Accounting for your rebates can look different to businesses depending on their size, internal resource and how complex the deals are. Auditing this important process means testing and reviewing your rebate accounting to ensure it’s working as efficiently as possible. Businesses need to prioritize this so they can best position themselves for effective rebate management now and in the future. When auditing your rebate accounting processes, you should prioritize the steps below.
1. Review the accessibility of your deals
Managing deals in Excel spreadsheets is great for businesses taking their first step into rebate accounting, but once the amount and complexity of the deals grows rebate management software is the only solution to help large businesses to get a better handle on their deals and improve their rebate accounting processes.
In both scenarios, if the deals aren’t securely accessible to individuals or teams that need them, effective rebate management is lost. Your deals need to be stored centrally, securely and be easy to access, from wherever your team is, especially in a world where remote working is fast becoming the norm. Deals are of no use to anyone if they are stored in a filing cabinet at the office or in an Excel spreadsheet stored on someone’s computer.
When accessibility of your deals is improved, your business gives back time and control to teams that are usually overwhelmed. Instead of spending hours trying to locate and find critical information, self-service can become the norm. That way, the team or person can spend time focusing on their day-to-day and overall rebate accounting tasks.
2. Check you are not exposing the business to risk
Compliance is the most obvious and immediate challenge obstructing your rebate accounting processes because there are financial regulators that you have to adhere to and it’s such a significant process that can either lead to financial success or loss. Taking the time to identify where any risks occur in your rebate accounting process can help you mitigate similar issues or bottlenecks in the future.
Some examples of risk and non-compliance in the rebate accounting process include:
- Sensitive data not being managed securely
- Unable to accrue the correct amount
- Incorrect calculation of amounts due
- No audit trail to track deals
- Invoices not being paid on time
- Misrepresented numbers in reports
- Relying on suppliers when claiming rebates
All of the above can damage your business’s reputation, your relationship with suppliers and your business’s profitability, even leading to regulatory fines. Auditing your rebate accounting processes and acting on them is a necessity for mitigating and minimizing risks in the future.
3. Examine whether you can report accurately and efficiently
Throughout the rebate accounting process, accurate reporting is critical. Not only do finance need to review spend and rebate performance but across the organization, teams such as sales and procurement will need access to information contained in these reports so they can review purchases and drive future negotiations with suppliers.
Sales, finance, and procurement need reports that give them advance notice of potential problems in the rebate accounting process before they become disasters. A lot of reporting is done manually using excel spreadsheets. With this approach, the data is not up to date and can’t actively be turned into actionable reports; vulnerabilities tend to remain undetected until there’s a problem.
Having an automated rebate management system for preparing and sending recurring and one-off reports will ensure that your business runs smoothly, and business decisions can be made sooner in the rebate accounting process.
4. Consider whether rebate claims have been missed in the past
Missed rebate claims are also a solid indicator that your rebate management processes have gone awry as they can become a huge financial drain on your business. With a lot of people, a lot of processes and a lot of data involved to ensure that rebate claims are made, it is obvious why things can go wrong. A reliance on suppliers to calculate rebate due, a complete disconnect between departments and deals not performing as well as expected are just some examples of how rebate claims can be missed.
Therefore, it is critical to audit this stage of your rebate accounting process and see how it can be improved with better technology. You’ll uncover rebate revenue, centralize your deal information and reduce any disputes with rebate management software.
5. Assess whether the rebate accounting team is aligned with the wider business
Rebate accounting should be collaborative by nature, requiring multiple departments and individuals to work together to get the most value from their trading agreements. Ways of working need to be standardized, consistent and understood by all – whether internal rebate accounting processes are manual or automated.
For example, those that use spreadsheets to manage the rebate accounting process, find that they are dependent on a key person who has the knowledge on how to use it locked in their head. In businesses that use dedicated rebate management software, it may be the case that not everyone has bought into the solution – using workarounds and deferring to their preferred way of working instead.
If your deals are being passed through each touchpoint with no alignment between people, processes and technology, your rebate accounting processes will always be fragmented. To keep your rebate management processes aligned and increase collaboration, there needs to be shared training, understanding and knowledge business wide.
How to improve your rebate accounting processes with rebate management software
Once you have completed your audit, your business needs to consider how it can optimize its rebate management processes to boost their financial performance. Auditing your rebate management processes will only be effective if you take the time to make the improvements, which is where technology can be beneficial. Rebate management software can streamline your rebate accounting processes so everyone is on the same page, errors are reduced and missed claims are a thing of the past. Get in touch to schedule a demo.