Complete

guide to rebate
management
 02

Introduction
Rebates can have a significant impact on an organization’s bottom
— line meaning they should be recorded as revenue. 4% of potential
rebate revenue typically goes unclaimed. For many organizations this
can mean they’re missing out on hundreds of thousands of dollars
each year.

Contents For small to medium businesses, rebate can make up the majority
(or more than all) of their profit and for large businesses even a
Introduction 2 small improvement in procedure can lead to the discovery of
What is rebate management? 3 millions of dollars. Manufacturers offer rebates to promote and drive
What are the different types of supplier and customer rebate agreements? 3 sales of certain products, as well as to offer value and loyalty to
customers. For distributors, on the other hand, rebates are essential
What is the most common way of managing rebate agreements? 5
to their gross margin so it’s essential they make sure they achieve
What are the consequences of poor rebate management? 6 revenue goals that trigger maximum rebate.
What is the importance of collaboration in rebate management? 7
How is Enable different and how does our rebate management software work? 7 Therefore, it’s essential for any company who is involved in rebate to
regularly evaluate their existing rebate management process and
The deal economy 7
identify areas for improvement. This all starts with a dedicated
Who should use rebate management software? 8 rebate management system.
How will a rebate management system benefit your business? 10
Making a business case for rebate management software 11 We know that the world of rebates can sometimes seem
complicated and overwhelming, but as rebate management experts
Considerations when choosing a rebate management solution and vendor 12
we are here to help. This guide covers all the bases, helping rebate
Rebate management software: implementation and onboarding 13 professionals like you understand the ins — and — outs of rebate
Summary 13 management and how they apply to your business.
 03

scale of their rebate programs

and is often a complicated
What are the exchange for a spend of $x
on the new product. This type
process. An organization can different types of deal is also a great way to
easily have hundreds of of supplier and move people from placing the
same ‘regular’ order month in
suppliers, and tens of rebate
deals with each one. The customer rebate month out.
sheer volume, variety and agreements?
complexity of their rebate For the company who wants to
deals with suppliers makes stock the latest products anyway,
effective rebate management We cater for virtually every this deal is enticing. Until, that is,
a challenge. Much financial conceivable deal mechanism that it comes to reconciling money
risk is involved if calculations exists — product specific, spent on one range with
aren’t made consistently and location specific, defined time discounts achieved on another.
correctly on both sides of the periods, tiers, different units of Most standard purchasing
trading relationship. measure, and so on. There are systems can’t help with this, but
300+ deal types already unless accurate records are kept
Rebate agreements can be based represented on the system the deal can fail to be realized.
including:
What is rebate However, with a dedicated rebate on product — specific
management system it can incentives, certain performance Growth incentives
management? become much more with the metrics, and a broad range of Product launches Where the supplier is keen to
ability to forecast benefits, model other factors. To keep track of When introducing new products, increase the total volume not just
In simple terms, rebate proposals, determine net net them, suppliers and distributors it is common to link spend on the the individual order volume, a
management is the process of margins and influence trade need more than spreadsheets. new range to discounts on rebate based on incremental
recording rebate agreements, activity to maximize returns. To handle such complexity, a regular purchases. growth in orders is often used.
tracking purchases and sales robust rebate management
against those agreements, and Accurate rebate management system and streamlined For example, a supplier might This could take the form of a
managing accruals and rebate can be a real difficulty for any processes must be put in place offer an extra 1% discount across year on year target, with a
claims in a timely manner. business, irrespective of the to manage the timely and the entire product range in supplier rebate applying if
 04

the purchased volume exceeds the way of negotiating power.

