Rebate Processing: Guide, Examples & Tips

Financial Automation
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Rebate processing is filled with time-consuming tasks to set up contract terms and then follow through on what is purchased and owed. While rebates serve as a great way to boost customer satisfaction, cut costs, and improve sales, rebate software is needed to make sure it can be properly overseen from an accounting and finance standpoint. 

We’re going to look at what rebate accounting entails by first defining what its key components are, and then, reviewing the best finance automation solutions that can help, like SolveXia.

Coming Up

What is a Rebate?

What is Rebate Management?

What is Rebate Processing?

What is a Supplier Rebate?

What is a Customer Rebate?

Why are Rebates Offered?

What are Examples of Rebates?

How to Negotiate and Manage Rebates?

Why do Rebates Take Time to Claim?

What are the Benefits of Using a Rebate Management Platform?

How do Rebate Programs Work?

What are the Steps for Rebate Processing?

How to Create a Successful Rebate Program?

Final Thoughts

What is a Rebate?

A rebate is a refund offered to customers after a sale has been made. Since a rebate has the same outcome as a discount such that a product or service costs less money to the buyer, it’s easy to confuse the two. But, the main difference is that a discount lowers the price at the point of sale, whereas a rebate is a retrospective return of funds from a seller to a buyer.  

What is Rebate Management?

Rebate management encompasses everything that goes into making a rebate possible, including: recording supplier agreements, tracking purchases based on established agreements, and managing accruals and rebate claims. 

Rebate management tends to be a burden for finance teams because of the many moving parts, but with rebate software like SolveXia, calculating rebates becomes automatic. 

What is Rebate Processing?

Rebate processing are the tasks required to create, fulfill and adhere to rebate programs that have been established. There are several steps involved in rebate processing, including:

  • Creating the offer 
  • Customer making a purchase
  • Customer claiming a rebate 
  • Validation and verification that purchase has met the terms
  • Approval of rebate and processing of funds 
  • Issuing the payment 
  • Reporting and analytics 
  • Communicating with the customer 

What is a Supplier Rebate?

Supplier rebates are rebates that are designed for merchants or distributors from suppliers. If you’re a purchaser, you can take advantage of supplier rebates. Supplier rebates help buyers to save money and spend less on the goods they buy. And, if offered, it could incentivize buyers to switch suppliers to cut costs. 

What is a Customer Rebate?

A customer rebate is a rebate that is offered to customers from a merchant or manufacturer. In this type of contract, the seller must define the terms, track purchases to ensure they meet the requirements, and then follow through by sending the funds back to the eligible buyer. 

Why are Rebates Offered?

Rebates are used as a tactic to improve customer loyalty, increase purchase volume, drive sales, or incentivize trading from one partner over another. 

Rebates can also be tiered, which means that a greater rebate is offered for a higher purchase volume or amount of dollars spent. 

What are Examples of Rebates?

Let’s take a look at a few rebate examples to see how you can set up different types based on your business goals:

1. Fixed Volume-Based Rebate

Rebates are granted when a certain volume based turnover target has been met. Put simply, when a customer buys a certain number of goods, then they get the reward of the rebate. 

2. Fixed Value-Based Rebate

Like volume-based rebates, value-based rebates are also set up according to turnover targets. However, volume-based rebates are designed around quantity, whereas value-based rebates are dependent on the monetary value. 

3. Fixed Monetary Rebate

One of the simplest types of rebates is a fixed monetary rebate. This is set up by offering a rebate no matter the volume or value reached. It is a predefined rebate amount that is paid at the close of the agreement period. 

4. Growth Based Rebate

Growth based rebates are more of a loyalty and long-term play in which rebates are granted if the total amount of sales surpasses a set goal over the previous year, be it in volume or value. 

By setting up a growth based rebate, you are incentivizing customers to remain loyal over time and work towards reaching a goal. 

5. Fixed Percentage Rebate

Another type of fixed rebate is the fixed percentage rebate which offers a certain percentage of the gross sales back to the buyer. 

How to Negotiate and Manage Rebates?

Once a rebate is designed, it has to be properly managed to ensure that it achieves its intended goal. Additionally, managing rebates is what can make or break customer and supplier relationships. 

To do so, it’s best to keep all rebate data in a centralized and secure platform for immediate issue resolution, timely oversight, and transparency. Rebate management software, such as SolveXia, provides this capability and removes any dependence on disparate spreadsheets. 

Why do Rebates Take Time to Claim?

Rebates are great techniques for growth and loyalty, but they can be a headache to manage when performed manually. Manual rebate management also leads to slow payment processing because there’s dependency on key people and multiple spreadsheets to track. 

