Unveiled: A Comprehensive Rebate Management Software Guide
Many businesses (even large-scale enterprise companies) start out managing their customer rebates using a variety of simple, standalone tools such as financial spreadsheets. But from experience and hearing a host of horror stories about how some firms can take several months to calculate and finally pay out their customer rebates, we know that outdated rebate management processes can prevent companies from using rebates as one of their newest strategic sources of revenue. According to a study published by the National Bureau of Economic Research (NBER), many companies take several months to process rebate claims; “the average time taken from the submission of a rebate claim to the actual payout can range from 30 days to over 90 days.” Do not allow obsolete rebate management software or processes to hinder your organization’s evolution; join us in learning more about updating your customer rebate process in this article.
At Pricefx, we have been providing rebate management software since 2011 to enterprise-level businesses like yours as a part of a total pricing solution. What's more, since mid-2023, we have partnered with Enable, one of the world’s leading rebate management software providers. The Pricefx and Enable partnership was formed to enhance the customer experience and offer a more comprehensive rebates solution.
In short, it brings together both sides of the rebate process, including the buy-side that Enable is known for, and the sell-side solutions that Pricefx offers. For businesses that use rebate programs and have felt limited by what they can accomplish, they now can have access to both sides of the rebate equation. Consequently, with that level of expertise, we look forward to providing you with everything you’ve ever needed to know about rebate management software.
However, lets backtrack for a moment and to get started, let’s dive straight in and first analyze exactly what rebate management software is & does before we move on to discussing how it works and the considerable benefits possible for most types of business when using it. We will finish by looking at the diverse types of rebate management software and dive deep into the Enable advantage.
What is Rebate Management Software?
In essence, rebate management software helps businesses record rebate agreements, track purchases and sales against them, and manage accruals and rebate claims in an efficient automated manner.
Armed with a modern rebate management software system, you can forecast benefits, model proposals, determine net margins and influence trade activity to maximize your company’s returns.
All too often, companies dedicate entire teams to the use of outdated legacy systems like Excel spreadsheets to continue following already broken processes, thereby reducing output and strategic effectiveness of their rebate agreements which commercial teams have spent hours of time and energy negotiating.
For any modern business organization that is involved in offering and accruing rebates that wants to regularly evaluate their existing rebate management process and identify areas for improvement, in our experience, that journey usually starts and ends with the adoption of rebate management software.
What Rebate Management Software Does & Why
Many people (and maybe even some in your organization) may underestimate the strategic importance of rebate management in your company’s pricing process and the planning and successful execution of your pricing strategy.
Yes, it is true that rebates are one way to incentivize your customers to buy your products. For example, a rudimentary rebate could be something as simple as ‘purchase 5000 units of my product and you will receive back #% of the total purchase price back after they are sold’.
But rebates are so much more than that and you can use them as one method among several to seeing your pricing strategy through to its objective. Read on to discover why great rebate management comes with rewards (spoiler alert – it's all about fattening your organization’s bottom line).
How is Rebate Management Software Beneficial to Businesses?
If rebates are key to your business growth now or in the future, having top-notch rebate management software is crucial. Here are some benefits:
- Save time and enhance accuracy with a unified source for all rebate agreements, automated calculations, and forecasting.
- Boost sales with better visibility into rebate deals and daily performance tracking.
- Create superior rebate agreements by using historical data to model expected performance, and then get trading partners to approve deals within the software.
- Build strong relationships with trading partners by collaborating on realistic deals, monitoring performance, and quickly adjusting as needed.
Quality rebate management can assist by decreasing your price dilution upfront and incentivizing buying behavior after the fact to improve your price realization and plug your margin gaps.
In other words, efficient rebate management potentially makes you more money.
It does that primarily by avoiding discounting to close sales, as the rebates will be returned only after your customers have met the unique conditions of the deal that has been specifically created to meet your organization business objectives (for example: driving an inventory reduction initiative, increasing volume, margin, or profit) whatever you choose as your goal.
Driving or incentivizing certain defined customer behavior, quality rebate management software allows your business better incentive opportunities than promotions or discounts. By setting up a series of conditions that will entitle your customers to receive a benefit from you, it is a powerful and strategic selling tool.
