Rebate Processing Services: Experts Guide

Offering different types of rebates can be a great technique to boost customer loyalty, drive sales, and increase order value and volume. In order to be successful in this approach, it’s vital to have rebate processing services established and organized for accuracy and timeliness. 

We're going to look at how rebate management can be made easy with the use of rebate software like SolveXia. 

Coming Up

What is a Rebate?

What is Rebate Management?

What is Rebate Processing?

What are Supplier Rebates?

What are Customer Rebates?

What is the Purpose of a Rebate?

What are Examples of a Rebate?

How Does the Rebate Process Work?

How to Design a Rebate Offer?

What are the Types of Rebate Offers?

How do Rebates Get Processed?

What Are the Benefits of Using a Rebate Processing Platform?

Why Negotiate and Manage Rebates?

Why Deploy Rebates Strategically?

Why do Rebates Take Time to Claim?

What are Best Practices for Rebates?

The Bottom Line

What is a Rebate?

To incentivize a purchase, rebates are payments that are given back to a buyer after a purchase has been made. The difference between a rebate vs discount is that a rebate amount is provided retrospectively, whereas a discount takes place at the point of sale. However, both incentivise purchases. 

What is Rebate Management?

Rebate management is the process of tracking, organizing, and managing rebates effectively. It consists of recording supplier agreements, keeping track of the sales that adhere to said agreements, and paying out rebate claims in a timely manner. 

As you likely know, managing rebates can quickly become cumbersome. Many teams are bogged down by legacy systems and disconnected spreadsheets that leave much to be desired. 

The importance of properly managing rebates cannot be overstated, which is where rebate software offers massive relief. Rebate management software, such as SolveXia, delivers precision, time savings, better customer service, automation, and precision to your rebate management process. 

What is Rebate Processing?

Rebate processing is all the steps that are involved within a rebate program to fulfill the rebate offering to the buyers. 

Rebate processing consists of the following steps:

• Creating the offer 
• Customer (business, if it’s a supplier rebate) making a purchase 
• Customer claiming the rebate 
• Supplier validating the purchase is eligible for a rebate
• Approval and processing of the payment 
• Issuing the payment 
• Providing reports and analysis for the rebate program 
• Communicating with the customer that the rebate has been paid back 

Rebate processing moves through many steps and many hands. Without a clearly defined process and rebate management software, there is a high margin for error, delays, and headaches. 

What are Supplier Rebates?

Supplier rebates, also called vendor rebates, are granted by distributors or merchants. In these cases, rebates are paid out by a supplier to buyers. If you’re a purchaser, then you may be familiar with business-to-business (B2B) supplier rebates. 

What are Customer Rebates?

Manufacturers and merchants may offer customer rebates, in which case a rebate is paid to a customer, or buyer. For sellers, this is the type of rebate you’ll be responsible for processing. 

What is the Purpose of a Rebate?

Rebates are useful techniques to incentivize specific customer behaviors. Whether you’re looking to increase loyalty, boost purchase volume, or sell a certain mix of products together, rebates exist to motivate trading. 

While discounts are also a useful method to accomplish similar outcomes, many companies don’t wish to offer discounts endlessly because it can cause eroded margins within an industry. It can also dilute a company’s brand and reputation over time if applied too frequently. 

What are Examples of a Rebate?

There are different types of rebates that a company can offer, and the chosen structure will depend on the goal. One of the most common types of product rebates is a fixed monetary rebate. 

This means that a specified amount of money will be given back to the customer or purchases after fulfilling a purchase. It is applied to a specific product. This type of rebate is a great way to push sales for a good or service as it’s easy to communicate and everyone clearly knows what to expect. 

With clearly defined rebate processing services and a rebate management software designed to assist, the company’s accounting team no longer has to manually track transactions and payouts. The system handles the due diligence, and customers are happy as a result to receive their promised payout and in a timely way. 

How Does the Rebate Process Work?

Rebate processing is a clearly defined set of tasks that moves a rebate program through its ideation to its execution. The workflow tends to look like this:

1. Rebate Submission: A customer submits their proof of purchase for a product that qualifies for a rebate. The issuing company must validate the claim. 

2. Approval: Once the transaction has been validated, the rebate gets processed so that customers can receive the funds back digitally or via a check. 

3. Communication: It’s important that a customer receives timely communication regarding their rebate status to ensure they will remain satisfied throughout the journey. 

4. Fulfillment: Ultimately, the customer will receive the rebate back. 

With an automated rebate management system, the software will facilitate these steps, which will remove key person dependencies, bottlenecks, and manual errors from taking place. 

How to Design a Rebate Offer?

Knowing how to design a rebate offer that will maximize transactions is the starting point for creating a rebate program that will be effective. 

A few ways to design a rebate offer include:

• Know customer behavior: segment your audience and analyze the data to determine what type of rebates will be most motivational for different demographics. 