the growth baseline. That in However, by offering a reduction
itself can cause problems for if they include other product
buying groups or multi-branch lines into the mix, they get a
operations who sometimes discount on their medicine
find it difficult to aggregate purchases and the supplier gets
the total spend by product larger orders across the whole
line for comparison with the product range.
previous year.
Central distribution
End of life promotions distributors to make purchases centre rebates
As old versions are being phased across a range of products, In order to cut logistics costs,
out, suppliers might plan to ship suppliers might provide a rebate some suppliers prefer to deliver
as much of the remaining stock based on total spend over a to a central distribution centre
as possible before the new period. Where the buyer usually (CDC). This leaves the buyer with
version appears. This is buys only a few lines, this the cost and task of distributing
sometimes achieved through incentive is used to try to switch to their branches / buyers from
extra volume discounts on the them away from other suppliers their CDCs. For those companies
old lines. The same thing for other product lines. who have existing transportation
happens with changes to routes between their CDC and
packaging design — buyers are Suppose you supply veterinary branches anyway, this can be an
encouraged through specific products and a buying group attractive proposition.
time-based discounts to shift buys only medicines from you,
quantities of the old design and tends to get pet toys and In these cases, whilst the
before the new one is released. accessories from elsewhere. The purchasing company isn’t adding
buying group may have a too much to their own costs by
Product mix incentives relatively fixed demand for your agreeing to ship from their CDC
To encourage buying groups and medicines, and therefore little in to branches, they can benefit
 05

from the discounts offered. In 1. A volume discount This can soon graduate to using
fact, we know of at least one case across all products ERP systems or even bespoke
where the total value of central 2. A rebate on a product range, systems created internally,
distribution centre rebates funds provided the volume purchased however these systems are
their own transportation division! exceed x in y months. not created by experts in the
3. A discount on one product rebate management space.
Marketing funds range dependent on purchases They often fail to handle even
Marketing funds are often made of another. If you buy x of these deals with the slightest of
available to distributors via a you will get a discount of y off complexities including the 300+
rebate that is linked to those. deal types we’ve encountered
purchases, but where the over the years.
accrued fund is to be used for
jointly — agreed marketing
What is the most Whilst many core business
activities. Maintaining marketing common way of systems have some functionality
funds usually goes beyond the
means of an accounting system,
managing rebate to help monitor trading
agreements that involve vendor
with additional trading partner agreements? rebates, most have neither the
collaboration capabilities such asdifficult to manage because they management is the solution to flexibility nor the extensive range
activity authorization, evidence often exist in high volume, need streamline this important Many businesses start out of functionality that is needed to
collation, and assets exchange rapid approval each time to business activity. managing their rebates in manual support the increasingly complex
being important aspects. secure the target opportunity, spreadsheets that tend to world of rebate management.
are often negotiated locally, and Conditional discounts become overloaded with data,
Special pricing agreement require close operational Any number of conditions prone to errors and have no It can be easy to neglect your
An agreement offered jointly cooperation between the could be applied to drive audit trail. Another way rebate agreements and operate
between a manufacturer and a manufacturer, the distributor purchase decisions in support businesses manage their rebates under the assumption that your
Photo created by jcomp - www.freepik.com

distributor to supply products to and the customer being of the suppliers’ commercial is by relying on data from trading current rebate management
a defined market segment at a supported. A joined-up partner and financial goals. Some partners, but this is a slippery process is handling the situation,
specially reduced price. SPAs are ecosystem for SPAs examples include: slope and can lead to disputes. however all too often companies
 06

