In the food-away-from-home industry, effective management of trade dollars is fundamental to maintaining a healthy bottom line. Yet there’s a pervasive issue that often slips through the cracks of even the most comprehensive data infrastructure systems: the double dip.
Double dips are a significant challenge, resulting in complicated financial clarity and eroded profits if not monitored closely. But how do we begin to untangle this intricate problem? It begins with understanding the issue at hand.
Do We Have a Double Dip Problem?
A double dip in trade spending is akin to finding that someone has quite literally taken two bites of the cookie—only in this scenario, the cookie is your profit margin. This happens when there are two or more claims on the same case or unit, when the operator is only eligible for one. The questions that then arise are, ‘How big of an issue is this for your business?’ and ‘What steps can you take to rectify it?’
Concurrent vs. Claim-to-Claim Double Dips
Double dips typically take two forms: concurrent or claim-to-claim. Concurrent occurs when trade is paid on the same case, to the same claimant. This is typically a distributor. On the other hand, claim-to-claim occurs when two different entities, often GPOs, are claiming trade on the same case. TPM systems typically don’t contain location-level detail and therefore can’t offer the granularity required to audit at the location level, which can impact claim-to-claim double dip prevention and analysis.
Take the Double Dipping Sniff Test
Before diving into the high-tech solutions, it’s beneficial to understand how you can manually identify potential instances of double dipping. If you’re questioning the size of your potential double dip problem, here are two manual “sniff checks” that can provide immediate insights:
1. Evaluate GPO Contracts
Firstly, evaluate the importance of non-commercial avenues like Group Purchasing Organizations (GPOs) to your business. If GPO contracts are a part of your trade operations, obtaining a current member list from your GPO customers can reveal a lot. These lists, detailing organizational structures at multiple levels, can be compared against your direct deals to assess overlap, signaling potential double dipping of volume. This may need to take place at different levels such as organization or location level, depending on the deal in place.
2. K-12 Sector Scrutiny
Another area to examine involves bids or blanket bids in the K-12 sector. Review several billback claims for these bids; often, they include the school’s name and may also list the district name. Compare these names with those in the GPO Member List or the GPO claims in your trade management system. Matches here again suggest potential double-dipping scenarios. Caveat: The contract may be at the co-op or district level, but often the actual claims come in at location-level and results will not be sufficient to create a match. An example of this is you or your system would have to know that Lincoln High School, the location-level claim submitted, is a member of San Antonio School District to accurately audit.
3. Conduct a “First Look” with a Technology Partner
Completing these sniff tests on your own can still prove to be cumbersome. Tibersoft’s First Look program allows you to easily share a few data sources so that you can evaluate the severity of the issue for your organization, without committing to a full implementation. The results provided are ones that can be actioned right away for immediate ROI on the program.
Essential Tips to Prevent the Double Dip
If your preliminary sniff test hints at a double-dipping dilemma, here are five strategic moves:
- Enforce Submission Standards : Before finalizing new operator or GPO trade agreements, require that trade claim submissions include location-level detail with complete addresses. Aggregated claims generally lack the granularity needed for proper auditing. This requirement should also be added to any agreement renewals.
- Clarify Contract Language : Ensure your contracts with Operators and GPOs include clauses that disallow payments on multiple promotions within the same claim period. Clear contractual language is vital to avoiding overpayments.
- Maintain Access to Updated GPO Member Lists : Always have the latest GPO Member List within reach. This gives you and your team additional information to potentially pinpoint and prevent double-dip scenarios.
- Introduce Clawback Provisions : Consider incorporating clawback language in your agreements to recover trade dollars lost to double dipping since it began. This adds a layer of protection and recourse for your business.
- Leverage Tibersoft’s Audit Module: For those looking to dig deeper and accurately gauge the extent of double dips, Tibersoft offers a comprehensive solution. With our Audit Module and OPTRADE database, you can identify and stop double-dips.
Protect Your Bottom Line with Tibersoft
In summary, preventing and addressing double dips in your food service trade dollars isn’t just about saving money; it’s about ensuring the effectiveness of your trade spend. With the right tools and strategies, your business can thrive in an increasingly competitive environment, ultimately turning challenges into opportunities for growth and optimization. Wondering about the size of your double dip issue? Tibersoft is here to help with our Audit Module and our OPTRADE database, uniquely designed to calculate the precise cost of double-dipping’s status quo for your business. Reach out today to schedule an audit or to learn more about how proper data management can set you on track to reclaim accuracy, profitability, and operational integrity.
