Maximise your income from supply contracts, understand the 'net net' cost of goods and derive a true Gross Profit for every product you sell

In low-margin businesses - especially in retail and wholesale models - every opportunity to squeeze increased profit has to be explored, examined and harnessed. Years of creative work between buyers and suppliers has led, in many cases, to complex multi-layered incentive programmes for supply-of-goods contracts. These incentives - if measured, met and collected - can effect the net cost of goods by as much a 10%.

Does your business manage and collect every incentive, every time, through effective Contract Spend Management?

Many business wish to operate a 'net net' cost of goods model, but long-term agreement, corporate culture and supplier best value often work against this. 'Net net' simplifies administration and decision-making - true gross profit on 'net net' cost of goods is a trivial calculation - but the cost, risk and scale of change needed to get to 'net net' can be terrifying.

At Atheon Consulting we can help you to model the commercial structure of your supply contracts, including all of the products purchased through them, in order to derive real-time calculated 'net net' costs. We help you to identify and record every contract incentive, including:

• Overriders
• Volume/value-based rebates
• Short-term promotional incentives
• BOGOFs
• Targeted rewards
• Stepped rewards

Having modeled your contracts, using PurchaseTeam Contract Spend Manager, we can link it to your spend data (typically line-level invoice data, approved for payment) in order to show you the effect of your spending patterns on 'net net' costs.

The result is a definitive repository of all contract terms, products and spending patterns that shows you exactly what to claim from suppliers, and when. More than this it shows you how your actual spending corresponds with forecasts, and what effect this has on 'net net', what to provision/accrue each financial period, and all opportunities to trim or increase spending to maximise targeted benefits.

Effective Contract Spend Management brings actual costs in line with forecasts, and helps you to manage a more profitable business. Contact us to discuss your current approach and explore whether we can help you improve upon it.