are finding out that this If you can’t get accurate visibility someone’s desk or filed away
assumption is incorrect and has across your rebate agreements, in a drawer. The rebate
been for a while. you can’t accurately forecast the accounting team needs to know
impact on revenue, or budget for Missed or delayed what was agreed before they Disputes with trading partners
What are the the quarter/year ahead – which rebate payments make any payments. Rebates exist to encourage
consequences can lead to unpleasant surprises Companies can have whole
for the business and its investors.
teams dedicated to negotiating
mutually beneficial relationships
between suppliers and
of poor rebate and managing rebate, however a distributors. If there’s
management? lack of collaboration between the disagreement over the terms
teams or a shortage of time can Compliance issues of the deal, or if the distributor
lead to missed or delayed Historically, businesses have is seen not to be delivering on
Lack of functionality has resulted
Data errors payments. It is likely that rebate been known to misrepresent the terms of the deal, it can
in missed rebates and poor
Manually entered rebate data income is going to slip through rebates due to their estimated lead to a loss of trust and may
accrual accounting. But worse
is prone to errors and, as your the cracks and be missed unless nature to make the accounts even pave the way for the end
than that, if your business doesn’t
business grows and the number you have a handle on your rebate look better. IFRS 15 is moving of the relationship.
support rebate accounting fully
of deals you manage increases, accounting processes. auditors to verify that
then the whole purpose behind
you’ll find that spreadsheets companies who make trading
creating deals involving rebates to
slow down and calculations agreements involving rebates
increase profit is missed, and you
get more complex. Rebate have a robust process in place
are wasting precious time and
accountants have to rush to for determining appropriate Slow deal approvals
resources for no benefit. Below
complete tasks on schedule Disappearing accruals and profit reporting. If you’re going back and forth
are some of the consequences of
which can lead to human trading agreements Otherwise, the consequences with your trading partner trying
poor rebate management:
errors and oversights with When there’s a backlog of of misreporting are severe. to get a deal approved over email
financial data. Finding and trading agreements waiting to For example, in 2017 Tesco, it’s not only inefficient but also
fixing the problem takes even be signed off manually, it’s not the largest supermarket in the time consuming. There is also a
more time. This is less likely uncommon for emails or paper UK, was hit with £214m in chance of the deal not getting
Inaccurate budgeting to happen with all your data documents to be temporarily penalties after misreporting approved on time if, say, the
and forecasting in one system. misplaced or completely lost on rebate earnings. person goes away and doesn’t
 07

leave a handover with a team Distributors and suppliers revenue and better relationships smooth flow of information that within their business and their
member or, worse yet, there can record trading agreements in between supply chain partners. is always in sync, your rebate trading partners’ businesses.
often be older versions of the different ‘internal’ systems and team across all divisions have
agreement floating around. track progress independently. We find that when both access to the same, consistent We provide collaboration tools
parties collaborate on their information. so trading partners can review
What is the Misinterpretation and trading agreements, they both the deals being proposed to
importance of discrepancies creep in, and
disputes arise. And instead of
have the same understanding
of the deal, they reduce the
Enable is the system of record
for trading programs and deals.
them online, comment on them,
and sign them off. There’s also an
collaboration in mutual benefits, trading risk of contract disputes, and We encourage buyers and sellers audit trail to show who did what
rebate agreements deliver mutual
headaches for both suppliers
they’re more likely to maintain
a strong relationship.
to set up all of their deals in
Enable. We cater for virtually
and when.

management? and distributors. every conceivable deal Enable tends to pull in ‘master
  How is Enable mechanism that exists – product data’ (data on products and
All trading agreements involve Rebate programs are a great specific, location specific, defined locations) and transaction data
multiple parties looking to way to reward collaboration different and how time periods, tiers, different units (purchases, and/or sales) from a
achieve mutual aims – usually throughout the supply chain, does our rebate of measure, and so on. With over company’s ERP software. Once
profitable growth. And by
working together, everyone
which results in improved
business performance for all
management 300+ deal types already
represented on the system, you
deals are agreed, Enable
calculates all the deal earnings,
can achieve their goals. Most participants. Benefits include software work? can get started fast. allows cash to be collected and/
companies keenly understand greater market share, increased or paid against deals, and sends
this symbiotic relationship, The purpose of rebate Enable offers analysis, modeling journal entries back to the
but too often companies work management software is to have and forecasting tools to help accounting system.
in isolation from each other. one complete system that buyers and sellers check the
The challenge is to get all supports and integrates all of impact of their deals, negotiate
companies aligned on the goals these functions, in order to and agree deals with their trading The deal economy
Photo created by jcomp - www.freepik.com

so everybody knows what streamline processes and partners (typically suppliers or

success looks like, and how information across an entire customers) and get those deals Rebates, market development
to win.  organization. By creating a signed off by the relevant people funds, special pricing
 08

