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Customer rebate management is the process of creating rebate and other off-invoice incentive programs, enrolling customers in those programs, accruing payments, forecasting profitability, and analyzing program effectiveness.

Most B2B companies manage this complicated, time-consuming and multi-departmental process manually, using spreadsheets and legacy systems. This creates challenges because rebate management can only be effective if sales against rebate agreements are tracked precisely, and rebate claims are paid out in a timely fashion.

Why is Rebate Management Software Necessary?

Manual processes are error-prone, inefficient, and ultimately counterproductive. Accordingly, an increasing number of B2B companies are adopting a centralized rebate management system built on a flexible software platform.

First, let's discuss the value of rebates and define common off-invoice incentive programs. Then, we'll talk about how a rebate management solution benefits stakeholders across an organization and its customers.

Whitepaper: What is Rebate Management?

Off-Invoice Incentives, Defined

Rebate and other off-invoice incentive programs are highly strategic and potentially invaluable to B2B companies of any size. These programs drive brand loyalty, incentivize the desired customer behavior and protect price integrity by preventing over-discounting. Common incentive programs include:


The most common form of off-invoice discount, a rebate is an amount paid from a supplier to a customer after the latter has met an agreed-upon metric or criteria. Rebates can be based on volume programs, sales targets, incremental growth or targeted accounts and products.


Off-invoice promotions include vehicles such as coupons and temporary or time-boxed discounts, often based on a stated volume.

Shared Expenses

From time to time, companies will partner on joint advertising and business development initiatives, with off-invoice payments changing hands at a later date based on the success of the program.

Rebates and other off-invoice incentives factor in significantly to both pocket price and pocket margin. Since these payments are made well after the initial agreement, they can negatively impact margins if not carefully accounted for, as we will explain below.

For the purposes of this article, we will refer to each of these incentive programs as “rebates” from here on for simplicity.

Why Managing Rebates is a Challenge

The process of rebate incentive management is cumbersome and only grows in complexity the larger a company is, and the more rebate programs it offers. It’s not uncommon for a company to offer a wide variety of rebate deal structures to its clients, sometimes without a clear understanding of who is doing what internally.

For instance, a sales manager may create a one-off rebate program for several strategic accounts in his or her territory. Finance is ready to close the books in January, but then it becomes aware of this deal and has to do last-minute scrambling to account for it, issue credits, and recalculate company financial performance. Little thought to corporate strategy or the health of the business was considered in this one-off scenario, which is all too common.

The above example is indicative of a decentralized, manual rebate management approach. Given the time lapse between rebate agreement and actual payment, plus the multitude of departments involved in the process, the traditional tracking methods are insufficient. All the benefits of a rebate program, such as customer loyalty and increased sales, become short-lived. Instead, payment disputes or delays torpedo the customer experience, while internal confusion and tedious hours spent deciphering spreadsheets frustrate employees.

Slow and delayed payments or disputes over what was initially agreed upon tend to be the headlines when discussing poor rebate management. Indeed, these problems lead to highly visible customer satisfaction issues and a slower cash flow.

Of equal importance, however, is the rigor that must go into setting up the thresholds and parameters that make up each rebate play. How much intelligence goes into setting volume and growth targets, or for that matter, payout amounts? How reliable and accessible are performance metrics? For most B2B companies, the answers to those questions are “not much” and “not very.”

An automated rebate management system can help resolve issues like these, by facilitating collaboration between trading partners, providing greater visibility and control over financial performance, and ultimately strengthening customer relationships.

rebate manager

Who is Involved in the Rebate Process?

As alluded to above, a complicating factor inherent in rebate management is the multi-stakeholder nature of the beast. The following personas play crucial roles in the process and must work collaboratively to succeed.

Product Management

Often, product managers serve as rebate managers for product-specific campaigns. It is up to them to identify and quantify the target products and sales goals, respectively.


Pricing managers must be intimately involved in defining payment tiers and calculating rebate thresholds. They need to be anticipatory and project various outcomes, ensuring that deals meet profit goals whether rebates are achieved or not.

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