Rebate Management: The Top 5 Best Practices You Need to Know
Rebates are among the most valuable incentives in a business’ strategic toolkit, but attempting to manage an ever-growing list of deals has driven many rebate teams to the brink of madness. The Sisyphean nightmare (you know the guy – he’s pushing a stone up a hill for all eternity) of digging through endless lines of data for single digit errors is enough to send any rebate manager searching for a better solution.
While every business’ situation – including the priorities and problems they encounter in rebate management – is unique, there are tried-and-true strategies for a more effective rebate management experience.
Today, we’ll be covering the top 5 best practices for perfecting your rebate management processes.
Collaborate and Communicate
When it comes to managing B2B rebates, collaboration is key. Working with your trading partners to develop deals and incentives that aid both businesses in their pursuit of distinct goals can make for strong, lasting strategic partnerships.
Collaboration and open communication drives loyalty and trust in trading relationships. Maintaining reliable partnerships can be especially beneficial in adverse market conditions, as your trading partners and customers are incentivized to stick with your business instead of searching for another as soon as the budget tightens.
Collaboration is most effective when you design your processes around it. Enable’s Collaborator solution supports a wide range of collaborative deal management processes, such as contract negotiation, deal sign-off, goal tracking, approval workflows, audit trails and more. With these collaborative functions built into your process from the start, you can save time and avoid costly delays in communication.
Click here to learn more about how Collaborator can improve your trading relationships.
Identify and Resolve Issues Early
Rebate managers should maintain an ever-watchful eye over their data. Always be on the lookout for errors, miscalculations or discrepancies. Even minor issues, if left unchecked and allowed to fester or recur, can quickly snowball into larger problems. If you wait until year end to attempt a solution, you may find that it’s too late for the damage to be undone.
It’s especially important to check your accruals early and often, as your accruals can serve as an early warning sign that something in your data or calculations may be amiss. Any discrepancies in your accruals should not be brushed off, but instead investigated thoroughly to determine the root cause of the confusion. Often, this can uncover hidden errors that you may not have noticed until year end.
When it comes to building trust between trading partners, transparency and open communication is key. We believe that everyone involved in the rebate agreement should operate from a single source of truth, with rebate data available to any party that needs it. That way, there’s no confusion or ambiguity in rebate progress or payment history. Making data instantly accessible to trading partners also prevents friction due to communication delays.
Maintaining transparency is also crucial to avoiding larger problems at year end, allowing your team and trading partners a greater chance to notice and resolve any errors or discrepancies before it’s too late. In the event of an audit, the true damage of locking this data up in a silo would be revealed.
Learn more about the importance of transparency in our blog, Siloed Data Hurts Only You: 5 Reasons to Pursue Transparency with Trading Partners.
Track Changes and Keep Records
Contracts and data can change frequently, leading to confusion and friction when a team member falls “out of the loop.” This is why it’s so important to keep a record of what changes are made, who made them, and when they were made. Ensuring that everyone stays on the same page is critical to keeping your rebate management process as smooth and efficient as possible.
In the event of an audit or calculation dispute, your contracts and data trail should be as clear as possible to avoid any ambiguity. Disputes often occur because suppliers and their customers have calculated differing amounts of rebates owed or due. You need to be able to prove that you really made the payments or earned the money that you claim. No one wants to end up in a dispute, but it does happen – especially when rebates are managed on inefficient or unorganized systems.
Automate Your Process
A crucial part of succeeding in rebate management is working within your capabilities and supplementing them when necessary. You shouldn’t bite off more than you can chew or work harder than you have to. For example, calculations and accruals are some of the most time-consuming stages of the rebate management process. While it is possible to handle this task by hand, allowing an automated system to perform it for you saves your team time and effort while avoiding the potential for human error. In a recent study, we found that manufacturers using rebate management software to automate month-end calculations typically spend 35% less time on month-end processes.
A great rebate team can take care of many problems, but a team is only as strong as the tools they have to work with. For example, an expert rebate team with only spreadsheets to manage their deals is like a professional football team forced to play with lead boots on. Implementing an automated system such as Enable into your process can be a game-changing advantage for many businesses, allowing you to the freedom to escape administrative reactivity and take a more strategic, proactive approach to your rebates.
Are you ready to revamp your rebate processes? Learn more about what rebate management can do for your business in our whitepaper, Driving Efficiency and Growth with Rebate Management.