Profitable business growth for suppliers to the building industry

Posted by David Hunt on July 25, 2017 08:23:00

Profitability for suppliers to the building industry — including building materials, plumbing, HVAC and electrical distributors — is often very closely dependent on the amount of rebate they can negotiate and claim.

No surprise then, that many businesses across this sector tell us that the sheer volume of categories and the complexity of rebate deals means that administering rebate claims is a mission critical element of their business. 

The rebate accounting function alone can make the difference between a good and a great financial year.

Yet this is the scenario we come across very often when we talk to building materials suppliers across the world:

  • Whilst no business wants to grow without controlling profit margins, we are surprised by the number of rebate accountants who still rely on simple spreadsheets to monitor and manage those mission-critical rebate claims!
  • Procurement teams are challenged with making better deals across thousands of categories using information pulled together from disparate systems.
  • Suppliers are reluctant to increase rebates as they lack good information too!

In this blog, we are going to examine the impact that automating the rebate accounting function, and providing accurate consolidated data for procurement teams and their suppliers has on profit margins and business growth.

Rebate management systems  provide varying degrees of sophistication — from ERP modules that provide some functionality for tracking rebate accruals to DealTrack which provides functionality above and beyond getting rebate claims right.

DealTrack Rebate Management System is, as it’s name suggests, focuses on systemising all the processes around managing and tracking contracts that contain rebates.

However, the end result isn’t JUST accurate rebate accruals.  DealTrack delivers much more than that.  DealTrack helps businesses grow profitably.

Initially, simply implementing DealTrack helps improve profits by accurately tracking rebate accruals and automatically raising rebate invoices. 

In fact, shortly after going live with DealTrack 100% of customers have identified previously missed rebate claims. 

We have seen cases of missed rebate claims amounting to 7 or even 8 figure sums! But that’s not the end of the story.

Over the longer term, DealTrack helps companies grow profitably by aiding their ability to negotiate better deals. Better supplier relationships leads to better deals.

Let me explain... DealTrack has several features that improve the productivity of the commercial team:

  • Supplier agreements are systemised without loss of flexibility

In other words, no matter what level of complexity is involved in your supplier contracts, DealTrack will enable you to reflect the agreement within the system and be able to track every action taken against that agreement. 

No more agreements hidden away in filing cabinets.

In reviews carried out by several organisations, no other software provides the level of flexibility that is provided by DealTrack.

  • Flexible approval workflows

Supplier agreement approvals are obtained online through an inbuilt document workflow that date and time stamps every approval.

No more disputes over who agreed what.

Workflows can be set up to include people within and outside your organisation with permissions appropriate to their role in the business.

  • Supplier portal

The supplier portal enables suppliers to view activity against contracts to avoid disputes over what is claimed.

No more copying and pasting information — all parties can view the SAME information online.

  • Automation

Automatic gathering of purchase and sales information from other systems, calculating accruals, invoicing or debiting the supplier, and reporting all activity removes a layer of complexity from the day to day management of deals involving rebates.

  • Deal modelling

DealTrack provides the ability to model deals and create what—if scenarios.

Gathering information about purchasing history at the category or item level is only the start of it.  This software gives the ability to factor in a range of variables, and in doing so arms the procurement team with insightful information on which to base supplier negotiations.

Dealing with “ship and debit” deals, retrospective discounts, tiered discounts, marketing funds and a host of other pricing strategies  is one of the principle ways that building materials suppliers agree suitable profit margins.

By providing timely, accurate information DealTrack enables procurement teams to focus on the real issues — how to create innovative deals that are seen as a winning situation on both sides of the agreement.

No disagreements, better relationships, better deals

How can DealTrack improve your company performance?

To find out about our 3 step approach to business growth, listen to our recorded webinar on the subject with ex CEO of Saint—Gobain, Peter Hindle and our MD, Andrew Butt.

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