Feb 26, 2020

How to manage claims in your Vendor Rebate Programme

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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.


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