Annually, more than £800 billion in rebates are transacted globally in the sectors of Pharmaceutical, Food and Drink, and Automotive, and more than £100bn in the UK alone.
Rebates are used in B2B to incentivise better relationships and should provide a WIN:WIN for both parties. Huge amounts of money is moving across the supply chain based on ever-complex rebate deals such as retro and tiered rebates, marketing deals and value incentives.
However, with many businesses using manual systems and basic tools to calculate, pay out and claim on rebate agreements, it becomes a very risky process and can lead to inaccuracies which are costing businesses millions of pounds every year. With just a 1% error rate in a manually maintained spreadsheet, that’s potentially £8 billion lost without trace, based on the headline figure above, in just 365 days.
Businesses that are not using specialist technology to manage the process in this area run the risk of leaking revenue at multiple touch points along the journey. These can be addressed by looking at two key areas:
- Process Efficiencies
Manual processes or unsuitable software leads to process inefficiencies, across all parties involved in the process, and this creates risk for the business. The contributing elements that lead to inaccuracy and other problems can be identified as:
- Keying errors
- Time spent manually processing
- Manual data handling
- Lack of audit
- Silos between the roles in the process
- Missed revenue opportunities
These are the basics – the things that cause strain on a department and the wider business, preventing time being spent on value adding activies.
- Data Analytics
Manually processing rebates also restricts access to live, quality data for the right people at the right time, for example:
- Lack of integration between systems means duplication of data
- Lack of timely data from 3rd parties means claim and payment delays affecting cashflow
- Data typically 8 weeks behind the curve, therefore data cannot be used to make meaningful decisions
- Lack of realtime analytics for decision making, means a loss of potential revenue
But so what? What’s the impact? Well, its cashflow, revenue and profit. Three essential measurements that business sucess depends on. Put simply, you only need one decimal point to be out on a spreadsheet to affect the stability of the entire business, yet companies continue to run the risk every day using ineffective rebate management processes.
So what’s the solution?
Digitisation. Implementing a specialist SaaS platform to manage rebates, puts the control back in your hands and instantly removes all the issues associated with the process and provides valuable data insights, minimising the risk of financial loss and improving transparency.
Automating the entire process from agreeing a joint business plan and contract terms through to paying and claiming rebates, it ensures you increase your bottom line and don’t leak revenue that you have worked so hard to achieve.
Rebate automation also releases people from the manual processing tasks, allow them to tackle other business value adding activities that will drive improvements and further growth.
The benefits that switching to a specialist tool to handle rebates digitally provides a 4:1 return on investment:
- Improves process efficiencies on average by 30%
- Generates cost savings >1% in errors
- Increases revenue and profit >2% based on visibility of data to make great decisions
- Improves supply chain collaboration, providing transparency and trust.
In short, it helps you to improve the bottom line!
Conclusion
So much time, consideration and effort are spent negotiating and making sure the deals you strike are the best they can be, but what’s the point if you can’t follow through with it all? If you’re signing a contract and filing it in your drawer, or, passing it to admin who process it incorrectly (or even worse, lose it altogether), then your efforts are wasted. If you can’t guarantee that your rebate process is water-tight, then you could be wasting your time, effort and money.
If you want to avoid contributing to the lost £8billion in rebate errors, maybe it’s time to re-think your current methods?
You can visit the e-bate website here, to learn more about their intelligent rebate management system or call for a FREE rebate efficiency assessment.