When thinking about sales incentives, most people will cast their mind towards consumer retail scenarios – two-for-one offers, Black Friday discounts, free movie tickets with every purchase – rather than special B2B pricing arrangements. However, the fundamental purpose of sales incentives remains the same no matter the context – to influence people to take a desired action.
B2B buyers and decision-makers are consumers too, of course, and they want to know “What’s in it for me?” just as much as anyone else. And this is precisely what rebate programmes are designed to do – to give buyers the motivation they need and the incentive they’re looking for to make a purchase.
The problem is though, that unlike B2C incentives (one-time discounts, offers, coupons, etc.), B2B rebate programs are inherently more complex – for both buyers and suppliers – making robust rebate management processes critical for every link in the supply chain.
Both parties need a way to meticulously record the precise details of all rebate agreements. All purchases and sales then need to be tracked accurately against those agreements to ensure buyers aren’t missing out on claims and suppliers aren’t overcompensating the customer and eating into their profit margin.
All this requires real-time visibility into your data – and that data needs to be 100% accurate, 100% of the time.
Why, then, do so many companies still rely on spreadsheets for rebate management? According to the 2019 Benchmarking Accounting & Finance Functions report from Robert Half and the Financial Education & Research Foundation (FERF), 63% of companies still use Excel as their primary budgeting and planning tool. That said, spreadsheet reliance is in decline – and for good reason.
Relying on spreadsheets to calculate rebates leaves organisations open to expensive errors and high levels of risk – especially if the organisation is managing numerous complex trade agreements with a diverse range of equally complex rebate arrangements.
Because when key information is locked away in almost inscrutable and difficult-to-validate spreadsheets, mistakes are made, customers are not always paid the full value of their rebates and the buyer/supplier relationship starts to break down.
More than 5% of rebates calculated using spreadsheets are incorrect, leading to missed revenue opportunities, unnecessary overspend and key decisions being taken based on inaccurate data.
And there’s more trouble.
Copy and paste errors, accidental deletions, hidden rows and formulas – all can make rebate money vanish into thin air, causing massive problems for the organisations involved.
Content security is another major concern – though one that is still largely ignored by the C-suite. As spreadsheet security provider Spreadsheet Sentry puts it: “While spreadsheets do provide worksheet and workbook password-based protection, cell locking and hiding of formulas and password protection of macros and Add-ins, the level of protection provided is relatively low, provides a first line of defence only, and can all be broken fairly easily.”
No matter if you’re paying rebates to customers or claiming them from suppliers, you need to take full control of the rebate process. This can’t be done with cumbersome, low-security spreadsheets. A much more powerful, reliable, efficient and secure alternative is needed. And that alternative is purpose-built rebate management software.
Let’s explore some of the key ways in which a powerful rebate management system can help B2B organisations significantly improve and simplify their rebate processes.
Breaking Down the Communications Gap Between Purchasing and Finance Teams
While spreadsheets can be useful when organisations first start managing and tracking special pricing arrangements – including rebates – trouble arises when deal volume starts to grow. Suddenly, those simple and familiar spreadsheets become immensely complicated as they are overwhelmed with data – and the ability for multiple stakeholders to use them collaboratively goes out of the window.
Collaboration is imperative for successful rebate management – particularly between purchasing and finance teams. The precise details of each contract need to be efficiently communicated between all parties in order to ensure the right actions are taken by the right people, all savings achieved are accounted for and the accuracy of all rebate calculations. This is crucial for everything from reporting and forecasting to predicting cash flow and audit compliance.
Unfortunately, spreadsheets are not ideally suited to be shared between multiple people. Even online versions of spreadsheet software are prone to errors when more than one person is accessing and updating them. Duplicate data entries, information overlaps, misunderstandings over the details that make up each agreement, confusion over which version of the spreadsheet is the latest – it’s a recipe for disaster, and it all comes down to a lack of efficient communication pathways and suitable collaboration tools.
