The first week of every month
Your commercial suppliers send you material: a print works sends paper offcuts, a distribution centre sends baled cardboard and film, a manufacturer sends aluminium swarf. Each one gets paid a rebate for what they send, and each one's arrangement is different. The print works gets a fixed rate per tonne. The distribution centre gets a price linked to a published index, less a handling charge, less the cost of the container exchanges. The manufacturer gets a percentage of what you sell the swarf for.
In the first week of the month your office manager pulls the tickets for each supplier, looks up the index, applies deductions for moisture and contamination noted on the tickets, subtracts collection charges, and produces a statement in Excel. Then a supplier's finance team queries the index figure used, and she has to reconstruct how she got it.
Why rebates resist automation
Rebates look like arithmetic, but the rules sit in contracts and emails and change more often than anyone writes down.
- Every supplier has a different pricing basis: fixed, index-linked, share of sale price, tiered by volume.
- Deductions for quality are recorded on paper tickets or in notes.
- Collection and container charges are netted off, but come from a different system.
- The index or market figure used must be the right one for the right period.
- Statements are rebuilt each month rather than generated from rules.
How rebates are structured is your commercial decision with each supplier. The problem is applying those decisions accurately every month.
What manual rebates cost
A week of skilled office time every month goes into calculation rather than checking. Errors either underpay suppliers, who notice and question everything afterwards, or overpay them, which nobody questions and you never recover.
Rebate statements are also a big part of how suppliers judge you. Late, unclear or inconsistent statements make it easier for a competitor to win the account with a better-looking offer, even if your prices are good.
How we calculate rebates from the load records
What we build turns each supplier's arrangement into rules and applies them to the loads recorded through the month.
- Each supplier's rebate arrangement is set up as a rule: pricing basis, index source and period, handling charges, volume tiers, and how deductions apply.
- Load records come from your weighbridge system, with net weights, grades and any deductions recorded at the gate.
- Index or market figures are entered once per period, with their source, and every rule that uses them picks them up.
- Collection and container charges for each supplier are brought in from your transport records or accounts package.
- The month's statement is calculated for each supplier, with every load, price and deduction shown. A person reviews exceptions, such as unusual deductions, before approving.
- Approved statements are sent to suppliers, and payments or self-billing invoices are created in your accounts package.
| Rebate basis | What the rule needs |
|---|---|
| Fixed rate per tonne | Rate and effective dates |
| Index-linked | Index source, period, adjustment |
| Share of sale price | Link to the sale of that material |
| Tiered by volume | Tier thresholds and rates |
| Net of charges | Collection and container charges for the period |
The first week of the month, now
On the first working day the office manager enters last month's index figures. The statements calculate. She opens the exceptions: one load from the distribution centre with a heavy contamination deduction, which she checks against the photo from the gate, and one supplier whose volume crossed into a higher tier. She approves the statements by lunchtime.
When the distribution centre's finance team queries the index figure, she opens the statement and shows the index, its source and the period used, alongside every load.
Are rebates a monthly ordeal?
- Rebate statements are built in Excel each month.
- Each supplier's arrangement is remembered rather than written as rules.
- Suppliers query statements and the calculation is hard to reconstruct.
- Deductions are recorded on paper and applied inconsistently.
- Statements are late because the calculation takes days.