B2B NewsPet industry news5 Best Practices For Managing an Effective Rebate Program

5 Best Practices For Managing an Effective Rebate Program


- Advertisment -spot_img

Rebate programs were “invented” as a way of driving sales growth without simply reducing the contract price. By agreeing retrospective financial incentives based on actual sales, both the supplier and the distributor are working together to drive market share and growth. Effective rebate management refers to the management of discount claims that are based on volumes of purchases over time. To some companies, that rebate is treated as a bonus. But to others, rebate programs form a significant proportion of their revenue and for these companies accurate rebate management is absolutely essential.

What is a rebate program?

Rebate programs are a way of giving individual customers the ‘right price’ without driving the price downwards and they also create loyalty. Rebate programs are essential to operations in various industries including building supplies, electronics, retail, and wholesale distribution and can be offered to certain locations, on certain products or product groups and on certain types of transaction. This means that they can get rather complex and many are finding that “standard” business systems or manual processes such as spreadsheets don’t facilitate this complexity.

Types of rebate programs

There are many types of rebate programs and our rebate management software supports over 300 of them. Here are just a few rebate examples:

  • Supplier rebates – They represent a promise by the supplier to reward the distributor for achieving certain goals: selling more product, selling higher-value products, developing loyal customers, generating demand, and so on.
  • Customer rebates – Customer rebates are how large companies (like manufacturers) incentivise their customers, or vendors (typically those who sell to multiple groups of people, such as chain stores, buying consortia, distributors etc.) to sell specific products within a specific time.
  • Volume discounts – A volume discount is a change to the cost of a product based on the quantity of that product traded with your trading partner.
  • Retrospective discounts – If you have a deal with incremental percentage rates for specific turnover bands, then you will be able to choose to make it retrospective or non-retrospective. If retrospective, the percentage rate for the band of turnover reached will be applied to all historic turnover that applies to the deal

To view more rebate program examples click here.

How to manage your rebate programs better

The management and processing of rebate programs is challenging, with significant financial risks if something goes wrong due to loss of data or human error. Many rebate arrangements lack support in financial accounting systems, such as targeted incentives and multistrand rebates. Keeping a track of rebate programs when purchasing is decentralised or where the trading agreement is made by a buying group creates further challenges. Many companies work their rebate programs out in spreadsheets, relying on individuals to collate and input data manually. This rebate management process works in theory but it’s easy to see how it could be subject to errors or omissions. Alternatively, some companies rely on their suppliers to perform all the relevant rebate calculations for them, without ensuring it all checks out. Neither rebate management method is optimal, as they both create a wealth of issues if things go wrong — slow cashflow, loss of income, disagreements with suppliers, incorrect margin calculations — the list goes on! In order to manage rebate programs successfully, and reap the financial rewards they can bring to your organisation, there are certain practices you must take towards implementing an efficient and effective rebate management process.

5 steps for an effective rebate program

  1. Ensure mutual understanding with suppliers — prior negotiation of viable rebate terms with suppliers reduces any risk of disagreement between purchasers and suppliers with regards to the contract. Both parties should have access to the relevant data and calculations and be clear on terms of the rebate program in advance.
  2. Maintain compliance — a transparent audit trail will make sure that all relevant information about your rebate programs are recorded, allowing easier monitoring and auditing to take place. A rebate management system should provide a compliant process to eliminate the time and cost involved in providing evidence for rebate claims.
  3. Reduce uncertainty — ambiguously worded rebate programs, unclear procedures and over-reliance on individuals all provide room for error which could create cost and risk in your business. Systemize the content of rebate programs to remove any ambiguity.
  4. Keep track of earnings and incentives — the ability to accurately calculate and track rebate program earnings and forecasts is fundamental to reliable rebate accruals and maximising the incentives built into rebate agreements.
  5. Streamline processes — automating the collection of information about rebate deals and purchases and the reporting of rebate claims minimizes the need for manual intervention, reduces error and improves cash flow.

A dedicated rebate management system like Enable will make it easy to track complex rebates and ensure that all of the rebates negotiated in the terms of your agreement are captured and claimed.

Source link


Please enter your comment!
Please enter your name here

Latest news

「贵州日报·教育」聚势赋能 提质扩容——贵州财经大..

2023年11月21日贵州日报16版(点击图片,阅读全文)全省高等教育高质量发展大会对当前和今后一个时期全省高等教育工作作出部署,描绘了新时代贵州高等教育发展的新蓝图,干货满满、令人鼓舞、催人奋进。风 Source link


来源:新华社新华社台北11月6日电(记者刘斐石龙洪)台湾“历史教育新三自运动协会”6日在台北举行记者会,批评民进党当局为达成不可能实现的“去中国化”政治目的,进行不负责任的“去古文化”教育,牺牲学子们 Source link


8月13至16日,受中交疏浚邀约,来自云南怒江崇仁完小的19名师生代表来到上海,参加为期四天的“中交助梦?看世界”暑期访沪交流活动。崇仁完小坐落于海拔2000多米的横断山区。该校师生总共327人,学校 Source link

Bronchitis in Dogs: Signs, Causes, & Treatment (Vet Answer)

The information is current and up-to-date in accordance with the latest veterinarian research. Learn more » In dogs,...
- Advertisement -spot_imgspot_img

Symptoms, Diagnosis and Treatment – Dogster

Astra, the 6-year-old Cocker Spaniel exhibited several vague clinical signs like not eating every few days and occasional...

Ark Naturals Voluntarily Recalls Brushless Toothpaste Value Packs

Ark Naturals voluntarily recalls three of their “Brushless Toothpaste Value Pack” products after learning that one of their...

Must read

Lady Gaga and Cardi B Meet at the Grammys

What was expected of her was the same thing...

Jennifer Aniston’s Ex Justin Theroux Wishes Her Happy Birthday on Instagram

What was expected of her was the same thing...
- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you