7/24/2023 0 Comments Net invoice definitionWithout a TPM solution, rebates are time-consuming to track, monitor and analyze. Manufacturers need a TPM solution to keep track of bill-backs by promotion by item by customer. However, rebates offer several challenges. Hold back the discount incentive until you can verify the retailer qualifies for the discount. ![]() Reduce the price with a Rebate? Manufacturers may consider rebates a financially conservative way to discount their products. Ok, so if a change in list price for the customer isn't a good option, what are the other options? Changes in list price often don't have budgets, and once implemented the customer-specific pricing action may remain in place longer than intended. As it is often said, anything that isn't analyzed can't be managed. The price change is only apparent when comping the average list price across customers for the same items, and sometimes cash-discount, price-brackets and other non-promotional pricing differences can mask the impact of a customer-specific list price. That revenue reduction isn't broken out on most reports. While rebates, off-invoice and net-bill allowances appear as expenses on a customer P&L, a change in list price only reduces the top-line revenue. ![]() Changing a list price 'hides' this change in standard P&L reports. Let's explore these options from the perspective of the manufacturer:Ĭhange the customer's list price? It is common to just change the list price of a product in your ERP to create a customer-specific price list, While this is a quick and easy way to reduce the price for a large customer, it has many draw-backs. What's the difference between changing the customer's list price in the ERP, giving a rebate, an off-invoice allowance or giving it as a net-bill?Īs it turns out, it does matter how you discount your products. You need to give your largest customer a discount for several months or longer.
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