Alexa Dhillon PeopleSoft SRM Product Strategy Manager Vendor Rebates Alexa Dhillon PeopleSoft SRM Product Strategy Manager

$$$ Increases Customer Profits $$$ Vendor Rebates Allow customers to capture contractual rebate agreements with their suppliers, accrue rebate amounts and receive rebate payments Introduced in Release 8.9 Included in Purchasing Product $$$ Increases Customer Profits $$$ Vendor rebates are an important cost savings tool for many organizations and are a critical revenue-generating process in the wholesale distribution industry. Because as much as 50 percent of cost savings can be tied to rebates, it is critical for rebate managers to have a means to record the detailed agreed upon terms with the supplier and accurately calculate the expected rebate amounts. It is also important to have a means of settling rebate amount disputes with suppliers. Purchasing 8.9 adds support for the full vendor rebate lifecycle.

Vendor Rebates Accurately Record and Track Vendor Rebates Proactively Manage Claiming Rebate Amounts from Suppliers Effectively Utilize Rebates and Maximize Rebate Potential Don’t need to commit to volume, as customers do to get contract or discount pricing Popular in Wholesale and Healthcare industries Accurate Recording and Tracking of Vendor Rebates Purchasing 8.9 enables procurement organizations to capture the complex rules related to rebates from suppliers in a user-friendly and concise manner using Vendor Rebate Agreements. You can capture multiple rebate rules within a rebate agreement such as standard rebates, retrospective rebates, marketing contributions and so forth, to fully define the contractual agreement within the application. The rebate accrual process can then accrue rebates against on-going purchases and track the earned rebates to-date. With an accurate picture of the accrued rebates, rebate managers can take control of the rebate process and ensure that all rebate-based savings have been realized. Claims Management The Claims Generation process enables rebate managers to be proactive in claiming rebate amounts from suppliers. Once rebates are accrued, rebate managers can generate claims for the accrued rebates and inform suppliers of the rebate claims and payment terms. To assist suppliers in paying rebates, suppliers can be given the option of paying by check or through a debit memo. Rebate managers can closely manage the rebate claims process by using the Claims Management Workbench, which enables them to track what rebates have been paid and what’s due from suppliers. This helps ensure that organizations collect rebate claims in a timely fashion and results in cost savings. Rebate Analysis To enable managers to utilize rebates most effectively and to maximize the rebate potential of their purchases, rebate managers can analyze rebate transactions to determine if additional purchases are needed to reach the next rebate threshold level, as well as view open POs associated with rebate agreements. Managers can then decide how to influence procurement decisions in the best interest of their organization and can uncover additional cost savings opportunities that would normally have gone unnoticed.

Vendor Rebates Integrated into the Procure-to-Pay Process PeopleSoft Purchasing is being enhanced to enable the definition and utilization of vendor rebates. In wholesale distribution, negotiated terms between the supplier and customer are recorded in the form of a contract. Rebate agreements are a form of contract existing between a supplier and customer where the supplier will pay the customer a predetermined amount of money for qualified purchases. We are adding several new components to address the complete vendor rebate business process—rebate definition, vendor rebate tracking, claims management, and rebate analysis.

Vendor Rebates Accurately Record and Track Vendor Rebates Rebate Agreement Purchase Order PO Receipt Voucher RTV Backdate Rebate Agreement Accrued Rebate Benefit: Proactive in claiming rebate amounts How: Accurate picture of accrued rebates Realized rebate savings

Vendor Rebates Automatic Creation of Bill To Customer from Vendor Use Bill To Customer for Claiming Rebates through Accounts Receivables Create bill to customers for each vendor using the Vendor Information - Identifying Information page if the settlement method for the rebate agreement is anything but Adjustment Voucher.

Vendor Rebates Rebate Agreement Access to Rebate Agreements are controlled by security options within the user preferences Rebate Agreement component: This is a new component that gives you the ability to create a complete vendor rebate agreement and dispatch it to the supplier. Using this component you can associate multiple rebate rules (stepped/standard, retrospective, flat amount, growth bonus, and marketing contribution) to the vendor rebate agreement. These options are used for controlling how rebate defaults onto PO

Vendor Rebates Rebate Options Settlement Frequency and the calculated Next Claims Generation Date determines the date the Claims will be generated General Options – Dictated by supplier Settlement Options – how will customer get money? Frequency of generating claims Two Notifications Settlement Tolerances – supplier sends in payment, but it’s 11,000 less than expected. Will incoming payment automatically reconcile? No! How is the accounting template used? These options are used for controlling how rebate defaults onto PO

Vendor Rebates Rebate Rule Types Standard (Stepped) Rebate factor percentage based on defined purchase threshold levels during the rebate agreement life Retrospective Same as Standard, except Reaching Higher Threshold Level Changes Rebate Percentage for all Purchases to Date Flat Amount Growth Bonus Based on a Specified Increase in Item or Category Purchases Marketing Contribution One-Time Rebate for the Life of the Rebate Agreement

Vendor Rebates Rebate Rules

Vendor Rebates Rebate Associated with PO Rebate Automatically Defaults onto PO Security controls whether buyer can view / edit Rebate ID On-line entry PO Sourcing

