Session 10 - Creating a Robust Audit Trail
Simon Burrow
Mental Health and Wellbeing Trainer with specialist knowledge of the FMCG Sector (MHFA Instructor Member) | Mentor | 0797 928 7745
In Session 9 we talked about Planning and Preparation and how this supports our Mental Health by helping us maintain an appropriate level of control. But all that planning, and its subsequent outcomes, need to be accurately documented for that level of control to be maintained when questions are asked or challenges are made in the future.
So in Session 10 we will look at how we create what is one of the most important tools in looking after our Mental Health, a comprehensive and robust Audit Trail that effectively records what has been agreed between supplier and retailer.
The Importance of a Robust Audit Trail
As time moves on, people change, we get promoted or move to a new employer. Equally, if we remain in a role for any length of time, it is easy to forget what we did, who said what to who or what was ultimately agreed between seller and buyer. Moreover, with out quality documentation, which has been shared with all parties, we do not have the proof to back up our position during a dispute and this can be highly stressful.
For Example : It is not uncommon for retailers to employ teams of auditors to trawl promotional revenue to try and find un-invoiced income and bill suppliers retrospectively. While GSCOP has forced retailers to become more professional over the last few years, and has significantly limited what a retailer can do in this respect, it is still likely that an Account Manager will at some point be hit with a claim for un-invoiced promotional investment from two years previous. This is where a robust audit trail is vital to providing the unequivocal evidence required to prove whether or not a claim is valid. Only with such evidence, that has been shared between all parties, can a claim be defended.?
Of course it’s not just promotional funding that may need defending - any agreement between the two parties such as JBP, promotional plan, feature space, depth of distribution or pricing needs to be properly documented to be able to prove what was agreed when necessary.?
Audit Trail Documentation
As an Account Director, I made sure my teams documented everything, every meeting, discussion, agreement, text message or phone call without exception. It took time, but it was an investment well made and on many occasions it provided the proof I needed to prove my point, either internally or externally with the customer. As a result I never paid a single promotion audit claim because I had the evidence to prove that the correct amounts had been paid - I kept a tally of the number of claims that were successfully rejected and it amounted to several million pounds! Equally, if an agreed promotion didn’t happen, I had the evidence to prove that it had been agreed and the conversation with the buyer remained positive. Achieving this level of certainty supported by hard evidence is hugely supportive for our Mental Health, it means that we are in control of the discussion, can prove our position easily and can brush off any challenge with fact based information.?
So, what do we need to document and how do we do it? Below is an outline guide to the core control documents that we need to keep in order to build a robust Audit Trail between retailer and supplier. While every business is different, the basics will be consistent across all organisations
A Coherent Filing System
Before we document anything, we need to have a well planned and coherent filing system to file our documentation in a manner that keeps subjects together in one place, in date order, and makes them easy to access when needed. Without this, we will not be able to create an effective Audit Trail as we will not be able to easily locate everything relating to the subject in question.
Any filing system needs to adhere to the principles of ‘5S’ that we discussed in Session 9 and knowing where everything is both saves time and provides us with real confidence that we have all the facts to hand when needed. This in itself is a healthy protective factor for our Mental Health
Meeting Minutes
Every meeting, either face to face, virtual or by ‘phone should be clearly documented in a ‘he said / she said’ manner. All that is needed is a numbered set of discussion points, who said what, what was agreed, timings and responsibilities for action. This should be circulated to all parties to the meeting with the request that any errors are highlighted immediately. If no errors are raised, this document becomes the definitive record of what was discussed and can be relied upon in the future as being evidential if required. This provides us with a solid platform on which to rely and that in turn gives us the confidence required for a positive mental attitude
Don’t forget that a text message constitutes a discussion. Text messages should be screen shotted and emailed to the other party as confirmation of what was discussed. This prevents either party being able to ‘delete and deny’ what was agreed.
All meeting minutes should be filed in date and subject order so that they can be easily located when necessary. Keeping a consistent and factual record of every discussion gives a very clear message to those you work with and ensures you have all the facts to hand when needed and puts you in the driving seat if there is ever any dispute. Knowledge is power and it is very powerful in protecting our Mental Health?
JBP
Joint Business Plans are just that, they are a ‘joint’ agreement between retailer and supplier and detail exactly what each party signs up for and commits to. Whether its pricing, promotions, feature space, investment, service levels or cost to serve, a JBP represents the plan that will deliver the required results for both parties and it therefore needs to be documented carefully. Unless both parties sign up to it, it is not a ‘joint’ plan and isn’t worth the paper it’s written on.?
Every element of the agreement needs to be carefully worded and we should ensure that every clause is clear on the 6Ws, ie Who, What, When, Where, Why and hoW it will be delivered. With this level of detail, each party will be clear on their responsibilities and the impact of not achieving them.
But of course every plan changes, things don’t happen the way we expect, people move on, outside influences impact our agreements and we have to improvise, adapt and overcome to ensure we deliver our top level objectives. This is where a robust JBP supports our Mental Health - having an agreed objective and a mutual agreement to achieve it gives both parties a reference point to work to and if either party choses to break the agreement, the other has a moral right to redress. It is that morality that supports our wellbeing and gives us the mental strength to navigate challenging discussions, knowing that no matter how difficult things may become or how unjust the outcome might seem, we know that we have at least retained our integrity throughout.
