In a complex supply chain, real time rebate visibility is vital to success.
As part of the commercial team, you may be in charge of creating and managing attractive incentives through customer rebates - meanwhile the procurement team will be striking deals with vendors and accessing supplier rebate programmes.
When it comes to your pricing strategy, you need real-time visibility into the rebate agreements your purchasing and procurement teams have negotiated so you know exactly what margins you have to play with when it comes to creating financial incentives for customers.
This is the very nature of the supply chain.
Your organisation buys products, receives rebates on those products, then sells those products on to customers – who also receive a rebate as part of the deal.
Put it all together, and unless you’ve got a true handle on all rebate information with all trading partners both up and down the supply chain, analysing what margins you’re making on each sale is an almost impossible task.
Why You Need Rebate Visibility
The problem, of course, comes down to the difficulty in calculating the difference between the cost of products, the rebates received on those products and the rebates handed out to customers and buying groups.
This is only exacerbated further when relying on cumbersome, time-consuming and error-prone spreadsheets for rebate management.
Rebate agreements are inherently complex, with varying terms, conditions, tiers and targets attached to them.
As such, it is essential to ensure your commercial team truly understands the net price of products when devising their own incentives and providing quotes to customers.
To do so, it is vital you have a robust rebate management system in place to ensure the sums add up, your margins are protected and you’re not missing out on opportunities to capitalise on the great deals the purchasing team has secured.
A good system will provide comprehensive, real time rebate visibility into all your agreements, ensuring all relevant parties – finance, purchasing and sales – have the information they need to foster business growth.
It’s also important that this rebate visibility is extended externally between you and your trading partners as well.
Not only does a clear, transparent audit trail minimise disputes and the time and costs associated when compiling evidence for rebate claims – it also means that you can start collaborating strategically with suppliers for mutual benefit.
Improving Supply Chain Collaboration
The more sales you can make to customers, the more volume you will need to purchase from your suppliers. Improving collaboration with suppliers, therefore, will help you determine improvements that can have a positive financial impact for both organisations.
As such, when it comes to rebate programmes, only when all parties have real-time rebate visibility can the right decisions be made and the best deals struck for the benefit of everyone.
This will require joint business planning, defined by McKinsey in its July 2020 Taking Supplier Collaboration to the Next Level report as “a collaborative planning process in which the company and its supplier align on short- and long-term business objectives, agree on mutual targets and jointly develop plans to achieve set objectives.”
(Image source: mckinsey.com)
Joint business planning brings a formal approach to collaboration with suppliers and helps to engage stakeholders from different functions in the collaboration effort, McKinsey says.
Read more: The 7 Most Popular Rebate Examples
The report finds that companies with advanced supplier collaboration capabilities demonstrate higher growth, lower operating costs and greater profitability than their industry peers.
(Image source: mckinsey.com)
This is achieved, for example, through buyers and suppliers working together to develop new products, jointly purchasing raw materials, initiatives that foster collaboration in forecasting, planning and capacity management, or through improved cost and transaction transparency, which helps buyers and suppliers jointly create agreements and performance-based incentives that benefit both parties.
To do so, however, a culture founded in proactive communication and information-sharing must be fostered – and the right tools and mechanisms in place to provide the rebate visibility necessary to facilitate it.
(Image source: mckinsey.com)
Comprehensive rebate visibility is fundamental to achieving such mutual goals.
However, despite the importance of rebate information sharing, most organisations still rely on internally maintained spreadsheets to record agreements and calculate rebate claims – and on email to share the information between parties.
Instead, this rebate information needs to be centralised in a location that all parties can readily access. Rather than relying on spreadsheets, you need a system capable of recording every aspect of all deals made with every single trading partner in real time.
You also need a way to quickly share that rebate information with all relevant parties – internally, so decisions can be made quicker, as well as externally, so opportunities for collaboration on growth, volume and margins aren’t missed.
In addition, your system needs to be able to track all purchases made against rebate agreements with suppliers – not only so your organisation can accurately claim for all rebates owed, but so the net price of goods can be instantly calculated when modelling proposed deals with customers.
What’s more, the system should facilitate robust workflows for auditing, authorising and signing off rebates, so no mistakes or misunderstandings occur.
None of this can be accomplished when relying on slow games of email ping pong or spreadsheets for rebate processing.
Instead, purpose-built rebate management software will provide the rebate visibility you need to achieve your business goals.
Improve Rebate Visibility and Optimise Your Incentives with e-bate – The Ultimate Rebate Management Solution
Optimising your pricing strategy is no easy feat.
Supplier rebates need to be factored into calculations just as much as customer rebates – and all parties need access to real time data so the best deals can be struck with the right customers on the right product lines and mutually beneficial relationships can be fostered.
With good strategic alignment between you and your trading partners, greater market share and increased revenues can be enjoyed by all, maximising the performance of the whole supply chain.
With a robust rebate management system such as e-bate at the helm, this is precisely what you can achieve.
e-bate provides you and your trading partners with true, up-to-the-minute rebate visibility into all of your agreements.
With e-bate, all rebate information – including contracts and calculations – are centralised in the cloud, providing a single source of truth that all relevant parties can access at any time.
Our real-time calculation engine allows you to easily calculate all types of rebates and track and analyse your data against those agreements in real time.
This means that the performance of all your deals is completely transparent, important rebate information is never underutilised, there can be no disputes with suppliers and the best decisions can always be mutually taken.
In addition, our sophisticated deal modelling features allow you to conduct “what if” analyses on individual agreements, so you can model different rebate scenarios and understand the financial impact should conditions change on any rebate within the supply chain.
e-bate also comes with a configurable workflow engine, ensuring that all agreements – and any changes to those agreements that occur – are audited, processed and approved by appropriate parties promptly and efficiently.
This is ensured through automated notifications, which alert relevant individuals whenever their actions and approvals are required so opportunities are never missed and all agreements are being managed proactively.
The e-bate platform automates every element of the rebate process, eliminating spreadsheet reliance and giving you the ability to share rebate information with your trading partners and internal teams securely – helping you work together for the benefit of the whole supply chain.
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.