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News | Profectus Group: Audit, Compliance and Rebate Deal Management

David Jones finds the perfect fit with Profectus

David Jones is Australia’s leading premium retailer, and the oldest continuously operating department store in the world still trading under its original name.

The iconic department store first opened its doors in 1838 with the mission to sell ‘the best and most exclusive goods'. It offers customers superior products and services across national and international brands in fashion, beauty, food, technology, and homewares. David Jones currently operates out of over 40 stores in Australia and New Zealand including a significant online presence.

David Jones Case Study | Profectus Group

Discover Jones, Discover Deals

Like many organisations, managing vendor trading terms and identifying multiple financial considerations, such as rebates, is a challenge. But when you’re the nation’s leading department store with thousands of vendors and hundreds of sales and deals being offered on a weekly basis, managing everything at once can be overwhelming without the right tools.

David Jones Case Study | Profectus Group

“You also have to factor in staff turnover, or people growing within the business and moving departments,” said Juanique Vorster, Merchandise Planning / Buying Training & Development Specialist for David Jones. “People move and they take their knowledge with them, so unless agreements and terms are properly recorded in one place it can be really tough to get your hands on the latest information.”

It’s a common challenge in retailing generally, with many deals made and tracked through a mix of email threads, excel spreadsheets, as notes on a desktop or even simply kept in the mind of the person who made the deal.

A lack of visibility over deals can lead to a serious issue that many retailers face, particularly those with hundreds or thousands of suppliers and vendors: financial erosion. If rebates are not claimed or suppliers overcharge, even small errors or unclaimed monies can snowball over thousands of transactions into an amount that impacts the bottom line.

“We could raise hundreds of agreements in a week, especially around times where we've got promotional activity and clearance activity,” said Vorster. “We also have volume rebate agreements with all of our food vendors”.

So, for every single vendor, for every single month, there would be a rebate that would go through – assuming it was properly recorded and tracked.

If the terms of an agreement weren’t met or rebates haven't been claimed, the nature of fast-paced retail environments meant that tracking down a correction would be often impossible.

“There’s never a good time in fashion, and there’s never a moment to spare,” said Vorster.

“There’s just no way we could find the internal capacity to undertake extensive searches across all possible sources within which agreements were made or stored. There would have to be cross-referenced to see if everything matched perfectly – it would be like building a puzzle at the same time you’re trying to do everything else.”

The biggest risk in leaving rebates unclaimed, of course, is the bottom line. While one rebate won’t materially impact a business, multiple small rebates unclaimed can accumulate and have a measurable impact on profitability for any business.

“We all love what we do; we love fashion, and we love bringing our customers together, but ultimately the bottom line matters,” said Vorster.

“There's nothing sexy about chasing profit, let's call a spade a spade. But when you see those additional hundreds of thousands of dollars hitting your bottom line, that is fun.

“And any business, whether it's David Jones or Joe's Soaps down the road, needs a good cash flow and a good balance sheet to enable it to continue to grow.”

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In 2017 the business shifted its headquarters from Sydney to Melbourne. As expected with any shift, not all staff at headquarters relocated with the business, which would normally present a knowledge loss risk, particularly in the old manual days of recording terms and agreements by any means necessary.

“Not all of the paperwork and, importantly, knowledge travelled down to Melbourne with us,” said Vorster. “But when it came to food agreements and promotional rebates, it didn’t need to.”

“All Food Trading Terms, historical promotional monies and Food volume rebate collections remained visible and accessible for new team members and audit purposes.”

Hunting Hidden Deals

Stemming the financial leakage is one thing; tracking down what leaked out already is another thing entirely. Financial erosion doesn’t stop with a one-stop-shop to track rebates and agreements, and even access to the best systems will not prevent all errors or omissions as most of these stem from changes, staff turnover and some human-driven behaviours.

One of Profectus’ key solutions is its Audit offering, which leverages artificial intelligence and Profectus’ own expertise to analyse transactions and invoices in a select period to detect anomalies, which allows its customers to claim back monies owed.

David Jones Case Study | Profectus Group

Vorster said David Jones leverages Profectus’ Audit capability to further enhance its bottom line.

“We've actually just opened up our emails to protect us as part of that extensive identification of financial leakage,” she said. “Already we are seeing very low-hanging fruit in that space where we may have had terms agreed and commercial agreements with vendors that we may have just not collected as a result of somebody leaving the business.

“By using artificial intelligence and identifying emails featuring agreements and terms and referring back to our accounts payable data to see whether we've actually collected the money, we can identify leaks,” said Vorster. “From there we can claim the money from vendors who had previously agreed to pay it.”

And that’s why there’s no other store like David Jones…

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Think your organisation could benefit from our leading audit services or automated Rebate Deal Management technology? Want to hear more from clients like David Jones about their experience?

Get in touch with us today and we’ll connect you so you have the chance to speak to them directly and ask your questions!

David Jones Case Study
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