WHY IBS DEALS - FREQUENT PROBLEMS ENCOUNTERED
A lot of companies face some Business challenges in managing vendors' trade funds. There is a lack of transparency and no system of record for all the vendor trade funds negotiated. Too much time is lost in correcting errors ,doing manual follow-up and search for reliable information.
The source of errors and litigation from lack of proper records of negotiations and contracts became huge, pushing to a lack of automation and reporting capabilities to support the trade funds management process.
From a human Perspective, a heavy manual process is carried out with each buyer and category manager managing its vendors in its own way with its own excel based on individual calculations methods.
It creates difficulties to capitalize on buyer's knowledge, vendor negotiations and agreements if and when a buyer changes jobs or vendors.
Concerning financial challenges, millions are lost each year due to improper record keeping, follow-up and non-optimized negotiations, and other millions in collection agency fees are spent per year to collect funds due to improper invoicing and collection follow-up.
The commercial finance lacks proper forecasting and budgeting of annual vendor trade funds, while operational finance require an automated invoicing/deduction process and payment follow-up.
From a legal side, major losses are due to audit and litigation fees to defend contracts. And no arrangement exists between departments of the company involved in the full negotiation process (legal, buying and finance for example).
“A PROCESS WITHOUT A SYSTEM:
LACK OF SUPPORT, LACK OF RELIABLE INFORMATION”
Most frequent issue is that too numerous data are available, but no needed information allowing an efficient preparation and follow-up of the negotiation is current. So, it creates some difficulties to consolidate supplier information from different sources and systems, to analyze conditions and to obtain accurate information. It is often lead by complexity to obtain a clear view between the negotiation and the reality.
“EACH BUYER HAS HIS OWN APPROACH TO PREPARE AND CONDUCT SUPPLIER NEGOTIATIONS”
So, In order to answer different retailers needs, a unique and efficient solution must allow to enforce supplier funding and contracts follow-up with:
- A simulation and negotiation tool to manage negotiation conditions at each level (supplier, groups of product groups, products groups, product), to compare negotiated conditions versus targets, and to standardize and automate work methods.
- A contract and amendment management to automate contracts and amendments based on templates and conditions captured, to calculate funding projections, and to manage cycle approval for statuses and negotiation process.
- An invoicing and payment follow-up to automate supplier billing or deductions, to calculate and reconcile projections against invoices and payments, and to generate automatic follow-up alerts on payments and delays.
“SUPPLIER FUNDING NEGOTIATION AND TRACKING”
OBJECTIVES OF IBS DEALS
- Profitability impacts
- Improve purchasing terms; reduced COGS(Cost Of Goods Sold) – simulate and evaluate the supplier's terms prior to agreement
- Complete bill back tracking & invoicing
- Integrate Category Management plans into negotiations
- Improve cash flow by appropriate receipts of negotiated conditions through automatic invoicing
- Generate detailed documentation and audit trail for validation
- Organizational impacts
- A complete toolkit for the buyer and Category Manager
- Work methods are standardized for a better communication in the organization
- Captures historical data and spreads buyers know-how
- Improves communication between the purchasing process players and web technology
- Cost reduction through an efficient human resource utilization
- Analysis and reporting thanks to a complete library of reports and KPIs
“REAL TIME FOLLOW-UP AND PERFORMANCES
OF THE SUPPLIER NEGOTIATION”
ibs Deals allows to automate and facilitate calculation of real and forecasted additional benefits with margins calculations at items groups and item level; and to follow-up invoicing and payments.
- A better information analysis
- A better supplier recognition
- A better preparation for negotiation