Purchasing teams work hard to negotiate different types of savings – including rebates – for their company. However, according to research by global consulting firm Protiviti – Bridging the Gap Between Finance and Procurement – there persists a disconnect between purchasing and finance and a lack of traceability between procurement savings and the company’s overall profit and loss accounts. This is in no doubt, due to the fact that fewer than half of Protiviti’s survey respondents said they actually track absolute savings, making it extremely difficult not only for procurement to demonstrate their existing value to the company, but to realise opportunities to drive additional value by improving spend analysis capabilities.
Rebate management software provides one single access point where purchasing teams can input information on any deals that are made and where finance teams can easily review and sign them off – closing the communications’ gap between purchasing and finance, and resulting in improved speed, efficiency and accuracy.
All data is tracked and calculated against agreements in real time, giving all stakeholders maximum visibility, complete predictability, and total reliability. With all communications stored centrally, agreements can be analysed easily and any tasks, decisions and approvals can be actioned in a timely fashion, driving efficiency and accountability throughout the entire rebate process.
Take Control of Your Contracts
Many buying organisations still rely on suppliers to perform rebate calculations, without ensuring that all the sums add up – and if those suppliers are working out the figures manually using spreadsheets, it’s easy to see how errors can be made. This results in tensions, customer dissatisfaction, and ultimately the breakdown of trust between buyer and supplier.
This is the opposite of what a rebate programme is supposed to achieve – to build stronger relationships and incentivise buyers to remain loyal and buy more.
The only solution is for both buyer and supplier to have joint access to accurate records, and a consistent way of recording, communicating, tracking and assessing rebates.
With rebate management software, all contract data is stored in a centralised online location which can be accessed by anyone with the right permissions at any time and from anywhere. This single source of data, which is calculated in real time, gives all companies – not just one side of the agreement – full visibility into their contracts. This not only provides all parities with an up-to-date view of their financial position, but allows them to accrue, process and approve payments and claims with ease, take control over complex calculations, reduce the risks of human error and return order to their rebate management processes.
Agree Systematic Workflows
Trade agreements between buyers and suppliers are notoriously intricate, making rebate accounting a time-consuming and painstakingly complex operation when relying on outdated legacy systems that follow inefficient manual processes. In such systems, all data must be maintained by hand, often requiring the dedication of whole teams to constantly recalculate rebates every time something changes, reducing productivity, (which eats into profit margin) while always remaining open to human error.
Changes, of course, need to be audited, with approvals granted at the appropriate level. Too often, however, there is no clear process or authorisation workflow in place that defines roles and responsibilities for each stage of the process – increasing the administrative burden, while compromising both control and business integrity.
Rebate management systems solve this problem with configurable workflow engines. These allow organisations to configure their own workflows in line with their business rules and internal corporate governance.
With systematic workflows, the segregation of duties is ensured, meaning key actions taken within the system are authorised at the right level, improving accountability, mitigating business risk, and ensuring compliance. Systemising processes in this way ensures that all information is clear, visible and easily accessible to both internal and external auditors.
Avoid Missed Opportunities – Automate Your Important Milestones
Creating a systematic workflow for managing agreements and rebates helps to streamline processes – but, in addition to this, rebate management systems also ensure organisations avoid missing important deadlines and milestones so that no savings opportunities are overlooked or forgotten.
This is achieved through automated reminders and notifications that alert key stakeholders whenever actions are required, ensuring that all tasks, decisions, and approvals that may have a business impact are actioned on a timely basis.
What’s more, the best rebate management platforms also have a built-in escalation process, which eliminates the risk of actions being missed due to holidays, sickness, or oversight, meaning organisations can be sure that all rebate agreements in the system are always being proactively managed.
Make Your Rebate Management Simple with e-bate – The Ultimate Rebate Management Solution
Spreadsheets are cumbersome, complex, and inherently vulnerable to human error and security risks. In order to manage rebates successfully and reap the financial rewards they can bring to your organisation, a powerful, highly-secure and feature-rich rebate management system is the only solution.
e-bate’s intuitive rebate management software allows you to manage and track complex rebates with ease and simplicity right across your organisation. Our powerful calculation engine means you can track and analyse all data against your agreements in real time, while our configurable workflow engine with automated alerts and notifications ensures your processes are streamlined, auditable and that you never miss an action which may impact your business.
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.