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The 7 stages of deal management

Posted by Elizabeth Allcock on October 5, 2020 10:00:00

The deal management process can be very complex with various trading agreements and many departments involved. The deal management process is a series of actions that will guide you through each stage as you develop an effective way to handle each deal and see them through to their conclusion. It's important that you understand each stage of the deal management process so you can know what to expect and ensure optimal deal management. Businesses often make use of a deal management system to streamline their processes and claimed on missed rebates.

1. Process planning stage

The planning stage is one of the most important stages of deal management. You need to create a deal management process that can be implemented company-wide and that suits your company's needs and resources. Your deal management strategy needs to be a flexible, streamlined process that accounts for all kinds of trading agreements. When developing your strategy, you need to think of things such as what kind of deals your company is working with, who is responsible for what stages of the process, what issues have occurred in the past, and what resources are needed to implement the strategy. Once your deal management strategy can answer these questions, you'll know that you're ready to begin. Without a defined process in your business there is a greater risk that your agreements will not be beneficial, the cash benefit will not be realized as soon as possible limiting cash flow and you will encounter problems at time of audit.

2. Process implementation stage

After outlining your deal management process, it's time to implement your plan. Generally, this involves the deployment of an automated deal management system like Enable to set up and execute your B2B deals and rebates. Part of this involves importing all of your data and onboarding your suppliers into one centralized platform. Onboarding is a key part of the implementation stage as everyone involved needs to know what your goals are and how to use the deal management software that they will be using. If your team and suppliers are unfamiliar with either of these, they could introduce a number of issues and errors into the deal management process. This also means making sure that your team are aware of the new process and following the procedures which will ensure deal management is more reliable and efficient.

3. Pre-deal stage

Now that you have the foundation for your deal management process established, it's time to begin implementing it by creating new deals with your trading partners. This involves negotiating a trading program that suit your needs and helps you increase ROI. A key part of this stage is ensuring that your commercial team – responsible for negotiations – have visibility of the data needed to negotiate beneficial agreements. This means providing them with historic transaction and rebate data as well as a forecast for the upcoming period and letting them model different deal scenarios using this data.
Once both parties have agreed on terms and signed the trading program (usually via e-signature) it's time to move on to the next stage. It's important to keep track of the audit trail, who handled the documents and when, it will come use in future audits and if any conflicts were to arise.

4. Handover stage

Once a trading agreement has been created and signed, it's time to hand it over to the people who will be executing the deal. Usually, the people negotiating the deal are different than the people managing it or collecting the earnings. For example, commercial teams are often vital to negotiations, but some businesses have a dedicated rebate manager or rebate accountant responsible for tracking and collecting earnings.

In this stage, it's important to ensure a smooth handover so everyone involved in the deal management process knows what they need to do to remain compliant. Take the time to walk everyone through the details of the deal so that you can confirm individual roles, responsibilities, and milestones. This will ensure that the true benefit of the deal is realised and there can be fewer discrepancies between what was agreed and what actually occurs.

5. Deal stage

Once you have created and configured a trading program, you will now need to create a deal within it. This is the third and final stage involved in setting up your trading agreements. A deal is essentially the main aspect of Enable that actually ‘earns’ your business rebate. Poor deal management can create problems for your business, that's why it's important that you constantly analyze your deals so that you can ensure that your finance team accrues correctly and is not incorrectly stating the financial position of the business.

With Enable you can utilize one of many reports to track your new deal, so you can rapidly identify ways to steer purchasing and sales behaviour to maximize profit. Having the insight to know how close (or far away) you are from certain incentive tiers and what the expected benefit would be if you met them will allow you to determine the minimum spend that would increase your earnings substantially.

6. Pre-renegotiation stage

The deals with your trading partners don't always last indefinitely so there are several ways that a deal can end. You may arrive at the termination date, it may need to be renegotiated due to conditions outside your control, or you choose to terminate it prematurely. Choosing to end a deal in some of these ways may have possible penalties or terms that you need to pay attention to. That's why it's important to monitor your deals that are close to expiration. This way, you can see what needs to happen with a deal and evaluate whether you want to let it end or renew it. This will also require comparing the expected benefit from the actual benefit and tracking this alongside the overall growth of the business so that you can be more data driven in your decision to renegotiate or terminate a contract. A deal management system that comes with automated notifications and alerts makes sure you never miss a renewal date or other important due dates, ensuring that this also has extensive reporting and analysis capability will also allow you to use your data to drive your renegotiations.

7. Post-deal stage

If you choose not to not renegotiate a deal, there are still some actions you need to take. There may be termination conditions or issuing / paying any final invoices. Once you've done this, it's time to archive the deal. By organizing it this way, you can access it later and see if there's anything you would do differently. A deal post-mortem can provide you valuable insights into your deal management process so you can make changes and improve it. For example, why did this deal not earn as much as we expected? Did we underperform on our targets or were there other factors at play?

What’s next for your deal management?

The deal management process requires careful preparation and monitoring in order to be activated properly. Any mistakes in the deal management process can cause major setbacks and open your organization up to missed rebates. By going through the deal management stages described above, you'll be able to get a better handle on the deal management process, avoid a wide range of mistakes and pitfalls and collect rebate earnings due on a much more consistent and reliable scale.

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Topics: Deal Management