Purchasing teams today are faced with multiple pressures: Reducing and managing costs and negotiate the best pricing agreements with suppliers. Many suppliers now offer vendor rebates as sales incentives to encourage buyers to purchase more and cement long-term relationships.
A rebate is different from a discount, however. Whereas discounts are applied at the time of sale, a rebate is only paid after a sale is complete. Vendor rebates are offered to promote certain products and reward buyers who make larger volumes of purchases.
They are also a way for the organisation offering the rebate to protect itself against smaller order volumes – since they are only paid after all conditions, including purchase volumes, have been met, rebates ensure that discount claims are based on actual (rather than “promised”) behaviour.
Rebates have become essential to B2B operations in a wide variety of industries and now commonly seen in pharmaceuticals, automotive, construction and FMCG. They are offered on particular products, combinations of products and certain types of transaction.
As such, they can quickly become complex – especially if, as a purchasing organisation, you’ve got multiple rebates from multiple suppliers with different conditions and terms to keep track of. To ensure that your margins are not impacted by missing out on claims that are rightfully yours, vendor rebate management software must be deployed to keep a handle on all the figures and secure your success.
Controlling Contracts and Eradicating Errors
Many organisations leave it up to the supplier to conduct all the relevant calculations and inform them of what is owed. This is a risky strategy. By not keeping control of the figures themselves, costly mistakes and loss of money can occur.
Even if they do attempt to keep track of rebate claims, many organisations use outdated methods and spreadsheets are the biggest culprits. These are cumbersome and not up to the task of managing complex, modern-day vendor rebate claims and agreements. The trouble comes down to the many different types of rebates that a purchasing organisation will likely be contending with.
There are volume rebates, growth rebates, retention rebates, mix rebates, ship and debit rebates and many more besides. Some will be based on percentages, others on purchase volume, still more on repeat purchases over time. The amount of data that each rebate claim generates is simply too much to handle successfully using manual processes.
Still, many organisations attempt to do this and inevitably, errors are made, while the time and costs associated with constantly keeping the spreadsheet updated mount up with each passing day.
Vendor rebate management software offers the solution. Naturally, vendor rebate information is an extremely valuable asset – but only if purchasing organisations can obtain, access and use it properly. Without the means to reliably and consistently capture rebate data – and share it with all relevant stakeholders –mistakes are likely to occur, and many rebates may be left unclaimed.
With vendor rebate management software, all vendor rebate agreements reside in the cloud for anyone with the right permissions to access at all times. This gives real-time visibility into your data, allowing you to view all calculations and keep track of the vendor rebate throughout its entire lifecycle – including any changes that occur.
Having ready access to such vital information helps organisations improve their purchasing decisions, track key performance indicators, manage costs and maximise earnings for all products and services across multiple vendors.
Another huge benefit of vendor rebate management software is the ability to create an audit log for every transaction undertaken in the system. Many contracts are often negotiated offline with only verbal agreements being made, leading to inconsistencies in documentation and what various parties believe to be the “live” contract.
Vendor rebate management software drives consistency by allowing you to store the contract against the agreement along with any other communication. All agreements are also digitally signed, which ensures they are legally binding.
Changes to contracts do occur, however and these all need to be audited with approvals granted at the appropriate level. With vendor rebate management software, audit logs are accessible throughout the system, providing users with the relevant information whenever it is required. Audit reports can also be generated at any time both internally and for external audit purposes, to demonstrate compliance.
Configurable workflow engines also enable organisations to define roles and responsibilities for each stage of an approval process. By creating systematic workflows that align with business rules and corporate governance, organisations ensure that key actions that need to be taken within the system are never missed, all sign-offs take place in a timely fashion and business integrity is never compromised.
Vendor Rebate Management Software from e-bate – The Ultimate Rebate Management Solution
Managing vendor rebate claims is an inherently complex process and one that cannot be left to error-prone manual spreadsheets. Instead, powerful, feature-rich vendor rebate management software must be deployed in order to optimise processes, reduce errors and improve relationships between buying and selling companies.
The e-bate platform allows companies to overcome the complexities involved in managing vendor rebate claims by automating processes, helping to reduce overheads, manage pricing and increase revenues and profit – all while ensuring compliance through a full audit trail and comprehensive approval workflows.
With a built-in calculation engine, document management system and automated workflow engine, e-bate is your single source of all rebate information, providing you with the insights you need to make proactive decisions that drive business value.