Learn more here in this informative video how Bosch Thermotechnik increased their rebate efficiency by 50% with Pricefx:
The 6 Key Benefits of Rebate Management Software
1. Enhanced Efficiency and Accuracy Through Automation
By streamlining the rebate management process with task-specific automated software, the increased efficiencies can create added capacity for your teams to price at a more granular level and price in a more strategic fashion (see below in the next point for more information).
Streamlining rebates will allow your company to simplify the rebate management setup into an automated process rather than a manual one. Taking place throughout every step of the rebate management process, your team’s work will be transformed, not to mention the considerable improvements in the strategic outputs of your team.
2. Enhanced Visibility and Insights
As mentioned above, automating, and streamlining rebate management with dedicated software will build your company’s strategic pricing capacity. Your organization will develop the ability to use the software to provide powerful pricing insights and in turn, to understand the potential impact of your rebates on your firm’s profitability before the fact with simulation.
Once your Finance Team is tracking rebates using a quality rebate management software and that is technology is coordinated in combination with the pricing team’s pricing software incorporating price optimization and management, pricing analytics, sales compensation, and managing your agreements and promotions, the capacity to for your team to unearth more value points in your pricing strategy is compelling.
3. Pricing Lessons Unearthed with your Historical Data
Rebate management software can examine your company’s past selection of products, customers, and conditions. Based on that historical data in combination with the pricing criteria that you have set up, analyzing the benefits of the past can assist you in projecting if promising ideas or conditions are worthwhile for consideration in the future. For example, you can use your rebate management software tool in combination with your complete pricing software system to check your sales figures over the past year and if your price elasticity might have a positive impact on your desired business objectives after invoicing.
If your business objectives have been to increase volume by 10% in the past year while increasing the margin from 20% to 30%, but you only have made an increase of 3% rather than the 10% you are looking for, as a result you may need to reconsider your current rebates.
4. Using Price Simulations in Your Rebates Set-up
Equally, when using rebates management software in combination with a complementary total pricing software solution, the technology can assist you by simulating the future outcomes of your rebate programs and also forecast your margins into the future, while allowing for seasonality and other one-off factors.
Consequently, when it comes time to implement a set of new deals, apply the price simulation outcome that is most likely to help you close the sale consistent with your business objectives.
What’s more, you can track your progress as you work towards your business goals. For example, after the first full quarter of the fiscal year, with your rebate management software you can check how you are stacking up against your projected figures for the following 3 quarters.
If you are exceeding your projections, you could consider contacting your customer and offer them a further 1 or 2 per cent off in their rebate deal for a limited time to foster quality customer relationships.
5. Improved Compliance with Industry Regulations
Rebate management software can significantly aid enterprise-level organizations in improving compliance with industry regulations and standards. By automating the rebate process and providing detailed audit trails, the software ensures that all transactions are transparent and traceable. This helps meet regulatory requirements and reduces the risk of errors and fraud.
Furthermore, real-time monitoring and reporting capabilities enable organizations to quickly identify and rectify any discrepancies, ensuring ongoing adherence to compliance standards. As a result, companies can focus more on strategic objectives rather than being bogged down by compliance issues.
6. Modernized & Streamlined Claims & Accruals Procedures
For example, if you are offering your B2B customers rebates on purchasing more than 10 000 units of your products, eventually your customers will get in contact and say, ‘I’ve met my side of the deal and purchased my 10 000 units within the time period of the rebate agreement – where is my rebate payment?’ With rebate management software you will be ready.
With your rebate management software, you can track in real-time how many sales have been accrued over the period, program eligibility, validity, exceptions, etc. to process rebate claims in the most transparent, error-free, and time efficient manner possible.
Quality rebate management software fulfills your finance department’s needs with timely, accurate rebate claims and accruals in addition to the capability to forecast accruals on orders or invoices and calculate payouts.
The 4 Types of Rebate Management Software
1. Back-end Rebate Management Software
Back-end rebate management software is designed to handle the complexities associated with calculating and settling rebates after transactions have occurred. This type of software typically integrates with existing enterprise resource planning (ERP) systems and financial databases to automate the calculation of rebates based on predefined criteria such as sales volume, product categories, or customer segments. The primary function of back-end rebate management software is to ensure accuracy in rebate calculations, streamline the reconciliation process, and facilitate timely payments to customers or partners. By automating these processes, businesses can reduce administrative overhead, minimize errors, and improve cash flow management. Additionally, this software often includes reporting tools that provide insights into rebate performance and help organizations assess the effectiveness of their rebate strategies.
