved. This meant hundreds of invoices per deduction. 

Let’s see how that was a problem. For example, let’s say Kroger had a deduction amount of a million dollars. Now, this amount gets divided across all of their stores resulting in around 1500 invoices with each deduction handled individually. 

Quite a hassle, considering the manual approach to scaling this mountain of deductions. There was a lack of a definitive process and visibility which made this entire process inconvenient and “A Disaster.”

The key reasons for the failure of manual deduction management included:-

• Disconnected Spreadsheet Dependent System- They handled the entire deduction management through spreadsheets and all the changes done would have been manual which was error-prone and time-consuming.
• High Volume Per Deduction- With 100+ line items per deduction, the issues were evident, and the volume per deduction is considerably high.
• No Workflow- A small deduction team meant no proper workflow.
• Lack of Visibility- There needed to be real-time visibility into the status of the deduction.

Then, the need for an ideal Deductions Management Solution was highlighted. And they gave themselves the gift they needed the most; Automation.

An Ideal Deduction Management Solution:- A Gift Named Automation

By introducing automation, a deduction management solution could:

• Automatically aggregate all documents
• Create an analyst’s worklist
• Divide workgroups properly based on the workflow
• Update real-time deduction status report

This not only helps increase visibility but also helps the analysts create a more efficient worklist.

How Does It Affect The Overall Workflow

Now, dealing with diverse large partners at the same time and managing their deductions implies that the workflow gets divided among several analysts. This is where each group receives one company to deal with and so on continues the workflow. Now the manual workflow didn’t provide enough visibility for the teams to operate in separate workflows. This had an overall negative impact on work distribution. By introducing automation, the structured workflow got divided into processors, where each processor is an individual being allotted a specific action to perform(a process called collaboration). Also, if handled through a central repository, the processors and their allotted workflows could be moderated and changed as per requirements from time to time.

Reporting Via Automation

In the case of deduction management, if the system is capable of real-time updates, then it can be a doorway to understanding deduction aging and holding the upstream people in the workflow accountable. And automation does provide a better insight into the entire process which also included elements such as:-

• Calculating the average number of days taken to resolve deduction by the owners.
• Ranking the customers on the basis of their deduction resolving periods, hence improving prioritizations and deduction correspondence.
• Analyzing customer behavior and personal analysis.

Switching To Automation: Deductions Made Easy

Blackhawk gifted itself with the power of automation and allowed technology to take control of its deduction management process. This wasn’t just a tool that they embraced but more an ally that made the mountain of endless deductions, well scalable and the entire process way more efficient and endlessly more productive.

What is the process to switch from manual to automated deductions?

Switching from manual to automated deductions requires careful planning and execution. Here are some general steps you may follow:

• Evaluate your current deduction process: Understand how your current process works, and identify inefficiencies and pain points.
• Identify the software or technology to use: Choose a solution compatible with your existing systems that can integrate with payroll, accounting, and other software.
• Design the automated deduction process: Work with a software provider to design rules, thresholds, and notifications.
• Test the automated process: Conduct thorough testing to identify and fix any bugs or issues.
• Train employees: Ensure employees understand how to use the new system and escalate any problems.
• Gradually roll out the new process: Identify issues before fully implementing the new process and make adjustments.
• Monitor and analyze results: Monitor the process and adjust it as needed for continuous improvement.

Keep in mind that switching from manual to automated deductions can lead to significant cost savings and increased efficiency in the long run. 

What Are the Features of a Deduction Management Solution?

A deduction management solution typically includes a range of features designed to help businesses manage and automate their deduction processes. 

Here are some common features that you may find in a deduction management solution:

• Rules-based automation: Allow businesses to set up rules-based deductions based on specific criteria.
• Data integration: Integrate with payroll, accounting, or ERP systems to ensure accurate data.
• Notifications and alerts: Provide alerts for deductions or exceptions like overpayments or underpayments.
• Analytics and reporting: Offer real-time analytics and reporting on trends, exceptions, and potential compliance issues.
• Collaboration and workflow: Support collaboration between different departments involved in the deduction process.
• Compliance management: Help ensure compliance with relevant regulations, such as tax laws and labor regulations.
• Self-service capabilities: Provide employees or customers with self-service capabilities, reducing the workload on HR or customer service teams.

A good deduction management solution can provide greater efficiency, accuracy, and compliance in deduction processes, leading to cost savings and improved satisfaction for customers or employees. Choose a solution with these features to optimize your deduction process.

Driving End-to-End Deductions Automation with HighRadius

HighRadius’ Deduction Management solution, is the industry’s first fully autonomous platform for managing deductions. Our AI-powered technology analyzes your deduction data, identifies root causes, and automates the resolution process, all while ensuring compliance with regulatory requirements. 

With features like rules-based automation, notifications and alerts, and real-time analytics and reporting, you can streamline your deduction management process and improve efficiency. Our solution also includes self-service capabilities, empowering your employees to view and manage their own deductions, and reducing the workload on HR or customer service teams.