Rebate Automation and Management

Ilmie Sham Ku

Many wholesale distribution companies may agree that customer rebates are an “oldie but a goodie” when it comes to increasing sales.  This trusted sales and marketing incentive is an effective way to maintain a certain level of product movement and customer retention because let’s face it, everyone loves a deal and customer rebates are irresistible to many consumers.

However, if you’re thinking about implementing a rebate program for your customers, it’s important to consider rebate automation and management to avoid being stuck in a web of confusion, not to mention it will also help control some of the costs of administering the program. The last thing you want is for the costs of running the rebate program to outweigh the benefits to your business.

What is a Rebate Program?

A rebate is a special agreement granted to the customer after a specific volume of product is purchased over a specific period of time. The special agreement could be for one specific product, or a group of many products often determined by vendor or category. The idea is to refund/rebate the customer a certain percentage/amount based on a specific volume purchased over a set period of time normally set and agreed to by the customer and seller.

Unlike a discount which is a deduction made to the price of the product at the time of purchase, a rebate is normally given after the designated period, on invoices that have been paid in full by the customer. It incentivizes and puts the responsibility on the customer to meet specific purchase volumes and pay their outstanding invoices on time in order to take advantage of the refund/rebate.

Manually administering and tracking rebate programs can be simple if the volume of rebates is low. However, as you can imagine, when you have hundreds of rebate programs and need to track the qualification of each customer, it is time-consuming and requires hours of manual labor which is of course, prone to human error and can cost your business money. This is why implementing software that helps manage and automate the complexities of a rebate program is highly recommended in order to successfully increase order volume.

Keep in mind that with growing sales, comes additional complexities of back-end order fulfillment. Consider implementing an all-in-one ERP software solution that can not only manage rebate programs but also have robust back-end functionality such as inventory management, warehouse management, and advanced accounting capabilities.

Rebate Automation Programs with Blue Link ERP

With an integrated ERP software solution, you will be able to generate key data to better manage the rebate process- it’s simply a matter of pulling the right data from within the system, at the right time, for the right customers. Blue Link has the ability to provide specific customer information based on what they’ve purchased during a specific period. With the generation of a simple report, Blue Link can provide the purchase volume of applicable products for a customer or customers that belong to a specific rebate program.

Let’s take a look at an example.

You are a wine distributor and have decided to offer a rebate to your local customers that buy red wine. If you don’t have many rebates to manage, a simple way to handle this would be to generate a report from within Blue Link that contains all your rebate customers (customer type) filtered by ship-to addresses, who have purchased red wine (product type) and will also indicate how much red wine was purchased (sales history) over a specific period of time.

Depending on the rebate amount/percentage and how the rebate will be reconciled, you can then either manually calculate the rebate and create an A/P voucher or generate a credit to each of the qualifying customers one by one (which would take hours of manual work). Or, you can set-up the system to look at the specific amounts purchased and automatically create credit notes or A/P vouchers (whatever settlement method you choose) to those customers who have met the rebate criteria.

The ability to create rules and define rebates for customers based on various factors such as local vs. international customer ship-to addresses, customer type, product type, categories, and vendors is all available within Blue Link. If additional criteria are required user defined fields can be created to store data and then retrieve when needed. An example of data in a user defined field is the amount or percentage of the rebate. You can also make changes to the rebate program if you decide to change the amounts to be refunded or the promotion period.

Optimize Rebate Marketing 

A sign of a good rebate program is the actual promotion and marketing of it to your customers. It's important that the rebate program is top of mind for your customers to ensure they don't miss the promotion period. Blue Link helps you remind your customers when rebate deadlines are nearing by sending out automatic emails to those individuals. This gives your customers incentive to purchase more product if they are short a certain amount to meet the eligible rebate requirements, generating more sales.

Make Order Fulfillment Easy 

With the expected increase in sales that comes with a rebate program,  the need to have better visibility and control of your inventory to avoid costly mistakes such as shipping errors and running out of stock is as important as the rebate program itself. The following Blue Link functionality makes the order fulfillment process smoother.

Landed Cost Tracking
  • Indicates the true cost of goods (including freight fees, duty, insurance, brokerage, etc.) to help businesses determine the best rebate amount to apply based on the full cost of a product
  • Ability to specify default landed cost factors by product
  • Ability to apply each landed cost factor to each line on a purchase order using one of several pro-rated methods – or enter individually
  • Ability to reassign landed cost components to different vendors after receipt of purchase orders
  • On-screen lookups and drill down to landed cost details from inventory screen
  • Drill down to landed cost details from Purchase Order History


Inventory Management
  • Visibility of inventory in multiple warehouses
  • Handles serialized inventory
  • Multiple units of measure
  • Automated reorder management – multiple methods to determine order levels and quantities with auto creation of purchase orders
  • ‘Available to Promise’ to display future quantity availability based on currently recorded open purchases and sales
  • Inventory counts – full and cycle counts
Warehouse Management
  • This component allows a warehouse employee to select an order to ship, enter shipment details, print the documents required to accompany the order, and mark the order as shipped
  • Based on rules defined in the system, the act of “shipping” the order may also result in an invoice being printed (that could accompany the shipment), and even posted
  • Use this screen to:
    • Enter ship quantities
    • Record serial numbers
    • Print Picking Slips, Packing Slips, and Invoices (based on security)
    • Mark the order as “shipped”