Vendor Terms Improvement[xf_one_full first min_height=” vertical_alignment=’xf-align-top’ align=” space=” margin=’0px’ margin_sync=’true’ padding=’0px,30px,15px,30px’ border=” border_color=” radius=’0px’ radius_sync=’true’ background_color=” src=” attachment=” attachment_size=” background_position=’top left’ background_repeat=’no-repeat’ animation_type=” animation_duration=’0.5′ animation_delay=’0.5′] [xf_textblock size=” font_color=” color=” animation_type=” animation_duration=’0.5′ animation_delay=’0.5′]
Terms – Days to pay and cash discount analytics
Historically, Vendor Terms Have Been Vendor Driven, but, it doesn’t have to be that way for clients using ATG’s business intelligence and analytics application. Our solution provides comparison of actual terms paid over any selected period of time by vendor, by category to an aggregated industry database comprised of participating ATG retail clients. Improvement opportunities are reported by vendor within each category. An implementation plan is then jointly established to capture the opportunity. Key to this plan is segmenting the opportunity by type of implementation strategy. Immediate change in terms verses individual vendor negotiation. Go forward improvement is tracked by the system with each data refresh measuring future terms against the historical base period to show the actual savings realized from improved cash discount and days to pay.
We re-purpose transaction data prepared for the recovery audit to our analytics applications. Data is refreshed quarterly. The analysis begins from the bottom up by first matching on UPC across the aggregated data and then normalizing UPC’s to the category parent child structure of the client user. Comparisons are recast to the client user category structure. Savings are first shown summarized with drill down reports showing opportunity at the department, category and vendor levels for both cash discount and days to pay using a net present value (NPV) calculation. Our experience to date is that the 80/20 rule prevails. Within each category, the preponderance of savings is represented by a short list of vendors. Furthermore, the largest opportunity to date has been in cash discount rather than extending days payable outstanding.
How Much Money Can You Save? Let’s find out together. Schedule a live demonstration using actual data (modified for confidentiality) to show actual term improvement examples. Use the contact button located at the bottom right of your screen to schedule a demonstration.
Watch the TradeView Analytics™ video Below.