With little visibility and a lot of tedious work, it ends up taking time to claim rebates. Efficient rebate management can be achieved through the aid of finance automation software. 

What are the Benefits of Using a Rebate Management Platform?

A rebate management platform removes the hassle and stress of having to manually track rebates. Companies that leverage such solutions gain the benefits of:

1. Less Spending

Rebates require marketing to work. When you have a rebate management platform, you can track how the rebate campaign is working and know the ROI. 

2. Better Cash Flow

With accurate and on-time rebate payments, you can retain proper control of your company’s cash flow, which is necessary to make informed business decisions. 

3. Improved Customer Loyalty

Customers and partners that receive timely rebates are happy and satisfied with their purchases. Positive outcomes lend themselves to enhanced customer loyalty. 

4. Real-Time Data 

Rebate campaigns open the door to new data opportunities that can be used to derive insights. With a rebate management platform, you retain confidence in knowing that data is up-to-date and accurate. 

How do Rebate Programs Work?

Like any marketing campaign, rebate programs and rebate processing works by having a defined plan in place. It all begins by defining the rebate agreement and setting the terms. 

Then, it’s time to spread the word to the masses to get customers excited about the rebate and convert the excitement into purchases. The most important aspect of a rebate program is the proper financial control of the campaign. 

While it’s seemingly easy to set up and design a rebate program, it takes more work to account for it. This is why so many companies turn to rebate software to assist as it removes the complexity and streamlines the success of a rebate program. 

A rebate solution like SolveXia can be used to calculate rebates, set up contracts, and track transactions that are eligible for rebate payouts. By combining sales data and keeping up with new deal structures, SolveXia relieves the burden from your accounting staff, thereby freeing up their time to focus on high-level tasks. 

What are the Steps for Rebate Processing?

We alluded to the rebate processing steps above, but now it’s time to dive a little deeper into what each step requires. 

Rebate processing begins with the idea for the rebate and ends with the fulfillment and review of the rebate program. Here’s what it looks like in action:

1. Offer Creation

Choose what type of rebate structure (revisit rebate examples above) you wish to offer your customers or partners. 

2. Purchasing

Customer makes the purchase. 

3. Receiving and Scanning

Will the customer send in a rebate form via mail or digitally to request the rebate? When you get the request, it’s imperative to scan it into your system for processing to payout. 

4. Data Entry

It’s critical that everything is entirely accurate during data entry and scanning of the rebate request. Manual updates are error-prone, so it’s best to use a digitally connected software to handle such requests. 

5. Approval and Processing

Once the request has been entered into the system, it must be verified that it has met the rebate conditions. Rather than doing this by hand, you can utilize SolveXia’s automated system to ensure that purchases meet the rebate terms. 

6. Issue the Payment

If all is confirmed, the customer is entitled to receive the payment. 

7. Analysis and Review

It’s imperative to keep track of rebate campaigns and payouts. Make sure that customers are getting owed what they deserve on time, as well as review how the overall rebate campaign is working to meet intended goals. 

As you can see and likely have experienced, effective rebate processing doesn’t come easy, especially when being handled manually and across systems/spreadsheets. 

Rather than having to struggle with rebate management and processing, you can leverage a tool like SolveXia, which not only helps to set up rebate contracts  (from eligibility to the logic), but it also ensures that calculations are accurate and timely. This way, customers receive rebates as promised. 

How to Create a Successful Rebate Program?

Devising a successful rebate program calls for having clear goals and defining how you will measure your goals. Many companies that initiate rebate programs have their intentions in mind for doing so, which may be:

  • Attract new customers 
  • Drive higher sales growth
  • Capture market share 
  • Increase loyalty
  • Learn customer behavior 

Regardless of the goal that your business has in mind, having the right rebate software for rebate processing implemented is going to spell all the difference in your rebate program’s success. 

With a low-code or no-code solution, you don’t need to rely on a dedicated IT team or key person to carry out a rebate program. Instead, you can rely entirely on the software to gain control of standard or unique rebate programs. 

A rebate processing solution like SolveXia integrates with your existing solutions and offers strong data management, customer analysis, and collaboration functionalities. 

Along with rebate management, users can optimize business performance by easily automating other key finance functions, like: reconciliation, regulatory reporting, and expense analytics, etc. 

Final Thoughts

Rebates are a wonderful way to achieve important business goals like improving customer loyalty, attracting new customers, and boosting your bottom line. But, like any initiative, if it isn’t measured or executed through to completion, it won’t reap the intended results. 

That’s why rebate processing with the use of rebate software is critical to successfully execute rebate programs and reduce the burden on your finance and accounting team. 

Request a demo to see SolveXia’s rebate management solution in action. 


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