Critical Obstacles in Your Co-Op Claims & Reimbursements Process
The co-op marketing claims and reimbursements process for HVAC OEMs and distributors is complex and prone to pitfalls that often lead to financial loss. This makes OEMs, dealers, and distributors hesitant to try it as they don’t want to be on the hook for the cost.
With the right knowledge and preparation, HVAC OEMs and distributors can avoid and overcome the most critical obstacles that often arise in this arrangement. Let’s examine the most common obstacles to claims and reimbursements in co-op marketing and learn how to solve them.
1. Do You Have a Claim and Reimbursement Process?
It seems like an obvious question, but some HVAC companies, distributors, or dealers may not have a process set up since they work with partners in an ad-hoc relationship. That goes for any size company, but it’s usually the smaller ones that rely on emailed invoices and corporate credit cards.
Others might have a process but it’s not documented. Only those directly involved know how it works, making it challenging for extended partners to understand and follow it. (Not to mention those in Accounts Payable who are out of the loop and waste time chasing down the “vendor” information and getting approval.)
The solution to this challenge is to develop a co-op marketing claims and reimbursements process, document it, and share it with your partners. You can use a standard one for each agreement with boilerplate language that you adjust as needed. Ensure the process document is stored in a central location at your company so it’s searchable and accessible to those who need it.
2. Why Does It Take So Long to Pay Out Partners?
Co-op marketing works because both partners share the financial load. If one partner takes months to reimburse the other, the responsibility falls unfairly on one partner. They’ll stop “cooperating” and cut out the other partner from the outcomes/goals, defeating the entire purpose of co-op marketing.
The solution to this one is easy: pay your partners promptly. It doesn’t matter if it’s automated or a manual payout; ensure it’s done regularly and promptly. Reimbursement management platforms do this automatically as they’re set up for this sort of process and relationship. Many invoicing/accounting apps automate this, too, as long as the invoices are entered into the system.
3. Ditch the Manual, Paper-Based Reimbursement Process
Another challenge is dealing with manual, paper-based reimbursement processes. Yes, some industries and companies still handle vendor invoicing through faxes and snail-mailed paper invoices. Handling them like this often leads to delays as the invoices can get lost, misfiled, or damaged, especially if the partner isn’t used to handling paper invoices anymore.
Switching to a digital invoicing management system helps avoid this challenge. Regardless of size, most companies use an app or software to handle claims and payouts. It’s sometimes part of their accounting package, while sometimes it’s a stand-alone app used specifically for reimbursement management. Regardless, switching to a digital solution saves everyone time by automatically handling and managing the mundane parts of the process (submitting, reviewing, approving, and paying out).
4. Be Responsive to Your Co-Op Marketing Partners
We get it, sometimes you get so busy you don’t have time to respond to every message from your co-op marketing partner. That’s no excuse today, with so many ways to stay in touch. Unless you work in the same location and always see them, you’ll want to keep those lines of communication open.
No one wants to be ghosted by a supposed partner, especially with money involved. That waiting invoice might significantly impact their cash flow, so don’t ignore them. The solution here is to stay on top of communications.
Respond within a reasonable time, explain why there’s no time for an in-depth explanation, and pick up the phone if it’s a serious issue (or too much time elapsed since you last responded.)
Be a Good Co-Op Partner
Co-operative marketing can be a good solution for smaller companies looking to multiply their budgets and increase their reach. Avoiding the pitfalls of claims and reimbursements ensures everyone enjoys the benefits. That means developing a process to send, review, and approve claims so everyone knows what to expect. Ditch the manual processes to reduce payout delays and ensure everyone’s paid promptly. Finally, co-operative marketing works best when both partners are responsive to communication and keep everyone in the loop.
If you’re looking to revamp your co-op marketing claims and reimbursements process, contact an expert at Mediagistic today. We’re here to help you optimize the process so it works smoothly for everyone.
