Increasing profit margin is the ongoing goal of all businesses, including those in the B2B space. It’s easier said than done, of course and involves (amongst other things) a fine balancing act of managing expenses against income; maximising productivity; developing winning pricing strategies; negotiating good deals with suppliers and creating attractive yet viable sales incentives for buyers.
For B2B organisations, great opportunities to increase profitability can be found by implementing a rebate programme – which indeed is why so many companies do it. However, if not managed effectively, rebate programmes are just as likely to eat into an organisation’s profit margin as they are to add to it. And this is where rebate management software comes in.
Managing rebates is a complex process – particularly if you’re trying to keep track of multiple agreements between multiple B2B partners. Rebates are offered to encourage loyalty and cement long-term relationships between buyers and suppliers.
Often, a rebate promotion will run for a long period of time, with numerous price changes occurring over the period as the relationship develops. Naturally, a massive amount of detailed information is generated throughout a rebate’s lifecycle – all of which must be properly recorded and managed with all calculations performed reliably and accurately for the entire duration.
Unfortunately, many companies still try to use spreadsheets to manage rebates. This is a slow, complicated, and error-prone approach. The fact of the matter is that as a B2B organisation’s rebate programme grows, so too does the amount of data that needs to be maintained – by hand! – on the spreadsheet.
Put simply, spreadsheets just lack the functionality required to manage all this information effectively, and sooner or later lead to companies missing out on claims, inaccurate accruals, and therefore margin erosion.
The good news is that there is an alternative solution – one that makes rebate management simple and convenient and drives profitability. That solution is rebate management software. Let’s consider four ways rebate management software can increase the profit margin for B2B organisations.
Reduced Administration Hours
With powerful rebate management software at the helm, all of your rebate calculations are automated via a real-time calculation engine.
The engine processes all of your rebate data as soon as it’s received, giving you immediate results and eliminating your reliance on cumbersome, time-consuming spreadsheets.
This slashes the time needed to administer, calculate and check your rebates, dramatically reducing administration hours and freeing up your staff to focus on other things, that are value adding.
Never Miss Out on Claims that Are Rightfully Yours
It may seem obvious, but, as a customer, if you fail to accrue and claim the rebates you are eligible for in an accurate and timely manner, you’re potentially leaving a lot of money on the table – or, at the very least, impacting your cash flow.
Unfortunately, this is exactly what happens to a lot of companies when relying on outdated practices like using spreadsheets to manage their rebates.
Another common occurrence is that many B2B organisations still leave it to their suppliers to inform them of what is owed. This is dangerous and can lead to disputes – disputes that damage relationships, are time-consuming, create further administrative burdens, and often end in inaccurate settling of payments owed.
With rebate management software, all contracts and agreements are centralised in the cloud, providing a single source of truth that can be accessed at any time and by anyone with the right permissions.
This removes all ambiguity and ensures all stakeholders – both on the buy-side and sell-side – have access to robust and fully auditable data, meaning no more disputes, and all payments owed are collected on time, every time.
As a buyer, you are likely to be dealing with tight margins, so your rebate calculations need to be just as tight. There are businesses that do not make a profit on certain goods or services until the rebate has been received.
Rebate management software ensures that you are always on top of your margins and working towards your next tier to maximise your incentive. The system will quickly and accurately calculate all prices, discounts and marketing spend that has been agreed upon with the supplier, plus will even automatically recalculate rebates when things change.
What’s more, with sophisticated rebate management software, you will also have access to robust deal modelling features, allowing you to quickly identify financial impacts and determine which rebates and pricing incentives offer the best return before agreeing them commercially.
This means that you can completely remove the guesswork regarding the impact a rebate could have on your profit margin. Indeed, rebate management software can be used to analyse patterns and track the behaviour of each of your agreements.
This leads to better decision-making, as you will be able to avoid agreeing to rebate deals that are loss making and do not aid increased profit margin.
Strengthen Relationships and Sell More
As a buyer, you never want to be in a position where you are missing out on claims that are rightfully yours and most sellers won’t want to put you in that position either.
When the rebate claim date is due, it is a best practice for your seller to make the payment in a timely fashion. Holding off until you as the buyer has to chase up the claim is no way to build a strong and trusting working partnership.
With rebate management software, not only can you provide your suppliers with accurate details of the precise claim amount and details, but you can also set up automated alerts and notifications so that important dates are never missed.
This, again, shortens processing times and administrative burdens, as it means you will always be on top of your rebate management processes, and your supplier only has to review and make the payment.
Such a strategy cements trust and goodwill between you and your suppliers and ensures that your rebate programme does precisely what it is designed to do – incentivise you to remain loyal and buy more.
When you are proactively calculating how much you are owed by your suppliers, you are providing them with accurate details of claims and reconciling on time, every time. And it gives you as a buyer, little reason for time intensive searches for better deals elsewhere.
Bring More Certainty to Your Profitability with e-bate – The Ultimate Rebate Management Software Solution
Only by removing your reliance on spreadsheets can you rid your business from the headaches, administrative burdens, and missed opportunities from your rebate programme. Deploying a solution that allows you to contract, transact, reconcile and analyse in real-time allows you to maximise your margins and increase your profit margin across multiple agreements with multiple B2B partners.
e-bate’s intuitive rebate management software is designed buyers and delivered as a SaaS platform to help B2B companies overcome the complexities in managing their rebate and pricing schemes.
The platform automates every element of the rebate process, eliminating spreadsheet reliance, reducing overheads, and helping companies increase revenues and profit while ensuring compliance through a full audit trail and comprehensive approval workflows. e-bate is your single source of all rebate information, providing you with the insights you need to make proactive decisions that drive profitability and business value.