Whilst many core business systems have some functionality to help monitor trading agreements that involve vendor rebates, most have neither the flexibility nor the extensive range of functionality that is needed to support the increasingly complex world of rebate management.
For many, that lack of functionality has resulted in missed rebates and poor accrual accounting.
But worse than that, if your business systems don’t support rebate management fully, then the whole purpose behind creating deals involving rebates – a means to influence business growth – is missed.
Added to that, financial policies are moving auditors to verify that companies who make trading agreements involving rebates have a robust process in place for determining appropriate accounting measures.
Rebates were “invented” as a way of driving sales growth without simply reducing the contract price. By agreeing retrospective financial incentives based on actual sales, both the supplier and the distributor are working together to drive market share and growth. Rebate agreements are becoming increasingly more creative and many are finding that “standard” business systems don’t facilitate this creativity.
This need for an auditable process and the desire to use very creative deal mechanisms as a vehicle for growth has resulted in a new paradigm of business system — the rebate management system.
A rebate management system collects information from core business system(s), enables deals to be modelled and monitored and feeds back timely accurate information for sales, purchasing and finance.
This document reviews:
- the trigger points for investing in a rebate management system
- the available alternatives
- a buyers’ checklist of 62 questions to ask when choosing rebate management software