2. Customer Rebate Management Software
Customer rebate management software focuses on the customer-facing aspects of rebate programs. This type of software is designed to enhance the customer experience by providing a user-friendly interface for customers to track their rebates, submit claims, and receive notifications about their eligibility for various promotions.
It often includes features such as online portals where customers can view their transaction history related to rebates, check the status of pending claims, and access educational resources about how to maximize their benefits from rebate programs. By improving transparency and communication between businesses and customers regarding rebates, this software helps foster customer loyalty and satisfaction. Furthermore, it can also assist companies in gathering valuable feedback from customers about their experiences with rebate programs.
3. Sell-side Rebate Management Software
Sell-side rebate management software is tailored for sellers who need to manage rebates offered to distributors or retailers. This type of software allows sellers to create and administer several types of promotional deals that incentivize sales through rebates.
Key functionalities include setting up different rebate structures based on sales targets or promotional periods, tracking sales performance against these targets, and managing the distribution of funds once targets are met.
Sell-side rebate management solutions also provide analytics capabilities that enable sellers to evaluate the effectiveness of their promotional strategies over time. By leveraging data-driven insights from this software, sellers can optimize their pricing strategies and improve relationships with channel partners.
4. Buy-side Rebate Management Software
Buy-side rebate management software caters specifically to buyers who want to manage rebates they receive from suppliers or manufacturers. This type of software helps buyers track eligible purchases that qualify for rebates while ensuring compliance with terms set forth by suppliers.
Features may include automated tracking of purchase orders against rebate agreements, alerts for upcoming deadlines for claiming rebates, and reporting tools that summarize potential savings from various suppliers over time.
By utilizing buy-side rebate management solutions, organizations can maximize their savings opportunities through effective monitoring of supplier agreements and ensure they are receiving all entitled benefits without missing critical deadlines.
Choosing the Right Rebate Management Software
Key Considerations
When selecting rebate management software, it is crucial to consider the following key factors:
- Integration Capabilities: Ensure the software can seamlessly integrate with your existing systems, such as ERP and CRM platforms, to provide a unified and comprehensive solution.
- User-Friendliness: Look for a platform that offers an intuitive and easy-to-navigate interface, minimizing the learning curve for your team and enhancing overall productivity.
- Scalability: Choose software that can grow with your business, accommodating increasing volumes of data and more complex rebate programs without compromising performance.
The Power of Enable Rebate Management Software & How it Works Together with Pricefx
The partnership between Pricefx and Enable aims to improve customer experience by integrating both Enable’s buy-side and Pricefx’s sell-side rebate solutions. Businesses using rebate programs can now benefit from a more complete offering.
As part of this partnership, Pricefx users will still have access to the Pricefx platform while Enable users retain access to Enable's services. The additional benefit for organizations needing supplier rebate management is that they can now utilize Enable and integrate data from the Pricefx platform, thereby enhancing options and flexibility.
The Benefits of Enable’s Rebate Management Platform
Enable's rebate management platform provides numerous advantages:
1. Supplier Rebate Management: On the buy-side, companies can fine-tune their rebate programs, which leads to enhanced profitability and a greater competitive edge.
2. Claims Process: The platform also streamlines both downstream and upstream claims processes, ensuring they are more efficient and precise.
3. Collaboration: Lack of transparency is a primary cause for the failure of rebate programs, as it can diminish trust between buyers and sellers. Enable simplifies the rebate management process by offering a centralized location where sellers and buyers can access and manage rebates seamlessly. This eliminates any concerns about either party's ability to track or fulfil their rebate agreement obligations.
The Benefits of a Pricefx and Enable Partnership to Customers
To maximize value, use the Price and Enable solutions together to:
1. Manage pricing and rebates fully – This partnership gives you control of pricing, including rebates, paired with Enable’s supplier rebate management and claims processing.
2. Use data to streamline processes – We align customer, product, transaction, and rebate metadata for a unified source of truth.
3. Customer Rebate Management – Enhance your sell-side rebate programs to boost profitability and competitiveness.
Or alternatively, talk to one of our experts now to learn more.
Iain Lewis
Senior Solutions Strategist , Pricefx
Iain Lewis has worked in pricing as a practitioner for 27 years working at Automotive, industrial goods, business services and Distribution companies. Iain brings his unique perspective to each engagement to guide companies through complex buying decisions and has helped companies throughout Europe and South-East Asia continue to improve their pricing approach.