Investment Control
Having agreed our investment, it is important that we document how it has been used. Investing is not ‘spending’, investment requires a return to make it worthwhile and must therefore be conditional on certain conditions, all of which will be detailed in the JBP
It is therefore important that we keep a very tight record of our investment and that means calculating it to the PENNY! It’s very easy to discuss investment in terms of thousands or millions, but when calculating it we need to be accurate. We will all have our different control systems, but whatever we use, it is important that we have the following details to maintain accuracy and control.
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Being in control of our money is key to our wellbeing, whether it is our personal finances or our commercial investment, and knowing exactly where we stand allows us to make well informed decisions. Once again, our Mental Health is supported by being in control of our lives and having the knowledge to argue our position when needed, and make decisions based upon facts rather than supposition.
Promotional Plans
As with everything else in FMCG, the promotion plan agreed in the JBP will change and this can be fairly stressful when it comes to delivering volume targets or balancing factory capacity. It is therefore important that we have a clearly defined record of what was agreed, and what it changed to, if we are to hold people to account on delivering their side of the JBP.
For the avoidance of doubt, and to provide evidence of what happened, every change to an activity plan should be carefully logged on a Gantt chart and shared with all parties involved. Having one document that is shared between buyer and Account Manager, and which represents the ‘definitive’ plan at any one time on which all forecasts are based,?removes ambiguity, it reduces the opportunity for error and helps to de stress the entire process.?
One missed promotion can be the difference between hitting an incentive payment or missing it and having a clear record of what happened is therefore vital. Knowing what changed, who changed it and why it changed puts us in control of a highly fluid situation and will therefore protect our Mental Health when we ultimately have to have a difficult conversation around year end achievements.
Document Version Control
It’s pointless having a well documented audit trail if we don’t have effective document version control. Having a version number and date stamp for every document provides us with a snapshot of exactly what was agreed and when. It is this simple discipline that pulls the whole audit trail together into a clearly evidenced history of events and provides us with the facts we need to support our position in any future discussion. When challenged, it is having the confidence to refer to clearly evidenced facts to prove what was agreed and what happened that supports our mental wellbeing.
Price Increases
Price increases are hugely stressful and have become a very regular feature of the FMCG landscape over the last twelve months. Multiple increases, often weeks apart, are an opportunity for confusion and must be clearly documented if we are to avoid the stress of price claims in the future.
Once an increase has been agreed, document it clearly on company letterhead, and email it to everyone involved. Show who it is copied to on the bottom of the letter, be clear on the delivery date and SKUs it applies to and show the ‘old price’ and the ‘new price’ in the appropriate currency, and file it carefully. A price increase is not a negotiation, it is not up for debate, it is a statement of fact that should be implemented on time in full with complete alignment across the business, and only with a coherent record and audit trail will we have the proof and confidence that we need for future challenges.
Sharing Documents Between Account Manager, buyer and the Wider Business Functions?
To provide credibility and ensure that everyone is fully aware of what was agreed and when, it is important that we share every version of our plans with all the interested parties on both sides of the commercial divide (suitably redacted for appropriate sensitive information). As an Account Director I focussed on detail, who agreed what and when. I ensured that my teams documented everything and shared it with those it impacted.
Some would say I was ‘professional’ and others probably thought I was ‘obsessive’ but either way I knew what was happening, I traded in facts, not supposition, and when challenged I had the evidence to prove that everyone involved knew what had been agreed. More importantly no one could deny what was agreed or their involvement in it and that put me in a position of real confidence and control which in turn protected my Mental Health. When the difficult discussions came around, I was fully prepared with the evidence to support my position.
As a main board Trading Director from a top 3 grocery retailer commented over dinner one evening - “My buying teams hate the level of detail that you provide because it holds them to account, but please keep it up because it means that they don’t lose sight of their long term objectives“. Another commented that “My Category Director has a lot to learn - please continue to keep him on his toes”. Comments like that from senior retail leaders suggests that it wasn’t just my Mental Health that was benefiting from having a robust Audit Trail!
Summary
A lot of what we have discussed in this session is common sense. We are all individuals and deal with things in different ways but we can all identify how we control our business and relate it to this article in some way. Equally every business is different and does things in a manner that is most appropriate for its purposes.?
But as we have discussed in previous sessions, what is so important for our mental wellbeing is that we feel in control of our lives, both personally and professionally. Creating an accurate and robust Audit Trail is a core element in giving us that control and this it why it has been discussed in so much detail here.?
When discussing Mental Health, there is no one formula that works for everyone. Mental wellbeing is a very ‘person centred’ subject and because we are all different, we will all react to situations differently. Hopefully this session and all the sessions in this series are providing you with some nuggets that work for you and help you to highlight what you could do differently to have a positive impact on your Mental Health.
In the next session, we will look at how we become aware of, and control, our own emotions and how we react to the challenges that we face on a day to day basis. In Session 3 we learned the importance of differentiating between those things we can control and those we cannot - in Session 11 we will look at some of the cognitive techniques that we can employ on a day to day basis to change how we perceive things and protect our Mental Health.
As ever, please look after yourselves, show yourself some compassion from time to time, and lets make this a truly ‘happy’ new year
Best Wishes
Simon
Simon Burrow
0797 928 7745
(Simon Burrow is a qualified Mental Health First Aid Instructor, accredited by MHFA England, and runs Mental Health Awareness and Mental Health First Aid training for industry. With 35 years experience of working in FMCG manufacturing as an Account Manager, Account Controller, Account Director and Commercial Director, working with all the major UK supermarkets at Category Director and above, he now specialises in providing Mental Health First Aid and Awareness training to the FMCG Sector. For more information and to discuss training your commercial and supply chain teams, please contact Simon on 0797 928 7745 / [email protected])