A rebate is a refund of a percentage of the entire purchase price of an item or service to the buyer. This payment is usually triggered by the total quantity of purchases completed during a specific time period. Rebates are usually intended to boost the amount of money spent by buyers. Accounting for rebates can be difficult, there are a number of factors that may lead to numerical and logistical mistakes. Here are some of the most common mistakes that are likely to crop up:
Poorly managed accruals
Managing rebate accruals can be a difficult task. Rebate accruals are defined as the amount of rebate that has been earnt, but not currently received. The rate at which a company earns rebates is frequently different from the rate at which they get them. For profits and losses to be accounted for accurately, rebate income must be accrued for, even if the money hasn’t arrived in the bank yet. Accrual agreements may change mid-process, further complicating accountancy.
Stop using Excel Spreadsheets (or Google sheets)
Microsoft Excel, Google Sheets, or other spreadsheet software programmes are great for many things, but rebate accounting is not one of them. Manually inputting data into spreadsheets is a lengthy process – labour hours can be spent more effectively elsewhere. It also increases the likelihood of input errors, that will inevitably impact accounting, producing incorrect results. Additionally, should there be changes to rebates in real time, it is extremely time-costly to edit data to create updated results.
Don’t rely on people – make use of technology
Today, there are technological resources that offer a more efficient, more accurate option to human resources – this is the case for rebate accounting. There is now software available for rebate management – it is by far the best way to improve your rebate management. The specialised software allows you to track rebates in real time, which is ideal given that accruals are often subject to changes and mistakes in tracking them are far from inconsequential. Use our end-to-end management system today, and say goodbye to updating spreadsheets manually. Contact us to streamline your rebate management process with e-bate straight away.