The B2B deal agreements. In the US alone,

these b2b trading agreements
rebates faster, and generally
excel against the competition?
rebates as a mechanism of
maintaining their stated price,
merchant who found their
existing systems let them down
economy in add up to hundreds of billions Their secret is likely to be rebate but incentivizing trading partners was MKM Building Supplies.
figures: of dollars every year. We call
this the deal economy. Whether
management software. to purchase in higher volumes in They needed a method of
order to get a retrospective keeping on top of the supplier
North America you have deals with suppliers, It’s not just about the size or discount. In addition, builders’ rebates they receive, so they
distributors, resellers, buying complexity of your deals right merchants, who are selling their decided to implement Enable.
$6.6 groups — or all of the above —
we’re here to help you manage
now, it’s where you want/expect
your organization to be in the
products out, deal in customer
rebates. They are paying out Wholesalers
trillion of goods
sold through them more effectively, and seize future that determines your rebate to a particular customer According to research by
driributors every opportunity the deal need for rebate management of theirs as a result of that the Aberdeen Group 50% of
economy represents. software. A lot of smaller customer earning the rebate. retailers utilize rebate programs
organizations don’t think rebate as part of their customer loyalty
Who should management software is a
reasonable option based on their
But the building industry is seeing and promotions mix.  The
greater price pressure than ever retailers buy the products in
use rebate size, but if your company plans to before, particularly as customers bulk from the wholesalers who
management grow and offer more complex can compare prices online and work as intermediaries between
type deals, rebate management use the results to negotiate the retailer and the
software? software is a necessity. discounts. Therefore, they are manufacturer. The retailer then
exploring new strategies to drive adds their margin and sells it to
Rebates are prevalent in many Specific examples of industries / profitable growth including better consumers who want their
50 industries because they can have types of businesses that stand to supplier relationships which can product to be affordable and
vertical markets a significant impact on an benefit by implementing rebate generate significant amounts of delivered quickly.
$500 organization’s bottom-line. Have management software are: funding in the form of trading
billion paid in you noticed other companies in agreements like rebates or special However, in more recent years,
retrospective your industry that seem to have Building industry pricing agreements. wholesale has experienced a
rebates
noticeably streamlined Manufacturers of building revolution of its own due to
Source: Benfield Consulting, 2018 processes, are able to claim materials supplies regularly use An example of a builders’ online marketplaces like Amazon
 09

where customers can find customers to claim rebates; your customers, or a distributor
everything they need in one place. however, without accurate involved in receiving rebate from
This doesn’t mean physical retail records, and a consistent way of your suppliers, accurate rebate
is far becoming obsolete, but it is recording, communicating, management must be a priority.
in a profound need for digital tracking and assessing rebates, it’s This is because the successful
transformation especially when not surprising that errors and and efficient handling of rebate
managing its promotions, pricing disputes were common. fosters better relationships
and rebates. To remain with trading partners and can
competitive wholesalers should Today, there’s an alternative way be the difference between
establish a great working of seeing customer rebates, and profit and loss for some
relationship with retailers and several manufacturers are companies. For many distributors,
keep close track of the deals embracing the customer who the sheer volume, variety and
they’ve struck by using a rebate wants a structured, planned complexity of their rebate deals
management system where they trading arrangement with them makes effective management a
have greater visibility and can because they understand that real challenge.
collaborate with each other.  customer rebates are an
opportunity for mutual benefit. Enable was born out of the DCS
Manufacturers Rebates are a way to serve their Group (UK), one of Europe’s
Manufacturers, who are the customers better and to engage largest distributors of health and
vendors selling their products out, in a joint go-to-market strategy. beauty products, and continues to
deal in customer rebate. They are They see rebate management as support many leading distributors
paying out rebate to a particular an essential part of their growth across the UK, Canada and US to
customer of theirs as a result of strategy and treat customers as maximize the performance of
that customer earning the rebate. true partners. their B2B deals.
In the past, those giving away
rebates were sometimes accused Distributors Buying groups
(unfairly) of dishonesty and of Whether you are a distributor Having lots of members and
trying to make it difficult for their involved in paying rebates out to suppliers, buying groups deal with
 10

