Overview

Contract prices are now a central part of the business for many Readysell users

Many sites either:

• Use cost plus markup contracts because managing contracts manually is too difficult. This results in inconsistencies. For example different colours of a product in a range having different sell prices.
• Use specific sell prices. But suffer from incremental loss of margin over time. As they do not have time to properly review the contract prices as sell prices change.

Readysell now gives you the opportunity to automate the contract price management workflow in Readysell 8. Allowing you to optionally use specific price contracts without the burden of managing all contract price changes individually.

Many parts of automated contract management have been included in Readysell for a long time:

• price increase management feature in the machine meters module,
• messaging feature in our alerts system
• reporting feature in our reports module
• Date range triggering in standing journals, scheduled cash book payments, meter count run price management etc.
• Mass update runs and price change runs that can be adapted to suit the contract price management's workflow

Workflow detail

You can only setup contract price management rules on individual product lines on a contract and the contract must have a workflow status of inactive.

You can highlight one, more all all products on the contract, then set the price management rules for those all those products at once by clicking the "Set Price Management Rules" button.

You can also manually set the price management rule for individual products on a contract by editing the settings on the "Price Management" tab below the product. But if you have more than one product to change, highlighting a group of products at once, as shown above is a lot faster!

The available settings for each product on a contract are as follows:

• Optional “auto review months” ranging from blank to any number of months. For example 12 for review every 12 months. Being the number of months between each automatic contract price management review cycles for that product contract.
• Optional  “maximum inactivity months”.  Being the maximum number of inactivity months that can pas for the contract price product before it will be suggested for removal from the contract by the automatic contract price management. Each time the contract product is used on a sale. The contract product last used date (read only) resets. If the contract price product has been unused for too many months. The next contract review will add that contract product to the contract review run and suggest the contract product be deactivated. There will be an read only automatically deactivated checkbox on contract products used by the system. This will keep a better audit trail than if the system automatically deleted contract price products.
• Optional "maintain gp" checkbox. If this property is set. The system will adjust prices up at each contract price management cycle if the gp percentage of the contract product as been eroded since the last contract price management cycle.
• Optional "Auto Increase Price %”. Being the percentage by which the price will be suggested for increase by the next automatic contract price management cycle.
• Optional “Min Cost increase %". If this percentage is specified. The system checks to see if the cost has increased by at least this minimum percentage since the last automatic contract price management cycle. If the cost has not increased. The last contract price management message is updated and the new suggested value of the contract price product will remain unchanged.
• Optional "maximum gp percent erosion" and "maximum gp percent erosion weeks". If the gp percent of a contract product erodes more than the "maximum gp percent erosion" and the loss in gp stays below that maximum allowed reduction for more than the specified number of weeks. An additional contract price management adjustment will be suggested for that product contract. The reason for adjustment message on the contract price management run line will indicate the reason for the additional corrective price adjustment.

Sales reps will regularly receive electronic messages, alerts, to do list entries and reports informing them in good time before any contract prices are automatically increased.

If a sales rep decides to review the contracts that are going to be changed. For each suggested change a contract price management run is created. The sales rep can view and edit those contract price management runs. They can't delete any lines. But they can flag the lines to be ignored and they can override the new suggested value (price).

There will be a full audit trail identifying all original suggestions by the system, changes that were flagged to be ignored by the responsible sales rep, manual price overrides that were added. The gp percentage impact of the original suggestions and of any manual overrides. No action by the sales rep causes any of the original information in the run to be changed. 

The original cost and gp% will be persisted onto each contract price product when a user activates the contract. When new versions are activated. The original cost and gp% will flow from the old to the new version. When a contact management run is posted and changes the line. The cost and gp% at the time of that contract management run cycle will be updated. For use by the next automatic review cycle.

It will also be possible to manually generate a contract price management run at any time based on user specified criteria. To handle cases where the site has not yet had a chance to setup the required rules in detail or where rapid response is required due to changing circumstances.

A set of reports will be available to analyse performance of the contract price management workflow.

There will be a list on a tab below all contract price products showing the detailed history of all contract price run lines that have been applied to that contract version.

There will be appropriate audit and history read only fields on the contract price product line. Such as last contract price management date, last contract price management action etc. 

Time saving defaults and mass updates

There will be an optional set of automatic update parameters that can be set for all contracts. As products are added to contracts. If global defaults have been set. Then those global contract management defaults will pre-populate into all new product lines on contracts.

There will be a button on the contract product lines to mass update the options for all or selected products on the contract. 

The mass update run will be able to change the product management settings on all or a range of selected existing contracts.

A recommended set of default settings will be deployed with the system. Those defaults will be easily modifiable via settings to meet the members exact requirements.

Automating the process

Every day the "contract management" task runs, normally at 11:00 pm local time on your system. You can change the parameter "ReviewLeadDays" to determine how far ahead you want the contract management task to look. The default is seven days in advance.

When the task runs, it will generated some draft erosion and draft review contracts. It will also automatically activate any contracts it created if your team have not reviewed the suggested reviewed contracts. You have a number of days (default 7 days) to manually override/cancel the automatic update before the task decides to activate it's suggested contracts.

The automatic update calculation will optionally consider a minimum cost change since the last update for each contract product. If the cost increase for the contract product is less than a specified percentage the automatic increase can be skipped.

The automatic update calculation will optionally consider a minimum maximum margin reduction since the last update. If the margin for the contract product reduces more than a specified percentage for a specified period of time. For example if the margin stays 10% less than it was for more than a month. An additional automatic update can be triggered early in response to the unexpected erosion of margin. 

 After the “early warning” days have elapsed. If the sales rep has not taken any action to stop the automatic update. The contract prices involved will be automatically updated. A electronic message containing the details of the change will automatically be sent to the sales rep. An optional message may be emailed to the customers involved.

The task will:

Generate a suggested contract price management run a specified number of days before the run would normally be required,

Electronically message the stake holders and send them a report detailing the suggested changes.

Automatically post the suggested contract price management run when the runs activation date arrives. unless the run's status has been changed to cancelled.

Electronically message the stake holders and send them a report detailing the changes that were actioned when the contract price management run is actioned.

Also optionally email effected customers using an appropriately formatted email message. Informing the customer contact of the changes that have been applied.