Many companies offer some type of rebate for their products and services. This can be a great way to increase sales, but it can also be complicated to manage. If rebates are not managed correctly, you could actually lose revenue and shrinking your margins.
In this article, you’ll learn about rebate management using configure, price, quote (CPQ) technology and processes, how to add rebate information to your quotes and invoices, and the best ways to handle rebates when they are received.
What is Rebate Management?
Rebate management is the process of tracking, approving, and processing rebates. This can be a complex task because there are often multiple stakeholders involved, including salespeople, customers, accounting, and finance.
The goal of rebate management is to ensure that all rebates are accurately tracked and accounted for so that the customer can receive the full amount of the rebate. This can be a challenge because rebates are often offered by different vendors at different times.
To complicate matters further, some rebates are offered based on volume (i.e., the more you buy, the higher the rebate), while others are offered as a percentage of the purchase price.
Why is Rebate Management Crucial for Your Business?
Rebate management is critical to both sales and pricing teams because it can have a direct impact on the bottom line and pricing strategy. If rebates are not managed properly, companies can lose out on significant revenue. Rebate management is also crucial for sales and pricing teams:
- Sales teams: Rebates can also help you increase sales. Rebates can be a great way to incentivize customers to buy more products or services. When used correctly, rebates can increase sales without you having to discount your prices. This is because the customer is effectively getting a discount after they've already made the purchase.
- Pricing teams: Rebates can help improve margins by ensuring that all relevant discounts are applied accurately. This means that you won't have to worry about giving away too much in discounts and eating into your profits.
Finally, poor rebate management can lead to customer dissatisfaction. For example, if a customer does not receive the full amount of the rebate they were expecting, they may be less likely to do business with the company in the future.
How Does Rebate Management Work in the Sales Process?
Rebate management in the sales process typically starts with the salesperson adding rebate information to the quote or invoice. This ensures that all stakeholders have visibility into the rebates that are available.
In CPQ, you can add rebate information to the product or service being configured. This way, when the quote or invoice is generated, the rebate information will be automatically populated.
This saves time and ensures accuracy by eliminating the need for salespeople to manually calculate rebates. In addition, it allows you to track which products or services are being discounted and by how much.
Once the quote or invoice has been approved, the accounting and finance teams will work together to track and manage the rebate payments. This includes ensuring that all rebates are paid on time and in full.
The final step in the process is to reconcile any discrepancies between the amount of the rebate that was expected and the amount that was actually received. This can be a challenge, but it's important to ensure that all rebates are accounted for accurately.
Why is CPQ Technology an Important Tool in Rebate Management?
Technology is an important tool in rebate management because it can automate many of the tasks involved in tracking, approving, and processing rebates.
Specifically, we are talking about CPQ.
CPQ is a software application that helps salespeople create accurate quotes for their customers.
CPQ software can be used to manage different types of discounts, including rebates. When configuring a product or service in CPQ, you can specify the rebate amount and terms. This information will then be automatically applied to the quote or invoice.
This can save a lot of time and hassle for salespeople, who would otherwise have to manually calculate rebates for each quote. In addition, it can help ensure that all quotes are accurate and include all relevant discounts.
Further, a CPQ CRM integration can be configured to automatically add rebate information to quotes and invoices. This ensures that all stakeholders have the most up-to-date information about rebates, and it makes it easier to track and manage rebates.
In addition, technology can help you manage volume-based rebates by automatically calculating the amount of the rebate based on the number of products purchased. This can save a lot of time and effort when compared to manually calculating rebate amounts.
What are Some Tips for Managing Rebates?
Lastly, there are a few things to keep in mind when managing rebates:
- Be sure to track all rebates in a central location so that they can be easily accessed by all stakeholders.
- Make sure that all rebate information is accurate and up to date. This includes the amount of the rebate, the expiration date, and any restrictions on how the rebate can be used.
- Work with accounting and finance to ensure that all rebates are paid on time and in full.
- Reconcile any discrepancies between the expected and actual amount of the rebate.
By following these tips, you can help ensure that your company's rebate program is successful and completely accurate.
Intuitive technology plays a vital role in streamlining rebate management CPQ processes. With PROS, you can easily create and manage rebates with precision and speed across a variety of different selling scenarios.
PROS Partners with Enable to Offer Complete End-to-End Pricing and Rebate Functionality
PROS has recently partnered with Enable to deliver rebates and promotions at the time of a sales quote. PROS Rebate Management powered by Enable combines industry-leading CPQ capabilities with a full suite rebate management platform to service the needs of all functions within an organization. The solution removes unnecessary complexity and friction, empowering commercial and pricing teams with insights into the deal structure and how best to apply incentives opportunity to ensure the most competitive and profitable sale.
Organizations benefit from:
With PROS and Enable, enterprises will achieve greater operational efficiency by eliminating slow, manual rebate management processes and replacing them with automated calculations, and accelerated workflows and approvals.
For more information on the PROS and Enable partnership, you can check out this recent blog post.
And you also might be interested in PROS and Enable Rebate Management for Omnichannel Selling | PROS
If you're looking for a CPQ solution that can help you manage rebates and discounts, contact us today. A member of our team would be happy to show you how PROS can streamline your quote-to-cash process.