many complex rebate agreements A dedicated rebate management model proposals and understand engage with them about the consistency needed to
which can be difficult to process system should contain an their potential benefit before adjusting the agreement as streamline your processes and
manually. And so, for those extensive reporting suite to engaging in discussions with your your forecasts are predicting improve deliverability. Rebate
involved in the supply chain to get report and analyse the outcomes trading partners. Having true you could far exceed your management software helps you
the maximum return on their of the automated calculations. visibility of your net margins current targets. automate tasks so you and your
investments, the buying group Rather than thinking of a rebate throughout the rebate process employees can shift focus to
needs to have a rebate management system as a will empower your business. Furthermore, having the visibility value-added activities and spend
management system at their calculator, you should see it as a to offer promotional deals for less time on administrative tasks.
disposal. This will make the trading niche business intelligence tool. Increase order volumes new products, support marketing
agreements between all parties When the complexity behind of certain products at specific Increased clarity
easier to understand and With the correct information entering, tracking and points throughout the year and A rebate management
calculate, plus fewer claims should displayed in one place you can calculating incentive rebate reward the performance of your system may well and truly be
be challenged. At Enable we have easily identify which included agreements is removed with a best or most loyal trading the missing piece of your rebate
seen the proof of this having products and trading partners dedicated rebate management partners will all increase volumes management puzzle. With it in
worked with buying groups since deliver the highest margins and, system, you and your trading year on year and help to forge place, you will be able to clearly
2002, including Unitas Wholesale, conversely, which ones do not. partners can focus on utilising better trading partner see the full rebate picture for
UAG, Lumbermen’s Merchandising This will inform any future the different types of incentive relationships. Through this, your your business and solve many
Corporation (LMC) and Affiliated negotiations and allow your rebate agreements to benefit company can push its brand out of the basic problems faced
Distributors (AD). commercial team to spend less each other. into the marketplace and by those still in the dark ages
time worrying about keying deals become more competitive. of rebate.
How will a rebate into a system and more time
negotiating the most beneficial
A system should be able to
provide you with clarity on any Operational efficiency Automatic calculations
management deals for your business. opportunities you may be close If you’re running things manually, Calculations can be run
system benefit to realising so that you can
With a truly collaborative rebate understand whether you should
you might find it hard to enforce
common processes across your
automatically, more accurately
(down to multiple decimal places
your business? management system, negotiation increase orders with certain organization. Consistency is the using real time data) and more
and approval can all take place in trading partners to increase key to efficiency, and rebate reliably (without the risk of
Improve your margins the same system allowing you to return on investment or perhaps management software creates human error). This again will
 11

reduce the number of disputes ineffective decision-making. One of the most critical steps
and difficult conversations that A rebate management software involved in implementing any
are required between trading will help you combat these new software system is building a
partners allowing them both to challenges by collecting a robust business case. It’s not easy to
focus on analyzing agreements amount of data that can be used convince key stakeholders or
and negotiating better deals. to build meaningful reports. With a board of directors to write a
those reports, you can achieve check, especially when this
Centralized deal repository the level of deal transparency involves changes to business
If there is a lot of paper moving you need in order to make sound processes that they think have
around your company, but very business decisions. Because worked just fine for many years
little real communication rebate management software without failure.
occurring, a rebate management puts timely and accurate
software solution can help. A information at your stakeholders’ Any technology investments
single source of truth enables you fingertips, numbers can be must deliver value to the
to improve communication analyzed in real time. This allows business. To define this value and
between departments, and management to make time corresponding costs, the
instead of storing important sensitive decisions based on business case must clearly define
documents and spreadsheets on the specific information they make modifications. current data at any given time of your plan. It should pull together
personal computers, you can need quickly, all from the same the year. all the assumptions and the
house all your important data in a
integrated system, your entire Data driven decisions rationale for why you want to
centralized deal repository that
eliminates redundancies.
business runs more smoothly, and
you waste less time hunting down
Manual systems are error prone.
Without rebate management
Making a implement this new software,
and really clarify everything
information and verifying its software in place, you may find business case including costs, benefits and
This increases data accuracy accuracy. With all this data at your that your business information is for rebate what could go wrong. It is
because there is no need for fingertips you can analyze and not reliable. You or other important that the business case
duplicate entry of any piece of correct any discrepancies as they members of the team may also management owner is comfortable with
information. When every member arise, instead of waiting weeks or be relying too heavily on software everything as they could be held
of your rebate team can access months to react to issues and guesswork which can lead to accountable.
 12

