Many suppliers offer volume-based price incentives based on various purchase levels, which means that as a buyer, you get a price break. However, incentive programs also benefit the seller because they guarantee a certain amount of sales.
Price breaks can add up to thousands of dollars in savings each year. In order to capture and track where that money is being accumulated, however, it is very important that all the information surrounding promotions or special price adjustments be collected. Sales and payments need to be monitored and updated. Otherwise, buyers can lose out on expected, earned incentives when they discover that a sales threshold was not reached.
The savings are there. But what’s the best way to ensure that your business takes advantage of offered incentives? Manually tracking all the transactions that occur over the course of a year is time-consuming and costly. Additionally, each program builds in requirements, like meeting deadlines and completing paperwork.
Manual tracking also makes it hard to have visibility into the process for both the buyer and the seller. Enter automation, a process that can improve the capture and fulfillment of sales incentive goals.
Digitally connecting all parties means that all the data is available 24 hours a day, seven days a week. The result is that the buyer gets the cash back they expect and the seller gets the sales they anticipated, along with customer loyalty and goodwill. In addition, sellers can use the data to reward their best customers with even better incentives and buyers are able to use the data to forecast future spend.
In some cases, suppliers offer rebates. Rebates can also be used as a tool to control indirect spend by consolidating the list of approved vendors to take advantage of those that offer rebates. However, you need oversight of individual purchases to ensure that there isn’t an increase in spend to hit a rebate target vs. looking to improve cash flow in the short term when it is needed. Automating the process will provide transparency into individual purchases and enable tracking of rebate targets and payments.
Promotions and volume-based price adjustments are reliable ways to reduce costs for things you normally purchase. Automating the process will ensure you get the maximum benefits.