Rebate Management: Dealer Rebates Without Excel

Rebate management pays off for manufacturers who calculate rebate programmes for many dealers, with tiers and periods, in spreadsheets today, and whose dealers keep asking where they stand. The Manufacturing Cloud feature manages programmes and members, calculates rebates per period and routes them through an approval. Payouts still happen in the ERP. Whether it holds up is decided in two places: where the rebate-relevant revenue comes from, and what exactly counts as revenue. Like part 4, I am writing this part as an evaluation guide, not as a project report.

What does rebate management do?

Rebate management covers a rebate programme from definition to payout approval. The Salesforce Help article on the workflow1 describes the steps like this:

1. Create the programme. The programme manager creates the programme and sets the payout frequency, monthly, quarterly or yearly.
2. Enrol members. Partner accounts become members of the programme.
3. Define rebate types and tiers. Each rebate type has a calculation and tiers, for example a higher percentage above a certain revenue. Tiers can vary by custom criteria.
4. Load transactions. Members’ revenue lands in the Transaction Journal object.
5. Calculate. A scheduled flow starts the Data Processing Engine, which aggregates transactions per member and period and works out the rebate.
6. Review and approve. Account managers and programme managers review the amounts, adjust them if needed and approve them, by hand or through an approval by supervisors.
7. Settle. An integration pulls approved amounts into the ERP.

Until the calculation date, a member’s status reads “Calculation in Progress”, afterwards “Calculated”. So sales can see during the period where a dealer stands, not only at year end.

Where do the transactions come from?

The calculation only uses the revenue that sits in the Transaction Journal. According to Salesforce Help2 there are three routes:

Source	How it reaches the Transaction Journal	Fits when
Orders in Salesforce	A predefined Data Processing Engine definition transfers active orders	orders live in Salesforce anyway
Partner documents	Partners upload invoices or proof of sale as CSV through Experience Cloud	the rebate depends on the dealer’s sell-out
External systems	Integration, Bulk API or Data Loader, for example from the ERP	invoices live in the ERP

For most manufacturers it will be the third route, because invoices are created in the ERP. That raises the same question as for sales agreements in part 3: which data does the ERP deliver, at which level and how often?

The second route is interesting for a particular kind of programme. If the rebate depends on the dealer’s sales to their own customers, only the dealer knows the numbers. Then they upload them, and the manufacturer needs a check before it turns into a payout.

What counts as rebate-relevant revenue?

No system answers this question. According to Help, programme managers decide what a transaction contains and whether to calculate per transaction or on an aggregate. Before building, I would put three points in writing:

• Order, delivery or invoice. A rebate on orders runs ahead of the invoice, a rebate on invoices is closer to what finance books. Which one applies should be in the dealer contract.
• Returns and credit notes. Is a return deducted from revenue, and in which period? Without that rule, Salesforce calculates a rebate on revenue that never stayed.
• Which products. Many programmes exclude product groups or weight them differently. Those criteria have to be fields on the transactions, or the tiers cannot take them into account.

Today these rules usually live in the spreadsheet someone in sales or finance calculates with. So the first step of an implementation is to read that spreadsheet and turn every formula in it into a rule.

The payout stays in the ERP

According to Help, an integration pulls approved amounts and accruals into the ERP, and finance settles them there, by cheque, credit note or another method.

This gives the architecture a clear split. Salesforce leads for programmes, members, tiers, the calculation and the approval, the ERP leads for invoices, credit notes, accruals and posting:

Accruals deserve their own meeting with finance. Anyone accruing an annual rebate monthly needs a number every month. If it comes from Salesforce, it has to be in the ERP in time for month-end close. How I decide leading systems per type of data is described under integration with ERP, middleware and telephony.

Dealers can see their amounts in the portal

That is optional. According to Help, partners can see their payouts through Experience Cloud. For dealers who ask about their status by email today, that is the most visible benefit.

In the overview of portal licences I describe in part 7: Manufacturing Cloud customer portal, Salesforce lists rebate claims under the Partner Community for Manufacturing licence. So if you want to show dealers their rebates in the portal, plan for partner licences, not the cheaper customer licence.

When does rebate management pay off?

The rule from that applies here too: you buy a feature when it fits the business. For rebate management, I would recommend it when several of these points apply:

• Many members. Dozens or hundreds of dealers, not a handful of customers.
• Tiered programmes. Several levels, product groups or periods that change every year.
• Errors in the spreadsheet. The calculation is laborious today, error-prone or depends on one person.
• Dealers ask. Inside sales regularly answers questions about rebate status.

I would hold back with a simple annual bonus for a few customers. Many ERP systems can settle that through pricing conditions, without a second logic in Salesforce. Rebates reward volume; price claims from distributors are a different process, see ship and debit. Whether Manufacturing Cloud pays off as a whole is covered in part 1 of this series.

Write every formula in the current rebate spreadsheet down as a rule

Before the first programme is created, settle these points:

1. Today’s spreadsheet. Write down every formula in it as a rule.
2. Rebate-relevant revenue. Order, delivery or invoice, with returns and product groups.
3. Transactions. Which system delivers them, at which level and how often?
4. Settlement. When do approvals and accruals reach the ERP, aligned with month-end close?

I go through the formulas in the current spreadsheet line by line with sales and finance. A formula nobody can explain does not go into the first programme.

Sources2

1. 1Salesforce Help article on the workflow (opens in a new tab)help.salesforce.com
2. 2Salesforce Help (opens in a new tab)help.salesforce.com