No one said being a distributor or manufacturer was going to be easy. But you did it anyway. No one said that the pressures of producing the best quality goods for the best possible price would be trivial. But you did it anyway. No one said that getting the right goods to the right place at the right time, every time, would be a breeze. But you did it anyway. And you keep on doing it.
But it doesn’t have to be so hard.
In this blog post, we delve into the challenges of managing rebates in the supply chain and offer a bit of hope. There is a better way to deal with at least some of the pain points involved in our day-to-day jobs. Rebate management solutions can help.
What pain points do distributors/manufacturers face when it comes to rebates
Unless you’ve lived under a rock for the last few years, anyone in the industry knows that the increasing pace of change in the competitive environment means that leaders are at risk and a new way of working is evolving. This provides opportunities for new challengers, but also to break down siloes between trading partners to create new partnerships. According to a report by the Global Center for Digital Business Transformation, four in 10 current market leaders are expected to be displaced by digital disruption within the next five years.
When it comes to dealing with rebates, what are the common pain points shared by both manufacturers and distributors? There are many, but we’ll select just a few.
Overwhelm and inaccuracy
The first challenge is dealing with overwhelm and inaccuracy that often results from having too little time to manage too many customers, suppliers or rebates. For too long, rebates have been managed using spreadsheets and whatever tools were available at the time. Usually, this meant handling deals with Excel or a well-intentioned ERP not designed to handle the inherent complexity. It worked – up to a point. But double and triple checking rebates isn’t just time-consuming, it’s error-prone, and it’s frustrating.
Manual processes don’t just cause errors and annoyance, they also reduce the time available to analyze data. As a result, it’s impossible to discover, never mind leverage the insights rebate data can reveal to improve the business.
Rebates can often be a hidden source of income – particularly when rebates are left unclaimed – or a hidden source of opportunity to improve supplier relationships, build trust, and work together for mutual benefit. But when you have a key person dependency, and there is only one person who holds information in an Excel spreadsheet or, worse, their heads, you know it’s time to look for a better solution.
Errors, bad data, and a lack of trust
People do their best, they really do. But it’s simply not possible to be 100% accurate 100% of the time. One of our customers recently said that their accuracy is around 95%. They’re pretty proud of that. Given the complexity and sheer workload associated with most rebate management, they may have had good reason to be proud of their accuracy rate – at least before they started using Enable to help them. But the difference now they don’t have to worry about errors, missing rebate monies, and not being able to trust the data they’re working with is enormous.
Without rebate management software, the risk of getting inaccurate data is significant. Despite our best intentions it’s not always possible to spot a mistake in a spreadsheet. Unfortunately, the risk of bad – or simply incomplete – data doesn’t just affect the bottom line. It corrodes relationships. It hampers visibility. And it prevents businesses from using rebates for their intended purpose: As a way to make deals that provide income and serve customers.
Inaccurate accruals and compliance risk
Being unable to predict rebates with any accuracy creates challenges for finance teams, company profits, and, ultimately, even your shareholders. But while an unpredictable year-end report may sometimes happen, this shouldn’t be due to ineffective rebate management! And it doesn’t have to be, these days.
Rebate uncertainty also increases compliance risks. When processes aren’t documented accurately, and can’t be seen to be followed, auditors get antsy. And uncomfortable auditors create enormous pressure on the finance team. Again, using a good rebate management tool can help avoid these risks.
Other supply chain challenges
When you add the complexity involved in B2B supply chains – including warehouse management challenges, communication breakdowns, the risk of losing money due to pricing errors, frustrations with workflows, and the frustration of not being able to work from anywhere – the challenges are exacerbated.
How to overcome these pain points
Essentially, there is one simple way of solving pain points related to rebate management. Invest in a solution to help you do rebates better. Here are a few ways Enable can help you address these issues.
There are very few processes, these days, that haven’t been automated in some ways. Rebates are one of them. It’s time to remove the pain of manual effort with rebate management software. The immediate benefit is improved rebate accuracy but, over the longer term, it also becomes far easier to build up a picture of how rebates are working for you and helping you serve your customers. Without automation and a bigger picture view of information that was previously isolated on spreadsheets, this simply wouldn’t be possible.
Data you can trust
When rebate data is flowing through a rebate management solution, you get data you can trust. This doesn’t just reduce conflict between trading partners, it forms a solid foundation for good conversation. And better conversations lead to better, more profitable relationships and improved collaboration.
Predictable income and expenditure
Regardless of which side of the rebate economy you’re on, whether you’re a supplier, a distributor, a retailer, or a buying group, having access to information that allows you to predict your income and expenditure is invaluable. It provides confidence and a solid foundation for future planning.
Transparent audit trail
Fortunately, good rebate management solutions allow you to track rebates: from the initial agreement and sign off, to the payment. It makes the whole process visible to relevant and authorized users and it keeps the tax man happy.
How Enable can help you solve these pain points
The good news is that it’s possible to streamline rebate management processes, improve collaboration, and ensure total deal visibility. That’s why Enable exists. We saw that the world needed a better way to manage complex B2B deals. So we built one.
When people use rebate management software like Enable, there’s less uncertainty and less manual effort which means team members can be more productive and proactive. A good system also allows for improved reporting and forecasting. As a result, auditors are likely to be more comfortable that processes and procedures are compliant with GAAP. And anyone involved in legislation can ensure processes are compliant with relevant government or industry laws. More importantly, though, great rebate management software helps every partner in the deal economy understand their deals and improve deal performance which, more often than not, leads to increased profitability.
You can read our blog post on this subject to find out more about the benefits of rebate management software but, ultimately, it all comes down to partnerships. Great rebates are better when all parties focus on
– developing common business plans and shared goal setting,
– investing in the relationship for mutual success,
– creating a partnership based on shared goals and a solid foundation, and
– investing in shared marketing material and product distribution.
You might have heard this before because we wrote it in a blog post on why customer rebates are the best thing (for customer success) since sliced bread, but it bears repeating.
Essentially, good customer rebate management is about giving customers choice, having flexible agreements, and finding a tailored solution for them, but it is only possible if the information exchange between both manufacturers and customers is accurate, up-to-date, and flows both ways. Rebate deals that allow full visibility, and flexibility, and encourage collaboration help reward your customers’ success, and create better sales for you!
A final word on rebate management software
More software isn’t always the answer to company challenges. As Jay Epperson says in a Datix blog post, “If you aren’t laser-focused on your company’s goals and pain points, you could waste time and money on bloated applications and add-ons that contribute nothing of value to your business.”
But when it comes to rebate management, there’s a reason our customers repeatedly say that buying Enable was a no-brainer. Enable is the opposite of a bloated solution and customers can tangibly calculate the returns. In fact, they typically achieve 300% ROI in three years. Don’t just take our word for it, though. Read our customer stories for yourself, and discover how the world’s leading brands are driving profitable growth with Enable.