A supplier rebate is money that a supplier commits to pay back to a buyer once agreed contractual conditions - typically volume, growth, or performance-based - have been met. It is the buy-side counterpart to a customer rebate.
How supplier rebates flow
The contract specifies tiers, formulas, and settlement windows. Actual purchasing runs through the ERP; the earned rebate accrues; at settlement, a claim is filed and the supplier pays out - usually as a credit note or offset against future invoices.
The most common leakage patterns
Missed tier thresholds, closed claim windows, and inconsistent pricing invoices are the three biggest sources of supplier rebate leakage. Continuous reconciliation of contract terms against ERP purchasing data is what closes them.
