Firstly, if you’re reading this blog you will most likely to be familiar with what an ERP system (enterprise resource planning) is, but as a reminder it is a type of software that manages and integrates a company’s financials, supply chain, operations, reporting, manufacturing, and human resource activities into one system. Examples of ERP systems include NetSuite, Oracle, SAP, SAGE plus many more. Many ERP systems already have a way of recording contract information and a vendor rebate module or elements of purchasing software that allow for rudimentary recording of rebates owed. But we have found that there are disadvantages of ERP systems in a very complex trading environment where the standard module is incapable of modelling all the product / price / branch / margin combinations that might be required.
Although ERP systems have their benefits there can be limitations to the technology especially if your company is dealing with complex trading agreements involving rebates. Most ERP systems are at a disadvantage of:
Our research has shown that there are many disadvantages of an ERP system for managing rebates to the same degree of both accuracy and simplicity as our rebate management system. The reason behind that is that rebate deals can be quite complex and fields prompting for rebate amount / percentage and rebate threshold are inadequate to say the least.
Rebate agreements are created to drive growth, so suppliers will often change the agreement from year to year. They might add other incentives like marketing support, and they may focus on a product line or category to provide exceptional rebate agreements. We have seen over 300 different types of rebate agreement — all of which need to be recorded in order to make the right claim.
We’ve seen many examples where a contractual agreement is a document that sits outside the ERP system and relies on manual interpretation to get the details replicated in the ERP system. Many companies end up with some information automated in their ERP system but having to refer to paperwork or other electronic documents for other information. For some, that can be the start of their problems; the misinterpretation of contract documents and in ability to transcribe contract information into a system. For that reason, spreadsheets are often the preferred route to getting more accuracy. But spreadsheets rely on accurate information feeds and are open to manual error and problems with version control.
ERP system integration with Enable
The best of breed vs ERP debate has raged ever since ERP packages became available, but a ‘best of breed’ solution like Enable has been proven to be the best option for supporting vendor rebates, and complex rebate accounting… a bold claim, let’s look at some details.
Enable has proven significant benefits to the businesses that use the software. The system integrates with ERP systems, and collates ERP data against rebate deals in order to calculate accurate, granular rebate earnings. The rebate management system holds all the detailed information needed in order maintain compliance and facilitate business growth through optimised rebate management.
If your ERP system isn’t coping with the demands of your financial controller, your auditors and your procurement teams in terms of managing rebates you may want to consider a specialist rebate management system. Find out more about Enable — designed from the ground up to integrate with ANY ERP system.