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:
- model every aspect of a trading agreement so that all nuances of the agreement can be executed using the ERP system
- provide clear information at point of sale about true margins and the real cost of items
- provide completely transparent and auditable profit reporting at group level
An ERP vendor rebate module may be fixed in the types of rebates that can be modelled, requiring extensive configuration or modification to enable all deals to be replicated in the system. That work could be worth the investment, of course, but only if there is a limited number of new rebate mechanisms and if these new mechanisms will be used often.
The fundamental question is:
Should your ERP system control the types of agreement that you can negotiate? Or should procurement have flexibility to agree the most advantageous contracts for the business?
Clearly, it should be the latter.
If you are considering specifying requirements for modifications to your ERP software, you may come across these problems:
- Actually being able to specify what functionality is needed to cover all eventualities
- The cost of modifying standard ERP software
- The cost of maintaining the modification and enhancing it as new trading agreements are created
Many businesses have already explored the above and concluded that it is too complex and costly and therefore have developed a spreadsheet-based solution. But this approach is, by it’s nature, fraught with the potential for error and heavily reliant on whoever devised the spreadsheet(s).
Instead, a new breed of software designed specifically for managing complex trading agreements involving rebates is now available.
DealTrack Rebate Management Software was built from the ground up to be DEAL-CENTRIC.
The system integrates with ERP systems, and collates ERP data against rebate deals in DealTrack in order to calculate accurate, granular rebate earnings. DealTrack holds all the detailed information needed in order maintain compliance and facilitate business growth through optimised rebate management.
If your ERP system isn’t coping with the demands of your financial controller, your auditors and your procurement teams in terms of managing rebates you may want to consider a specialist Rebate Management System. Find out more about DealTrack — the ERP-agnostic rebate management system. Designed from the ground up to integrate with ANY ERP system.