Why Use PeliKalc™?
Food manufacturing and sales is a complex business. The many layers of distribution, redistribution, brokers, buying groups and sales people create a challenging environment when tracking the percentage that each layer demands. The cost associated to brokerage in the food industry has traditionally been difficult and time consuming to calculate and audit. Most food companies have very little visibility to this all important cost.
While sales teams are faithfully managing brokers and buying groups, the accounting team is trying to keep up with the minutia required to properly track and pay the brokers. This is further complicated when a re-distributor such as DOT Foods is inserted into the equation. The re-distributor model adds more layers of payments, deductions, marketing programs and buying groups thereby complicating the brokerage cost accounting tasks.
Depending upon the size of the company tens of thousands to hundreds of thousands of dollars are lost annually to this seemingly benign function. Some companies calculate their brokerage costs on an item and invoice basis, daily dedicating people and spreadsheets to this function. Other companies rely upon the brokers and buying groups to invoice them each month and do not regularly audit these charges.
Virtually every accounting system available today tracks one sales person to a customer and does not have the ability to add additional layers for brokerage commissions or buying group commissions. This is not a deficiency in these systems but rather a complex problem that accounting systems do not wish to address.
This has created an opportunity for a new application that aggregates data from other systems through a simple Excel spreadsheet import in order to calculate and monitor broker and buying group costs. The Brokerage Application affords the food company a system that can reduce their costs dramatically and increase accuracy and performance metrics. Instead of maintaining brokerage percentages in a myriad of spreadsheets, the Brokerage Application maintains all of their business rules and exceptions for each customer, item, broker and buying group that will accurately maintain and calculate costs while giving high visibility to this important expense category.
Further, this visibility to the multiple layers and percentages that brokerage and buying groups cost the company gives management the tools to more intelligently negotiate brokerage contracts.
The first company that used this software went from two dedicated staff working in this arena down to one person spending about an hour a month to import and maintain brokerage calculations and produce a detailed brokerage and buying group statement for each entity involved. These statements were then used to enter accounts payable items into the accounting system.
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