Structured Management Of Supplier Global Discounts & Surcharges

Purchasing thumbDiscounts are often used as a way to promote returned custom, reward loyalty, promote increased volumes, spend and maximise sales, with surcharges being applied on the flip side to cover any additional costs incurred. Although business tend to associate these with their own sales, those on the receiving end of the discount need to account for these on purchases, discounts and surcharges will often originate from suppliers and be passed down through the supply chain.

While special offers and discounts on individual products would be simply handled by recording the price to be paid against the line, global discounts and surcharges are applied to the overall order totals that could comprise multiple products in varying quantities.  Common examples could be suppliers offering percentage discounts for spending over a certain amount (5% off when you spend over £500) or a surcharge for not hitting the minimum spend limit.  Due to the varied nature in which these type of discounts and surcharges can be applied, achieving fast, effective management can be quite a challenge.

Each business will choose to handle these discounts and surcharges differently, with some choosing to distribute across all lines on the order while others will simply make it applicable to the order total. With purchase orders potentially containing hundreds of lines, manually entering discount or surcharge details to each relevant purchase order can be a complex and time consuming process. Also as these supplier discounts and surcharges will ultimately have a large impact on the eventual product pricing and profitability pulled through to sales, it is essential for businesses to ensure costs are accurately recorded so that correct margins are retained. Therefore it is important for businesses to have an adaptable method of managing supplier discounts and surcharges in place so that purchase orders are processed in the most accurate, efficient and controlled manner possible.

10157 - PO Global Discount FormEasy Application of Supplier Discounts & Surcharges To Purchase Orders

OrderWise already provides businesses with the ability to store supplier special prices for offers when a certain volume of a product is ordered and adjust line costs on an ad-hoc basis. However for instances when a discount or surcharge is applied to the order total, new functionality has now been added in version 9.12 of OrderWise to enable users to easily apply global discounts and surcharges to purchase orders and their subsequent invoices.

Working in an almost identical way to the discount/surcharge functionality already available against a Sales order, once switched on permitted users can add purchase order discounts and surcharges types to the system. These can then be applied to purchase orders using the discount link button within a Purchase order with the subsequent discount or surcharge applied to the net order total.

Ensure Discounts & Surcharges Are Reflected In Item Costs and Margins

Businesses have the option to distribute the discount or surcharge over the lines on the PO based on value, this can be defaulted against the item itself, defaulted against the discount/surcharge type or done manually when added to the PO.  By choosing to distribute, companies will ensure the price recorded against the stock when it is booked in accounts for the discount or surcharge element enabling a true margin to be recorded and accurate stock valuation to be achieved.

With this enhancement to OrderWise Purchasing, users are able to achieve simple, structured management of supplier global discounts and surcharges. Businesses can benefit from applying these to purchase orders more easily than before, ensuring high accuracy margins are retained and competitive pricing is passed through to customers where available in order for all sales opportunities to be fully maximised.

For more information on OrderWise Purchasing download the brochures or watch our videos.

To discuss your requirements in more detail contact us today on 01522 704083.

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