Business-to-business rebates, or B2B rebates, are rebates a seller pays to customers or buying groups. They are popular because they add value to both buyers and sellers, as the buyers get a better price, and sellers create a loyalty incentive. This leads to collaborative goal setting and growth, which is great for everyone!
Managing customer rebates effectively is essential – The first task of rebate management is setting up agreements. Usually, sales teams must closely monitor customer performance in relation to the customer rebate agreement if both sides are to truly gain from their collaborative business planning. If necessary, they will notify clients of anticipated sales shortfalls and actively promote the behaviours required to ensure that the desired number of rebates is achieved. Accruals must then be managed, and customer rebates paid out, before the final task – tracking profitability and true margin analysis, which factors in trade agreements to calculate profits or losses. Designing and agreeing on renewal agreements according to commercial analytics ensures that the renegotiated rebate agreement is fit-for-purpose.
So, what are the implications of poor B2B rebate management?
Most importantly, poorly managed B2B rebates may lead to disputes between buyers and sellers, which is of course detrimental to the success of future business Disputes can happen as a result of inaccurate rebate and sales data due to poor practices such as using spreadsheets to record statistics,instead of using a specialised rebate management solution. Disputes with customers cause time-consuming issues and claims that not only waste time but cause friction between both parties, negatively impacting future interactions. Other issues with poor rebate management include compliance risk, inaccurate data input, and unreliable forecasts.
How can poor B2B rebate management be avoided?
Managing day-to-day business operations alongside managing B2B rebates can be overwhelming. There are rebate management solutions that can automate the process and provide reliable, guaranteed support. e-bate started as a team of rebate management specialists and software developers at an award-winning IT consultancy. Our team specialised in building bespoke rebate solutions for companies that could not find a solution to fit their needs.
Our customer rebate software provides our customers with numerous benefits:
The e-bate platform will guarantee that you have up-to-date, precise purchase and rebate amounts to manage your cash flow and confidently negotiate for future business deals. As a result, you attract motivated and devoted customers whilst lowering your overall sales costs.
Our excellent reporting means that it is easy to identify new issues and high-priority areas, as well as simply track performance of suppliers and customers.
And, no more spreadsheets!
We hope this short guide to rebates has helped you understand the basics. To see e-bate in action, contact us to arrange a demo to see how automated rebate management can revolutionise the way you do business.