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.
Some ERP systems have functionality for recording rebate agreements, but often lack the granular level of functionality needed to carry out detailed matching of actual purchases and sales against those supplier agreements.
Most types of rebates can only be claimed when the associated items have been sold and in businesses with thousands of item codes stocked in multiple locations, tracking actual sales against rebate agreements can be a challenge.
Some companies therefore prefer to put additional processes in place – using home-grown software or spreadsheets to capture the details.
Most companies who deal with rebate claims have several people involved in the process:
- members of the commercial team who negotiate contracts that include vendor rebates
- the buyers who place orders under those contracts
- people responsible for sales and pricing
- rebate accountants who work out what to claim
- other members of the financial team
- and of course, the suppliers themselves!
That’s a lot of people, a lot of processes and a lot of data involved to ensure that rebates are claimed.
So, it seems obvious to say that it’s very easy for things to fall through the cracks and rebate claims will be missed.
However, we have examined this is detail and described the 10 most common ones (and how to fix them) in our eBook “10 reasons rebate accountants fail to claim 100% of rebates due”.
In short, they are:
Issue 1. Reliance on suppliers to calculate rebate due
Issue 2. Rebate isn’t calculated in detail
Issue3. New product introductions by the supplier are missed
Issue 4. Disparity between the supplier agreement and the information in the finance system
Issue 5. Deals do not perform as expected
Issue 6. Deals are not clear, or not completely agreed
Issue 7. Commercial team has no visibility of supplier products in your system
Issue 8. Commercial team lacks historical information for negotiations
Issue 9. Missed rebate thresholds
Issue 10. Lack of visibility of available rebate at the point of sale
To find out more detail behind each of the above issues and how to solve each of them, download our eBook.
PS: Interestingly, even where companies feel they have none of those issues, we have STILL managed to find at least 4% of annual rebate income that has not been claimed!