If you’ve ever been confused about terminology relating to rebate management, you’re not alone! The world of rebates is a complicated place at the best of times, especially when there can be multiple different names for the same thing.
DealTrack Blog — Contract Management
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.
Considering whether contract management software could be the solution for efficient, compliant, management of supplier agreements in your buying group?
You’re not alone. According to a recent survey by Oxford Economics, 49% of procurement executives said that their contract management is already automated and 68% of those surveyed predicted that in 2 years’ time contract management processes would be completely automated.
If you’re responsible for procurement in a buying group, wholesale distributor, multi-site or large business (such as building materials, HVAC, plumbing and electrical supplies businesses or buying groups of all types) then it’s likely you have a need for a contract management system that can accurately deal with supplier rebates.
We’re seeing more and more evidence of companies who rely on their suppliers to tell them what rebates they should claim!
This is surprising given that rebates can be the largest contributor to profit for buying groups and a significant percentage for companies in the building materials, retail and wholesale distribution sectors.
This may raise a few Financial Directors’ eyebrows, but given the complexity of rebate deals in some organisations and the lack of robust systems to track purchases against those contracts, it’s no wonder that some companies struggle to understand what supplier rebate claims they should be making.
The task set for procurement leaders in buying groups is to save costs. Whilst that is done at the contract stage, the process of making those cost savings often depends on having the right systems in place.
Cash flow is a big issue for most businesses in the building industry — from builders to building material suppliers — everyone in the supply chain is purchasing materials in advance of actually being paid by their customers. So anything that improves cash flow is usually welcomed.