1. Implementing Channel Revenue Management
  2. Supplier Annual Program

Supplier Annual Program

Supplier annual rebate is the process by which a wholesaler or retailer purchases goods from a supplier over a period of time, typically a year.

The supplier may offer annual rebates that encourages buying based on accumulated volume attainments for the year. Target attainments are tiered. For instance, if you purchase under a million dollars, you get 3% discount. If you purchase between 1 and 2 million dollars, you get 5%. Above 2 million, you get 8%.

Channel Revenue Management provides wholesalers and retailers the ability to:

  • Centralize annual rebates from suppliers

    You can define annual programs based on accumulated attainments across orders, including:

    • Percentage rebate based on purchase value tiers

    • Amount rebate per UOM based on quantity tiers

  • Automate accrual tracking

    This leads to better visibility and faster realization of supplier incentives.

  • Automate claim processing

    This helps reduce margin leakage through accurate claim computation, thereby reducing supplier rejection. The streamlined process helps wholesalers realize value faster on supplier rebate claims.

  • Automate channel accounting

    The faster realization from supplier incentives through automation reduces time to implement and the cost of ownership.

This figure shows the volume attainments possible with annual rebates.

Supplier Annual Program Overview

Supplier annual rebate is the process by which a wholesaler or retailer purchases goods from a supplier across a duration of time, typically a year. What makes supplier annual rebates different from supplier rebates is that volume attainments are accumulated across orders. In supplier rebates, rebates are in the context of a given transaction. In supplier annual rebates, rebates are in the context of accumulated volume attainments across orders over a period of a year.

  1. Supplier offers or negotiates an annual rebate.

  2. Wholesaler/retailer buys from the supplier and supplier ships the goods.

  3. Wholesaler/retailer receives the invoice from the supplier and accumulate volumes across orders.

  4. Accruals are calculated as percentage rebates based on purchase value tiers, or as an amount rebate per unit of measure based on quantity tiers. Retrospective or stepped calculations are supported.

  5. Accruals are compiled into claims for review and approval.

  6. The claims are settled by issuing debit memos (or payments against the supplier invoice for supplier rejections).