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Have you collected all the monies your brokerage has committed and spent on behalf of the manufacturers you represent? If the answer is yes, congratulations! You are one of the few brokerages collecting all the committed reimbursables you are due. If you have uncollected or lost amounts, you have an opportunity to increase your bottom line and make your business more effective.

We feel the billback system is one of the most critical systems for keeping money in your account within brokerages. We have personally seen this one system cost a single company more than $180,000 in one year, but have also seen this system be so effective that less than 1% becomes uncollectible.

We have found these uncollectible and lost amounts are due to the ineffectiveness of the broker’s systems or processes, and are not a cost of doing business or due to manufacturers represented.

Another challenge we commonly see is the skewing billbacks represent on the financial statements. Rarely do they represent money out and money in during the same period, therefore your profit and loss statement is often overstated or understated in practicality. There is also difficulty pulling reports of all income generated by any single manufacturer because the billbacks skew the income. This of course leads to business insight issues making it difficult to lead with the data (to learn more about business insights click HERE).

Consideration should also be given to the cost of operating your billback system. Have you taken into the account the uncollectible amounts and the cost of the time given to the system? We find it often takes more time to run an ineffective system that loses money than it does to operate an effective system with minimal or no uncollectible balances.

So what is the first step to making a change in your billback system? We feel it is important you start at the beginning. The billback approval and documentation stage is critical for building an effective billback system. From there you take these same principles into the invoicing, collection, financial reporting and even the satisfaction stage of the process.

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To speak with us about your brokerage call us at (623) 505-5945, or via email at

Your team at Tikvah Group