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blue-s.lt | Brand development funds

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Brand Development Fund Management

"Blue solutions" has created a BDF accounting solution in the MS Dynamics AX system.
The solution is designed for wholesale and retail companies that wish to account and have clear information about the funds / measures allocated by suppliers and by the company itself for brand development and promotion, the use of these funds and their impact on trade results.
The BDF module also allows for full evaluation and calculation of the turnover discounts received from suppliers and provided to customers when they are calculated based on a turnover achieved during a given period of time.
Elimination of the impact of BDFs and turnover discounts enables a more accurate evaluation of the actual profitability of products, channels and brands. 

1.   Brand development funds



The system enables the description and tracking of the funds allocated by suppliers and the funds formed upon the initiative of the company itself as well as the funds used for the calculation of turnover discounts. The following are the types of funds:
  • supplier’s fund;
  • internal fund;
  • supplier’s turnover discounts;
  • customers’ turnover discounts.
Funds have a defined period of validity. It is possible to check the fund’s balance at any time.
  • Contributions to funds / compensation for suppliers – use of the fund;
  • Contribution of turnover discounts – compensation of turnover discounts.
Budgeting option. It is possible to budget the fund’s income and expenses and to control the actual implementation.



2. Fund contributions / compensation, and use 

Contributions to funds can be made from the following sources:
  • a discount granted on goods in the same invoice issued by a supplier;
  • periodically calculated amount on the turnovers reached, i. e. a turnover discount is granted;
  • a supplier delivers goods at a zero cost;
  • an amount (or an amount limit) allocated by a supplier which is fixed or depends on actually incurred expenses for a given period.
The amount of the fund’s resources used is controlled comparing it with the amount of contributions to a relevant fund. The fund’s resources may be used in the following ways:
  • the selling discounts provided to customers on goods are issued in the same selling invoices;  
  • an amount calculated periodically on the turnovers reached, i. e. a customer is provided with a turnover discount
  • services are purchased for which invoices are received (e.g. advertising through the media);
  • advertising means are written off for advertising or brought to customers from own warehouses
  • expenses incurred within the company (e. g. publishing of an advertising magazine).

3. Commercial condition rules


Commercial condition rules are created in order to clearly determine the purchases / sales based on which the fund contributions / use and turnover discounts have to be calculated. The validity period of the rules, the calculation base, etc. are to be determined.
Calculation formulas to be used:
  • Fixed percent on the turnover;
  • Variable percent on the amount of the turnover;
  • Fixed/variable percent on the turnover at purchase pricelist prices;
  • Fixed/variable percent on the turnover at selected selling pricelist prices;
  • Amount for units;
  • Amount for kilos;
  • Amount for litres;
  • Difference between SF and a selling pricelist price;
  • Difference exceeding x%;
  • Advertising/promotion campaigns
The calculation of BDF operations may be determined by various conditions – brands, specific goods, subgroups of goods, suppliers, customers, branch offices, stores, etc. EXCLUDING conditions may be used.
Two-way calculation of BDF operations:
  • calculation of new operations for newly created purchase/sale documents;
  • cecalculation of operations after the revision of commercial condition  rules.

4.  Data analysis

For data analysis, inquiries and reports have been created for the control of BDF amounts, turnovers and budgets.

In the data analysis, the amounts of the purchase/sale of goods may be revised by eliminating the impact of the BDF and turnover discounts, in this way obtaining a more accurate purchase, sale and profitability result.