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Best Practices for Operator Accrual Management


Are you looking for a better way to accurately predict weekly and monthly forecast calls?

Worried that your accruals are wrong?

Do the dynamics of operator deals cause your head to spin?

Is quarter-end resulting in constant concern that accruals are way off?

If these fears around accruals sound familiar….

you’re in the right place.

Managing distributor and operator accruals can be time consuming and inaccurate. When it’s not done well, it’s costly. If you need a better way to manage accruals and want confidence in the accuracy of your data, then Blacksmith TPM accrual functionality is your ticket to a better night’s sleep.

Accruals account for the cost of trade programs by matching expense to revenue at the time the transaction occurs (rather than when payment is received).


How Will Your Company Use TPM Accrual Functionality?

💲 The trade finance team, who manage trade programs, settlements and the month-end-close processes, are the primary users of TPM software’s accrual feature.

💲 The controller’s group benefits because they can view the exact amount accrued to each General Ledger and offset entry to the Balance Sheet account at any point during the month.

💲 Marketing and sales are able to create brand and customer P&Ls during the month, enabling them to view the profitability of their business lines.


accrual management _ team benefits _ blacksmith tpm

The trade finance, controller’s team, and marketing/sales benefit from accrual functionality.


Accruals can be used in weekly and/or monthly forecast calls comparing Prior Year to Current Year or Prior Month to Current Month. And, the expense is reported in the Business Unit’s P&L by fiscal month, quarter and year.

Using Blacksmith TPM accrual functionality, you gain expense visibility by program, customer and product. Our accrual system generates exact accruals through a simple, easy-to-use feature that interfaces with your ERP system; it can be used for operator and distributor trade programs as well as brokerage.

Your whole organization will benefit from using the software’s accrual functionality since it reduces risk of manual process errors and postings while saving time.

Foodservice Accrual Examples

Foodservice Distributor Accrual Example

Next, the manufacturer will pay $3,000 in trade rebates. This process is very accurate. Manufacturers accrue, then pay based on distributor invoiced purchases.

What about when you bring operators into the mix?

It becomes more complex.

A blended accrual rate bridges the gap when you don’t know what was sold until months later when the proof of delivery is submitted. Blended accrual rates are calculated using baseline spend and volume, while considering any other known business changes. An accrual program is created with the blended accrual rate and accrues directly off distributor sales.

Operator Accrual Example

Prior Year Distributor Invoiced Volume 100,000 cases
Prior Year Operator Trade Spend $100,000
Current Year Blended Accrual Rate $1.00 per case
Current Year Distributor Invoiced Volume 100 cases
Total Accrual (based on blended accrual rate) $100

Again, this is the best practice in accrual management because it’s based on actual sales activity.


8 Reasons TPM Keeps Accruals Accurate and Painless:

  • Accuracy: calculates daily, weekly or monthly accrual by using rates from the trade programs along with invoices for the current month.


  • Efficiency: replaces manual processes by using an automated, system-generated accrual posting to ERP which saves time and reduces the risk of error.


  • Flexibility: allows accrual postings at various levels of the product hierarchy.


  • Visibility: provides visibility into accrual throughout the month which allows companies to utilize this data to provide a more accurate forecast call.


  • Net Revenue: accruals can be posted by customer and product, thereby enabling in-month visibility to customer net revenue.


  • Functionality: accrues directly from the program for distributor trade and accommodates blended average operator trade accruals.


  • Simplicity: allows for quick set up and short user learning curve through a system platform that is easy to navigate.


  • Audit Trail: accrual posting files can be easily accessed and downloaded for analysis and reconciliation purposes.


Stop dreading your quarter-end accruals! Effectively manage your trade pricing with Blacksmith TPM software’s accrual functionality. Give your team the only tool with end-to-end visibility, automated invoices and payments, and simplified management of rebates and fees.