• Set a clear agreement: You can use a uniform template for all rebates that you will offer to clearly outline the program’s structure and minimize confusion on behalf of your internal processing team, as well as customers. 

• Vary the offers: You can use different types of rebates based on what you’re looking to accomplish, such as tiered rebates to increase purchase volume or introductory offers to promote the purchase of newly released items. 

• Use technology: Rebate management solutions, such as SolveXia, are a must-have for any company offering rebates because they facilitate pricing, contracts, negotiations, and the creation through the execution of incentives. Rebate management software improves analysis, helps to manage rebate accruals, and expedites your rebate processing services. 

What are the Types of Rebate Offers?

With a clear path to designing the best rebate programs for your business, it’s time to take a look at the different types of rebates you can employ. 

1. Volume Rebates

These rebates are designed to promote an increased volume of purchases, and as more goods or services are purchased, it unlocks higher tiers of rebates offered. 

2. Loyalty Incentives

These rebates are meant to promote the purchase from one company over another to boost brand loyalty and a long-term relationship. For example, this can be through a rewards program where rebates and discounts are offered as customers reach higher purchase thresholds. 

3. Mix Incentives

Mix incentives bundles products together, such as lower-volume but higher-margin products with popular items to provide package deals. 

4. Bulk Purchase Incentives

Bulk purchase incentives are rebates offered based on purchase volume. 

How do Rebates Get Processed?

Rebate processing services refer to a systematic approach of the rebate moving from point A to point B, in which the end result is the customer being paid back and being made aware of the payment. 

Rebate processing involves:

• Program Setup: Defining the terms and structure of the rebate program, along with clearly communicating its objectives. 

• Rebate Deal Assignment: At this stage, rebates are assigned to certain customers based on their purchase history and behavior. 

• Sales Tracking: Perhaps the most complicated step is keeping track of eligible transactions. Accruals are generated based on the sales figures and then set aside to be paid out. Accounting teams must be clearly aware of the sales/marketing teams promises to clients, as well as their progress. This is where a rebate management software can add real-time visibility and clarity into the process, along with automation of sales tracking. 

• Payment Processing: Once the transactions have met the eligibility requirement, it’s up to your company to fulfill the rebate to the customer. 

• Analysis: One of the most important steps happens after the payout has been made. It’s the analysis of whether or not the program is working as intended, which offers insight as to how to optimize the rebate the next time around. Quit the guessing game and use a finance automation software like SolveXia, which provides advanced analytics and real-time data with customizable dashboards. 

What Are the Benefits of Using a Rebate Processing Platform?

An effective rebate processing platform supports any company in their rebate program with accuracy, precision, and ease-of-use. The benefits include:

• Timely processing and fulfillment 
• Ability to set up multiple rebate structure simultaneously
• Increased customer satisfaction and loyalty 
• Time savings for your accounting team 
• Reduction in manual errors 
• Increased sales volume 
• Streamlined and clear process for customers 
• Prevention of key person dependencies and bottlenecks
• Removal of spreadsheet-driven and disparate data 

Take a look at how a rebate solution called SolveXia helped a global beverage bottler and distributor to achieve ROI in less than 3 months and calculate roughly 100 customer rebates monthly without the reliance on 57 spreadsheets. 

Why Negotiate and Manage Rebates?

The idea of a rebate initially typically starts with simplicity and clarity. But, as it progresses, it tends to become more complex, especially in its management and rebate processing services concerns. Negotiation and management are critical to ensure that partnerships remain in good standing and that centralized data is available to those who need it most. 

Why Deploy Rebates Strategically?

Along with boosting relationships between trading partners, at the very heart of rebates sits the ability to generate higher revenues. Rebate management and the strategic deployment of rebates help to align incentives, track key performance indicators (KPIs) and accomplish business goals. 

Why do Rebates Take Time to Claim?

The timely payouts of rebates are vital to satisfy customers and maintain good relationships with trading partners. However, rebates can often be delayed because their calculations get too complex, manual processes slow down the tracking, and when performed manually, there’s a dependence on a single person to run the show. 

Instead, rebate management software removes these hurdles and aids in ensuring streamlined rebate processing services. It’s a win-win-win for buyers, sellers, and accounting teams alike (not to mention sales teams)! 

What are Best Practices for Rebates?

To establish and execute rebates optimally, here are a few suggestions to maintain best practices:

• Clearly communicate rebate objectives and goals at the start 
• Share the rebate program with customers and internal team members 
• Leverage technology to automate wherever possible 
• Constantly analyze and review the program’s success, and adjust as needed 

The Bottom Line

Rebate processing services can be made simple and effective with a finance automation software in tow. From structuring contracts through tracking sales and paying out buyers in a timely manner, rebate finance solutions like SolveXia take the hassle out of rebate management. 

To see SolveXia’s ease-of-use and how it can help your finance team, request a demo today!