Top 5 Reasons the Construction Industry Needs Supplier Rebate Management
Rebates act as a key revenue source for many suppliers in the construction and building materials sector, but recent changes in the supply chain have made the long-standing challenge of managing construction rebates even more difficult – and all the more pressing.
The construction sector faces growing challenges and complexities in the supply chain. With fluctuating prices and evolving distribution channels, managing costs while maintaining the profitability of your products has become increasingly difficult. In such an unpredictable market, efficiently managing incentive programs through automation or other means is critical to the success and profitability of businesses in the construction industry.
Why Construction Supplier Rebate Management is Needed
The construction industry faces unique challenges in the modern supply chain, and the same goes for construction rebate programs. Managing construction rebates in a volatile and competitive market is not always easy, but with the right processes and tools, construction and building materials suppliers can find tremendous benefits in these powerful incentives.
- Increase transparency and visibility
Internal visibility and transparency between trading partners are must-have qualities in the era of digital collaboration. Most trading partners now prefer access to real-time performance data over periodic updates. This leads many businesses on the customer side of construction rebates (that is, those making purchases to earn the rebate) to seek out rebate solutions with a single source of truth that keeps all parties on the same page and aids in avoiding disputes.
For Richards Building Supply, a wholesale building materials distributor, a lack of real-time visibility into their rebate data was a serious concern for the business – one that prompted them to leave their “excruciatingly painful array of spreadsheets” behind in search of a construction supplier rebate management solution. After implementing Enable they were able to maximize the calculation and collection of their construction rebate programs.
- Track and improve construction rebate performance
Keeping a close eye on the performance of your incentive programs is one of the most important ways you can maintain and improve their efficiency. However, when construction rebates are managed on spreadsheets, getting a clear view of performance – including any potential problem areas or opportunities for improvement – can be a challenge in itself.
To overcome the limitations of spreadsheets, many suppliers choose to adopt a dedicated construction supplier rebate management solution. Designed with the varying needs of rebate managers in mind, these programs can provide you clear views of your deals’ performance at multiple levels of detail, from in-depth granular views to at-a-glance overviews.
- Reduce human error
Human errors in spreadsheets not only cost the company money in missing revenue, but a significant amount of time as well. When it comes to something as crucial as construction rebates, a mistake that takes only a second to make can take days to resolve. When data runs askew, team members (often more than one) must spend hours upon hours identifying the error, correcting it, reclaiming any revenue that may have been lost and resolving any subsequent errors that may have been made based on incorrect data.
Maintaining a clear audit trail is another important part of the error reduction process. Not only are these trails of documentation essential to conflict resolution, but they’re often required to maintain financial compliance. New automated platforms can generate these audit trails and reports for you, dropping another laborious task from the full plates of your busy team.
- Find and reclaim missed income
Whether due to human error, low visibility or confusing spreadsheets, many businesses managing construction rebates have missed opportunities to claim. Often times, the hardest part of reclaiming this income is tracking down where these missed opportunities were in the first place. As many of our customers learned the hard way, a massive spreadsheet packed full of data can make for a pretty intimidating haystack to go digging for needles in.
Grafton Group PLC, an international building materials distributor, claimed that Enable’s construction supplier rebate management software helped them to discover income that they otherwise would not have claimed. The platform’s reporting features allowed their team to focus in on a particular section of their trading agreements and easily compare them to the income they had already claimed; in doing so, they quickly identified income that had been missed.
- Free up internal resources
Spreadsheet-based rebate management can turn into a huge drain on your internal resources. It doesn’t just take up your team’s valuable time – it also draws on resources that are harder to quantify, but every bit as vital. Having to keep track of your construction rebates manually requires a formidable level of effort, attention, vigilance and flexibility that can become even harder to maintain as the amount and complexity of your deals grows.
When you automate your rebate management, your team can finally stop “spreadsheet-jockeying” (a term coined by one of our customers) and save significant amounts of time and effort on these complex processes. In fact, we’ve discovered that companies using dedicated construction supplier rebate management to manage supplier rebates typically spend 40% less time on month-end activities. Richards Building Supply found that adopting a rebate management platform aided them in “freeing up internal resources to work on other value-added projects.”
Click here to read the full case study for Richards Building Supply.
Managing Construction Rebate Programs
Taking on supplier rebates is not simply a matter of signing agreements and letting them run. With so much profit at stake, construction rebate programs typically require a more hands-on approach. It’s important to keep a close eye on your supplier rebates to ensure that you aren’t missing any claims owed, your calculations are correct, your data is logged accurately and that your incentive programs are actually helping your business to reach your goals.
In the days of spreadsheet-based rebate management, these tasks were laborious and wasteful, taking up valuable time that your team could better spend on other tasks. However, in the new era of automation-based rebate management, these crucial responsibilities have been streamlined and cut down to just a few clicks of a button. As the supply chain changes and incentive programs play an even larger role in trading performance, construction supplier rebate management platforms such as Enable can transform your approach to rebate management and help you stay ahead of the curve.
To learn more about how rebate management is transforming the construction industry supply chain, check out our blog 5 Ways a Rebate Management System Can Reduce Supply Issues in the Construction Industry.