Many distributors find themselves at the mercy of suppliers when it comes to claiming on their rebates, often having to wait for payment, which can significantly impact cash flow. This dependency on suppliers' terms can result in missed opportunities, as evidenced by one of our customers who told us they only claimed a fraction of what they were entitled to over two years, leaving millions unclaimed due to an inefficient process.  

Compounding the issue, many distributors lack a structured system to monitor their rebate claims or depend on manual methods such as spreadsheets, resulting in limited visibility and potential inaccuracies. According to findings in our State of Volume Rebates 2024 Report, concerns persist among distributors regarding the precision of claiming all owed rebates: a staggering 52% doubt they receive the full extent of the rebates they've earned.

We believe implementing a streamlined rebate claims process is key to ensuring stable, long-term collection and improving visibility with suppliers. Read this article to discover how to regain control of your claims process and maximize your rebate income.

The Challenge of Unclaimed Rebate Funds

Manual and time-consuming processes plague many distributors, particularly when it comes to handling rebate claims. The sheer volume of claims to process often overwhelms teams, leading to inefficiencies and delays.  

Distributors often express frustration, acknowledging that they failed to stay on top of the complex process of claiming what they are rightfully due. This initial oversight can quickly snowball into a situation where they end up not claiming at all. Over time, the unclaimed rebates pile up, and the task of catching up seems too overwhelming. They feel stuck, thinking they've missed the chance to claim what's rightfully theirs.

The lack of guidance and support from their suppliers makes things worse. Without clear instructions or a system in place, customers struggle to keep track of what they're owed and how to claim it. They run into problems like missing paperwork or long approval waits, which makes them less likely to try again.

In the end, not chasing after what they're owed means distributors miss out on money they could have had, impacting their long-term financial health.

Here are just a sample of our customers who have shared their challenges:

“Our indirect rebate agreements are complicated, which often makes tracking them through our invoicing system and having good visibility of the amount we have claimed difficult. Due to the lack of visibility, last year we missed around £2 million of indirect rebate from one of our biggest suppliers. We only managed to find this at year end because of our good audit checks. If I wasn’t here that would have been lost income.”

Food Services Distributor

"We heavily rely on suppliers to inform us about our owed amounts. While we do validate their rebate claims, they typically hold the upper hand in negotiations."

Building Distributor

“Claims will be the key connection between Enable’s calculations and our ERP system. This will remove our very manual process of raising invoices for over 100 agreements every month and instead allow Claims to post amounts for each of our members directly to our ERP system.”

Catering Buying Group

Bargaining Power and Passive Revenue Collection

The relationship between distributors and suppliers is often characterized by a significant power imbalance, with suppliers typically holding the upper hand. This power dynamic frequently allows suppliers to dictate the rebate claims process, leaving distributors in a vulnerable position where they must comply with the terms set by the supplier, even if it is not in their best interests.

Suppliers often wield substantial bargaining power due to their size or market dominance, which allows them to dictate the terms and conditions of rebate agreements. This includes setting the criteria for claiming rebates, the timeline for payment, and the required documentation, among other factors.

Consequently, distributors often find themselves in a passive role regarding revenue collection. They become subject to the timelines and procedures set by their suppliers, lacking autonomy in managing their rebate earnings. This passivity often leads to delays in payment and missed opportunities to optimize rebate earnings, as distributors are unable to take proactive measures to assert control over their revenue collection process.

Disputes with suppliers over inaccurate figures further exacerbate the situation, resulting in additional delays in cash flow. These disputes compound the financial strain already experienced by distributors, further highlighting the challenges they face in navigating the power dynamics inherent in their relationships with suppliers.

The Importance of a Streamlined Rebate Claims Process

As a distributor navigating a competitive supply chain, your long-term financial stability hinges on the revenue generated through rebate earnings.  Therefore, establishing a streamlined rebate claims process is imperative for accurately and efficiently managing all your rebate claims.

By adopting a centralized and automated claims management system, you can ensure precision and expedite approvals. Eliminating the potential for human error inherent in manual calculations instills confidence in distributors that their rebate claims are consistently accurate. This not only accelerates the receipt of rebate payments but also fosters stronger relationships with suppliers by showcasing transparency and efficiency.

By capitalizing on rebate opportunities, refining rebate claims processes, and nurturing collaborative partnerships with suppliers, you can position your business for sustained success and expansion. Don't delay any further. Now is the time to assess and enhance your existing claims management system, positioning it as a strategic investment for future resilience and growth.

Schedule a demo to view and manage all your rebate claims from a single platform.