How multi-brand electronics dealers reconcile trade schemes

Dealer trade schemes are incentives an electronics brand pays a dealer for buying, selling, or promoting its products — volume rebates (QPS and QDS), price protection on stock, and free goods. Most arrive after the sale, as credit notes or goods, not as a discount on the invoice — which is exactly why they are easy to lose track of.

Because a multi-brand dealer runs a different scheme circular for every brand, in different formats, the money owed sits scattered across brand portals and monthly statements. Reconciling it is the difference between the margin you think you made and the margin you actually earned.

Scheme money reaches a dealer three different ways. Each reconciles on its own terms — a missing credit note and a short-shipped gift are not the same problem.

A QPS (Quantity Purchase Scheme) claim is a volume-based incentive an electronics brand owes a dealer for hitting a purchase-quantity slab in a period. Dealers accrue QPS as they buy, then claim it back. Reconciling QPS means matching what the scheme circular promised against what the brand actually credited.

QPS rewards how much a dealer buys; QDS (Quantity Delivery / Sell-out Scheme) rewards how much they sell through. A dealer typically earns both on the same product line in the same period, which is why total-margin reconciliation must net them together rather than track either alone.

Net Landing Cost is a dealer's true per-unit cost after every brand scheme, discount, and rebate is subtracted from the invoice price — and every added cost (freight, 194R TDS, non-creditable tax) is added back. NLC tells a dealer whether a deal is actually profitable, not the invoice price.

The formula, honestly: invoice price − all scheme credits − price protection + freight + non-creditable tax + 194R TDS.

Price protection is a brand credit that compensates a dealer when the brand cuts a product's price while the dealer still holds old, higher-cost stock. The dealer claims the per-unit difference on unsold inventory. Reconciling it means matching the brand's price-drop notice against on-hand quantity and the credit actually received.

Dealer scheme reconciliation is a three-way match: the scheme circular (what was promised), your own purchase and sell-out data (what you did), and the brand's credit notes (what was paid). The gap between promised and paid is the recoverable claim.

1. 1Record every scheme circular — brand, type, period, and the promised amount or free-unit quantity.
2. 2Log your purchases and sell-out so you can prove the slab was earned.
3. 3When the monthly statement lands, find the credit note for each claim and read the amount actually paid.
4. 4Compare promised vs paid, claim by claim. Short-paid and missing credit notes are the money to chase.

Dealers under-recover because promised payouts live in circulars while actual credits arrive as scattered credit notes, months later, with no line-level reference. Without a claim-by-claim match, short-paid and missed claims stay invisible — especially across many brands. The fix is a tracker or reconciliation that surfaces each shortfall against the specific slab that earned it.

A financial (commercial) credit note settles a scheme or rebate without adjusting GST — the dealer does not reverse input tax credit. A tax credit note adjusts the original GST and requires a proportionate ITC reversal. Which one a brand issues changes the dealer's true cost reduction, so a scheme reconciliation must classify each credit note before it trusts the number.

Under CBIC Circular 251/08/2025, a post-sale discount settled by a financial or commercial credit note does not force the dealer to reverse input tax credit, and is not treated as a service unless there is an explicit promotional agreement. Classifying each credit note — financial vs tax — is the first step before trusting any scheme number.

Under Section 194R, effective 1 July 2022, a brand giving a dealer in-kind benefits — including free scheme goods — must deduct 10% TDS once the value exceeds ₹20,000 in a financial year. When the benefit is wholly in kind, the brand pays the TDS itself. Dealers record the benefit as taxable income, which is why 194R belongs in every Net Landing Cost calculation — as a recoverable credit and cash-timing line, not a margin loss.

A spreadsheet is where most dealers start — and it works, until the brand count and credit-note volume outgrow what one person can check by hand.

Capability comparison, built-to. Run your real files to see your own numbers.

Estimate your leak in about a minute with the free Scheme Leakage Audit — it shows where QPS, price protection, credit notes and free goods slip past you and roughly how much. Then let MarginOps reconcile every scheme against your real statements when you want the exact number.