DealTrack Blog — Andrew Butt

Whilst working with a number of organisations across industry sectors such as building materials, buying groups and wholesale and distribution, we have seen a large variety of very complex supplier rebates and trading agreements.  These very often involve incredibly complicated performance-based calculations with seemingly endless permutations, and on top of that agreements are subject to periodic review and change.

In our dealings with businesses who have to manage complex rebate deals we have come across over 300 different types of deal… AND we’ve mapped all of those options into our DealTrack software.

Whilst it is important to have all those deal types to give ultimate flexibility, we thought it would be fun to share the top 7 most popular scenarios.

First though, if rebates are hard to manage — which is why we created DealTrack in the first place — why are they so popular?

Vendor rebates, volume pricing, retrospective discounts and the like are a way of giving individual customers the “right price” without driving the price downwards.

If you’re a builders merchant in 2018 you’ll know how essential it is to ensure every penny counts in terms of your bottom line. So, it’s even more crucial than ever that you don’t miss out on any of the, often significant, sums due to you through rebates.

Indeed, profitability for suppliers to the building industry is often very closely dependent on the amount of rebate they can negotiate and claim and many businesses across this sector tell us that the sheer volume of categories and the complexity of rebate deals means that administering rebate claims is a mission critical element of their business which can be the difference between a decent year and a great one.

100% of our customers have identified previously missed rebate claims after implementing our Dealtrack system and we have even seen cases of missed rebate claims amounting to 7 or even 8 figure sums.

Failing to claim 100% of rebate due can have a large negative impact on the bottom line for businesses in industries where rebate agreements are commonplace.  Finding out why that happens and how to stop missing vendor rebate claims is at the forefront of the minds of rebate accountants and financial leads the world over.

With increasing global competition, ever-more complex trading agreements are being created.

Effective management and control of complex trading agreements that include supplier rebates is notoriously difficult. Most standard accounting and purchasing software packages will not cope with the variety and complexity of pricing strategies and rebate agreements.

But a solution that is disjointed or based on spreadsheets introduces the possibility of missing data, human error and inaccurate reporting.

The decision to choose a contract management system is often driven by a need to model complex purchasing agreements that cannot be met using spreadsheets or existing ERP systems.

The first decision to make is about the type of contract management system that you need.

Do you operate in an environment where complex discounts and rebates are prevalent?  If the answer is “yes” then you may actually need a Rebate Management System.

Most ERP systems do not cope with complex vendor rebates very well.  Some do have bolt-on vendor rebate modules, but we have found that in a very complex trading environment the standard module is incapable of modelling all the product / price / branch / margin combinations that might be required.

When dealing with complex trading agreements involving rebates most ERP systems fail to:

As experts in rebate management, we have come across (and fixed) many problems with rebate management processes.  Here are the 7 most common things that businesses need to fix in order to improve profitability and growth.

1. Problems capturing rebate agreements in core business systems

Companies tend to look for a specialist solution to rebate management when they reach a point where their core business systems are proven to be inadequate.  We have seen several scenarios:

Due to the intricacies of most supplier trade agreements, rebate accounting is a notoriously complex operation. Many organisations still manage their rebates with spreadsheets or rely on their suppliers to make the calculations, despite this leaving them at high risk of errors and omissions that could lack audit compliance and lead to significant revenue loss.

To improve upon your current rebate management system, it’s necessary to take full control of the rebate process and the difficulties that arise from trade agreements.

Our mission is to provide “freedom to focus” and that applies as much to our own staff as to our customers.

For our customers, our software provides the means for them to focus on what really matters in their business.  In the case of DealTrack, we enable our customers to focus on supplier relationships and maximising deals, whilst the system takes care of tracking and accounting for rebates.

For our employees, our structure is such that our developers are completely and utterly focused on development.  This is what helps us to create innovative, high quality software.