How to Improve Your Rebate Management Solution

However, though B2B rebates are the ideal solution for cementing long-term buyer/supplier relationships and eliminating the risks involved with offering upfront discounts, they can quickly become complex and difficult to manage.

The problem, of course, comes when offering multiple rebates to multiple buyers across multiple products or combinations of products. Suddenly, the organisation is faced with a huge administrative challenge of recording all the various supplier agreements, tracking purchases over time against those agreements and managing all the rebate claims that eventually come pouring in.

This process is known as rebate management – and it can be a real headache for any B2B organisation, regardless of its size or the scale of its rebate programme.

The reason is that many companies start out using spreadsheets to manage their rebates. These are cumbersome, outdated, error-prone, and often manually maintained by only one individual, causing visibility issues and leading to claims disputes between buyer and seller.

As a B2B organisation, you may have even experienced such frustrations from both sides of the coin. As well as offering customer rebates, the likelihood is that you will be in receipt of supplier rebates as well from the companies you buy from – and you will of course need to track, manage and forecast the income stream from these B2B rebates continuously.

Again, inscrutable, hard-to-maintain spreadsheets are not up to this task, and indeed, many buying organisations simply leave it up to their suppliers to conduct all the relevant calculations and inform them of what is owed.

This is another risky strategy – if you don’t have a firm handle on the numbers yourself, margins can be impacted through missing out on claims that are rightfully yours.

Put simply, spreadsheets are neither a safe nor scalable solution for managing an effective rebate programme no matter which way the claims are flowing. As such, it is imperative for all companies that deal regularly with rebates to take a close look at the tools and processes they use to manage their rebate programme and consistently strive to improve efficiency, accuracy and reliability across it.

When spreadsheets are used to maintain and track rebates due or owing, problems persist. Rates can change regularly due to market conditions, which means price changes have to be maintained throughout the entire system by hand.

This is extremely time-consuming and prone to human error – which can prove exceedingly costly when dealing with thousands of prices, as many B2B organisations do.

What’s more, such spreadsheet-dependent rebate management programmes cannot recalculate rebates when changes occur – and so the process is once again manual, open to error and businesses cannot understand the impact of these changes. This, in turn, means organisations can’t make any reliable forecasts or models to aid with future decision-making.

In order to improve efficiency and the overall reliability of your B2B rebate programme, the best move to make is to do away with spreadsheets and replace them with a much more accurate and dependable solution.

For the best possible outcomes, implementing purpose-built rebate management software that provides a complete and automated end-to-end platform for calculating rebates, tracking agreements in real-time, building streamlined workflows for approvals and robust deal modelling is the most effective solution.

Modern rebate management systems come with built-in calculation engines that can process all of your rebate data in real-time, eliminating the need for manual data entry and giving you immediate, accurate results. What’s more, these platforms automatically recalculate rebates when things change, and automatically send notifications to relevant parties for sign-off and approval as and when required.

This means that rebates are not only tracked for every single update, change and communication exchange throughout the entire process, but also that their performance can be easily analysed. This is crucial, for the insights gleaned during analysis can be used to create accurate forecasts, as well as new deal models to facilitate better decision-making.

Indeed, with sophisticated rebate management software, organisations can take their scenario planning to the next level.

Powerful deal-modelling features enable organisations to undertake “what if” analyses on individual agreements, and use the software to understand the impact of changing the underlying rebate conditions – such as an increase in rate or change of supplier, or even to account for seasonality.

In short, by having all historical data at your fingertips – and not locked away in an indecipherable spreadsheet – you can not only see precisely how past rebate deals have performed, but how new deals currently being negotiated are likely to perform under various conditions.

As such, you are empowered with a future vision that allows you to understand the potential impact of new deals before you agree them commercially –and having this knowledge will give you more power when you head into negotiations.