Blacksmith Applications Announces Contract and Trade Management Version 2.0

Wilmington, MA (May 12, 2003) – Blacksmith Applications, Inc., a leading provider of contract management solutions for the foodservice industry, announced today Blacksmith Applications Contract and Trade Management Version 2.0, which offers foodservice manufacturers improved billback processing, enhanced trade checkbook functionality, profit margin-based trade planning, and sales project management.

“Blacksmith’s Contract and Trade Management Version 2.0 provides manufacturers with the ability to completely validate distributor billbacks and chain operator claims,” said Frank Lopes, Chief Technology Officer of Blacksmith Applications. “Manufacturers no longer need to worry about manually spot-checking billbacks and claims or having customers ‘double-dip’ on payment requests. With Version 2.0, manufacturers quickly and accurately validate all submitted claims on a line-by-line basis, catching erroneous data and preventing invalid payments.  Payments can now be made on actual customer performance and trade spending can be controlled.”

Blacksmith’s Contract and Trade Management Version 2.0 also allows manufacturers to strategically plan and approve their customer sales initiatives based on profit margins and not just volume. Programs can be created and approved based on SKU and product category profitability and/or on total program profitability.

“All manufacturers certainly rely on increased product volume to grow their business, but not necessarily at the expense of profit.  Any financial executive will tell you that profitable growth is one of the main goals of the company,” said Paul Wietecha, President of Blacksmith Applications. “Too many field sales people, whether direct sales or brokered, are not equipped with the necessary tools to let them know whether the deal they are proposing to a customer is good for the company as well as for their individual territories. In conjunction, management lacks the visibility to make the best educated decisions possible on whether to approve a deal or not. Customer offerings are based on a ‘sounds good’ rationale versus concrete criteria relevant to the company’s profitability.”

Blacksmith Applications Contract and Trade Management solution provides foodservice manufacturers with a standardized and automated solution to manage all phases of operator and distributor contract management, from contract creation and approval to reporting. Blacksmith Applications Contract and Trade Management Version 2.0 includes enhanced functionality to manage payments, profitability, and sales effectiveness better.

Blacksmith Applications Contract and Trade Management Version 2.0: Billback Processing

Foodservice manufacturers dedicate significant time and resources to validating and processing distributor billbacks and chain operator claims, yet most are unable to do these at the most accurate and efficient levels. Quite often, billbacks are only spot-checked for validity with the majority of line items being skipped over. The results are invalid payments on products and/or customers not covered on a contract, overpayment on incorrect product rates, and multiple payouts on the same product for the same customer.

The new functionality in Blacksmith Applications Contract and Trade Management Version 2.0 address these issues with:

• Line-item Billback Validation – Validate all billbacks and claims on a line-by-line basis, by customer, by product. Ensure payments are valid for product, customer, volume, time frames, and rates.
• Partial Payments – Process valid claim items while researching questionable items.
• Error Corrections - Correct submission errors such as incorrect pricing, dates, and volume.
• Trade Exclusion – Exclude distributor trade program payments from billback payments on national account business.

Blacksmith Applications Contract and Trade Management Version 2.0: Trade Checkbook

More often than not, when a manufacturer salesperson sits with a customer, the customer wants an update on how much money they have already earned off of the manufacturer’s programs and how much money they should anticipate earning in the future. There are also times when a manufacturer salesperson needs to motivate the customer to purchase more product (e.g., end-of-the-period loading) to achieve certain sales levels or growth targets.

For many salespeople, obtaining up-to-date purchase information for a customer, along with a status update of current program earnings and expected payouts, can be a cumbersome and frustrating process. Reports are often Enterprise-generated, can run a month or more behind, and do not necessarily contain all of the necessary information required to provide a complete and accurate earnings update or business review to the customer. Therefore, customers and salespeople are uncertain as to whether the customer has hit its target(s) and how much product it has to purchase to do so.

Blacksmith Applications Contract and Trade Management Version 2.0 addresses these issues by offering the following:

• “Near-time” updates of program earnings within 24 hours of program activity.

• Centralized and complete earnings and volume attainment updates by item, by invoice, along with elapsed program time.

• All-inclusive updates for all customer program types (e.g., rebates, fixed pricing, lump sums, etc.).

• Comprehensive payment updates including customer billbacks and deductions.

Blacksmith Applications Contract and Trade Management Version 2.0: Trade Planning

Field sales and national account personnel face increasing pressure to obtain new business, grow their volume, and increase market share. They face greater challenges, though, trying do all of this profitably. Repeatedly, contracts and programs are offered to customers without knowing the true profitability of those initiatives. This is not done out of a lack of need or strategy but out of a lack of systems and information. Determining product rates for SKU’s becomes a guessing game, with a salesperson and management hoping they’ve committed to a deal that makes the company money.

Without the knowledge of product and program profitability, sales are blindly creating and offering programs that could potentially have a negative impact on a company’s overall profit margin. Sales management inevitably has to rely on volume projections as criteria for program approvals. If this process persists, companies run the risk of living in a vicious circle that allows profits to stay stagnant or decrease over time despite any increases in volume.

Also, without detailed program visibility, sales and marketing can not determine program success rates, customer trends, or product profitability. In turn, sales plans by customer, product, and territory can not be developed at an optimal level. Without proper planning tools, sales and marketing are forced into a reactive mode to appease customers when negotiating deals instead of being proactive and offering controlled programs that optimize a company’s sales and profitability. 

Blacksmith Applications Contract and Trade Management Version 2.0 facilitates profitable growth by allowing the following:

• Scenario-based Program Planning – Create “What if” scenarios to determine the profitability of a program before presenting it to a customer.
• Online Profitability-based Program Approvals – Approve and escalate program requests online based on product and/or program profitability.  Ensure profit margins fall within acceptable levels for the company.
• Local Program Approvals – Enable local program approvals by salespeople within corporate guidelines.  Increase speed to market of customer offerings.
• Adjusted Profitability Evaluations – Adjust profitability evaluations of distributor program to account for distributor trade monies already earned by the distributor.

Blacksmith Applications Contract and Trade Management Version 2.0: Sales Project Management

Getting a customer to agree to a program is only half the battle. For a program to be successful, proper execution by various parties is essential. This can require the coordination of many resources – salespeople who call on the customer, internal resources, R&D, marketing services, etc. All of these can play an important role in successfully executing trade spending, and each needs to be deployed most appropriately and effectively.

Blacksmith Applications Contract and Trade Management Version 2.0 provides the means to execute effectively against customer programs by offering the following:

• The ability to create detailed projects and plans that are time bound, with assigned tasks, priorities, and roles.

• The assignment of key responsibilities by functional area.

• The ability to monitor project and user statuses and also customer activity on a daily basis.

• One view of all customer activity and next steps for all customer types.

About Blacksmith Applications

Blacksmith Applications is a leading provider of contract management solutions for the foodservice industry. The company’s solutions enable foodservice manufacturers to more effectively and profitably manage national account contracts, operator deals, and distributor trade programs. Blacksmith helps eliminate expensive, inefficient processes and reduce contract management costs, complexities, and overspending. The results are increased speed to market, improved visibility into customer and product performance, and controlled trade spending – all enabling increased revenue, more strategic and profitable decision making, the appropriate deployment of resources at all levels of sales and marketing, and greater overall profitability. Blacksmith Applications is headquartered in Wilmington, Massachusetts. For more information, visit www.blacksmithapps.com or call 1-866-572-9299.