Rebates Best Practices

1) Develop a clear and easily measured two-way agreement

• Clearly specify the benefits, duration of the program and other key dates including: start date, end date and scheduled payment dates.
• Define the process and specific measurements that will be used for the rebate calculation and include an example calculation to prevent misinterpretation.
• Indicate exactly how the rebate will be paid. Aim to issue an account credit rather than sending a check or the customer taking deductions.

2) Create a clear procedure and documented authority levels for rebate agreement creation, modification and approval

• Provide a standard rebate template for sales or account managers to start with (including step one attributes).
• Establish a procedure that details the ownership of the rebate agreement process. This applies to new agreements or modifications to existing agreements.

3)  Communicate performance status to customers on a regular basis

• Develop a common reporting template that conveys performance status for each customer on a monthly basis.
• Ensure that a formal review is conducted between sales and the customer at least on a quarterly basis to prevent surprises or near misses to critical target thresholds.

4) Monitor & Adjust policy as necessary

• Establish a formal Rebate Administrator; often a Pricing Manager, Finance Manager or Sales Manager with direct responsibility for rebate portfolio performance and maintenance.
• Establish a summary chart of all customer rebate contracts.
• Conduct a periodic review of rebates and rebate trends to determine acceptable agreements and future agreement strategies.