Vendor Rebates Associating Rebate with Purchase Order Rebate must be Approved PO date must fall within Rebate Agreement Begin and Expire dates Rebate vendor, and optionally vendor location, matched against PO vendor Rebate vendor matched against vendor specified on GPO Manufacturer page (for GPO Contracts) Item, Category, and Item Exceptions; or Open Item Rebate Agreement Automatically Include PO Adhoc Items PO business unit specified on Rebate Agreement (for non-corporate Rebates) Direct Ship Option (Include Direct Shipments, Exclude Direct Shipments, Direct Shipments Only)

Vendor Rebates Rebate Accruals and Backdating Rebate Agreements Calculates accrued rebates for PO Receipts, Vouchers, and RTVs against POs associated with the Rebate Agreement Backdate Rebate Agreements Associate or Disassociate Rebate Agreement with purchase order Rebate accruals will be recalculated accordingly Accruing against Receipts and RTVs is optional Always have an accurate pictures of what has been accrued, and can view in rebate analysis Want to have system kick off this process every day or so.

Vendor Rebates Proactively Manage Claiming Rebate Amounts from Suppliers Formal Claim Rebate Manager Notification Settlement Manager Notification Rebate Claims Claims Management Workbench Incoming Payment AP Debit Memo Receive Rebate Payments Benefit: Cost savings How: View paid and past due rebates Ensures rebate claims collections AP Notification AR Payment Notification AR Pending Item

Vendor Rebates Rebate Accrual and Claims Generation Processes Allows Rebate Managers to be Proactive in Claiming Rebate Amounts Provides Accurate Picture of Accrued Rebates Realize Rebate Savings Rebate Accrual component: This is a new component that gives you the ability to run the Rebate Accrual process. This process will accrue rebates against on-going purchases and track the earned rebates to-date. • Claims Management Workbench component: This is a new component that gives you the ability to manage a claim through its complete lifecycle.

Vendor Rebates Claims Management Workbench Manage all Claim activities View Paid and Past Due Rebates Ensures Rebate Claims Collection Vendor Rebate Claims Management One of the last steps in managing a successful vendor rebate program is to be proactive in claiming rebate amounts from the supplier. When rebates are accrued, you can generate claims for the accrued rebates and inform suppliers of the rebate claims and payment terms. To assist suppliers in paying rebates, suppliers can pay for the rebate using a variety of settlement methods: adjustment voucher, check, credit memo, direct debit, draft, and electronic funds transfer (EFT). PeopleSoft Purchasing provides you with the claims management workbench to assist you with the management of claims and the payment process for these claims. The claims management workbench enables you to: Review, approve, and generate a formal claim to send to the supplier. Settle a claim. Reconcile incoming payments. Defer a claim to the next payment cycle. Create deductions or reverse deductions to accommodate overdue payments from the supplier. Overall, the claims management workbench enables you to track what rebates have been paid and what is due from suppliers. This helps ensure that organizations collect rebate claims in a timely fashion and results in cost savings. Result: Increased Revenue!

Vendor Rebates Claims Generation Be Proactive in Determining How Much Rebate Amount to Claim from Supplier Generate Claims based on Accrued Rebate Transactions Claims generation date determined by Settlement Frequency and the calculated Next Claims Generation Date defined on the Rebate Agreement Automatically runs Rebate Accrual process before generating claim to calculate most accurate claim amount Validates Rebate Agreement’s Maximum Rebate Amount

Vendor Rebates Claims Management Workbench Review, approve, and generate a formal claim to send to the supplier Settle a claim Reconcile incoming payments Defer a claim to the next payment cycle Create deductions or reverse deductions to accommodate overdue payments from the supplier Reconciliation process uses settlement tolerances defined at BU and Rebate Agreement to determine if the payment is sufficient to cover the Claimed amount Overall, the claims management workbench enables you to track what rebates have been paid and what is due from suppliers. This helps ensure that organizations collect rebate claims in a timely fashion and results in cost savings. View claims based on unique Workbench ID Approve, Defer, Cancel, and Unapprove Claims Dispatch claims to inform suppliers of expected payment Informs Payables/Receivables of pending supplier payment using Claim Settlement Process Receive Rebate Payments Matches supplier payments with Rebate Claims using the Reconciliation process For overdue payments, reverse Pending AR item, and send Debit Memo to Payables Track what rebates have been paid and what is due from suppliers

Vendor Rebates Effectively Utilize Rebates and Maximize Rebate Potential Benefit: Uncover cost savings opportunities How: Analyze thresholds View open purchase orders Rebate Analysis Report Rebate Analysis Workbench Rebate Analysis Extraction Rebate Allocation

Vendor Rebates Rebate Allocation Record accrued rebate allocations allocated to sales organizations

Vendor Rebates Rebate Analysis Workbench Uncover cost savings opportunities

Vendor Rebates Rebate Analysis Workbench Analyze and inquire on Rebate Agreements View or extract all accrued rebate details View or print PO not Received inquiry Determine additional purchases to achieve next rebate threshold Evaluate rebate transactions by Month, Quarter, or Year Vendor Analysis Workbench component: This is a new component that gives you the ability to perform multiple inquiries to analyze vendor rebates. You can perform rebate threshold analysis and time period analysis, view purchase orders that have not been received, and view accrued rebate details.