Without a solid business case experts who are good at building Enable. If you want to get the
What do our customers say? for moving to new rebate software do it for you. You’ll be best from your rebate
management software, it's satisfied with the results! management software, then it is
S C O T T F E R G U S O N President, United Aqua Group
unlikely that the funding required essential you choose the right
If you are working with rebates,
to select, implement and support
a better system will be approved.
Considerations partner to allow you to reach
your business goals.
and you want to go to work and
not tear your hair out, you should when choosing
work with Enable. The following key points should
be included:
a rebate It’s important that you are as
prepared as possible and know
If you’re working with rebates and
you want to work with an
management fully what your organization
incredible group of people, who’s
just going to make the whole
1 Describe the business
challenge
solution and needs from a vendor. Don’t be
afraid of asking too many
process infinitely easier, then you
want to work with Enable.
2 Assess the potential benefits vendor questions because a new solution
3 Assess the potential costs is a big investment. It’s vital that
4 Assess risks and issues that Once you’ve got your business your business be prepared to
M A R K G I L H A M Finance Director, Grafton Group plc might arise during the case approved it’s time to choose dedicate a lot of time and
implementation a solution and a vendor. This is a resources to this project and that
Working with Enable is a
refreshing experience. Our
5 Recommend the preferred critical decision that needs it is not treated as an
queries and requests are always solution careful consideration. They hold afterthought if you truly want to
met with a ‘can do’ approach, 6 Describe the the key to ensuring you obtain an reap all the possible benefits of
which has allowed us to tailor implementation approach immediate ROI and continued rebate management.
the software and implement it 7 Measure potential and success long into the future.
in a way that works best for us.
actual ROI Some possible questions to ask
Even when a request is not There are many software vendors a software vendor include:
currently feasible, the Enable Some companies think they can that claim to be ‘the right fit’ for 1 Have you worked with
team works with us to find build a system internally but your business, but there isn’t any similar companies to ours?
alternative solutions and
workarounds. that’s not always the best way. who can handle the complexities 2 What size companies do you
Let the rebate management of rebate management like typically work with?
 13

3 How long will it take to Rebate range of benefits expected from

your new rebate management
To summarize organizations using a rebate
management system have in
implement this software?
4 What do you offer in terms management software, planning is essential. As you can see, whilst there is a common and you could be taking
of support and training? software: From writing up your list of lot to consider, a rebate advantage of these business
5 What costs are involved? requirements to selecting your management system can be truly outcomes too. With a modern
6 How is your solution Implementation internal project team; all need to transformational. We hope with and flexible rebate management
different from the and onboarding be carefully considered to ensure this whitepaper we have in some system that’s the perfect fit for
competition? a successful implementation. way demystified the topic of your business.
7 How quick is your response Implementing and onboarding rebate management — what it is
time to problems or
questions?
a rebate management system At Enable we have a dedicated
Customer Success team who use
and everything that goes with it.
Leading
is a strategic undertaking, and
8 Does it integrate with other because business processes their expert knowledge of the Whether you decide to move to a companies
systems?
9 What benefits can the
can vary between businesses, product and our customers to get
you up and running as efficiently
rebate management solution now worldwide are
or in a few years’ time, be careful
software bring to my
implementations will vary
depending on your own as possible. Ideally within 12 not to hold on to legacy systems driving profitable
company? unique requirements. weeks! With our structured and outdated technology; you growth with
10 What are the defining onboarding process below, you don’t want to find your
features and functionality Deployment of any new system will be able to confidently use organization in a position of being Enable.
of the software? will inevitably bring changes to Enable to start sharing trading unable to keep up with Are you ready
both data and processes across
your business. Your choice of
programs with your collaborators.
We’ll guide you through activation
competitors who made more
timely investments into the digital
to join them?
rebate management software and beyond, helping you to evolve transformation of their deals and
Contact Enable today and vendor will be critical to and take advantage of all the rebate management.
at [email protected] the success or failure of your features Enable has to offer.
or visit enable.com new system. Boosting financial performance,
to schedule a demo. Head to our Help Center increasing operational efficiency,
It’s also important to add that if to find out more about mitigating business risk, are all
you are to truly extract the full onboarding. business outcomes which