Rebate management for a big builder can be an administrative nightmare. The diverse set of supply categories used in home building rarely fits nicely into an accounting system. Each category can have a very different deal structure associated with it making it impossible to reflect supplier agreements properly. Some deals are based on starts, others closings. Some deals are per home and others on square footage, number of floors, cubic yards, or linear feet.
Our systems can handle it all.
The opportunity is to easily and simply aggregate volume and suppliers across the organization, provide the information useful for deal negotiation, and provide the information to the various divisions and regions on the deal opportunities and ways to maximize profit. It is important to calculate rebates, manage accruals, and bill and collect monies from suppliers leaving zero dollars on the table in a low cost way.
It is also important to be able to distribute deal benefits to the group that generated the savings with complete visibility and transparency in order to incent and reward the desired participation from the field.
Builder Sourcing’s people and systems do all of this for you.
We are provided the raw data and then take it from there. No filling out forms. No entering of data. No chasing of suppliers. No loss of time or revenue. Just lower administrative cost and more profit!
The Problem – Rebate Management Is Not Easy
One of the ways to improve profit margins is with efficiently and easily taking advantage of the rebate programs made available to builders. However, many builders face a variety of challenges when trying to manage their programs in the multi-divisional, non-centralized purchasing approach. Separate systems, different accounting codes, multiple documents and spreadsheets can lead to frustration and profit loss.
If you are operating in this environment to manage your rebate programs this way, it not only costs time but you likely are leaving money on the table without complete visibility as to what you are owed or what you could have earned. And that is not good.
- The potential for rebate programs are not always known by category or based on volume of the entire organization
- Most financial accounting systems fail to manage costs correctly when the discount calculation is after the fact
- The issue is compounded by complexity in the various trade agreements and calculations
- Keeping track of all of the details is made even more complex when purchasing is decentralized
- Use of spreadsheets to manage all details vs. an automated system – this process can be error prone & time consuming
- Some rely on suppliers to work it out for them and expect them to get it right
- Some use their accounting systems but these systems typically cannot handle the complexity
- Loss Of Profit
- Inaccurate Billings
- Lack Of Controls
- Slow Cash Flow
Builder Sourcing’s Builder Rebate Management, a system for big builders, solves this problem!
A Builder Rebate Management System for big builders provides:
- Improved financial controls
- Elimination of a lot of time and effort from manual processes
- Improved audit trail providing a transparent, consistent, and auditable basis for billing and collection
- Improved cash flow – rebate earnings are claimed earlier ensuring timely collection of the full amounts due
Builder Sourcing’s Rebate Management System provides:
- Sophisticated rebate management software solution that can provide all accounting entries
- Built to manage the complexity of the building industry’s rebate programs
- Combined with many years of experience in rebate management and deal potential
- Complete with analytics and detailed/summarized reporting
- Offered with unmatched personal service
Builder Sourcing’s approach is manage all of the complexity and work so you don’t have to. No entry of data. No chasing of suppliers. Just home building.
We do all of the work so you don’t have to.
The initial effort has us organize all of your existing house plans, programs and usage. This would include:
- Catalog all existing rebate and incentive programs
- Catalog all house plans/types by product usage
- Review potential by category
- Create plan for improvement, establish goals
- Provide information for roll-out the field and trades
On a quarterly basis, the following is performed:
- Builder – Send to BSC a starts, closings and usage report
- BSC – Bill suppliers, track accounts receivable, ensure collection
- Builder – Receives funds with notification going to BSC (lock box)
- BSC – Prepare results statement and benefit distribution report, create opportunity analysis
- Builder – Review opportunities, adjust participation accordingly
- BSC – Update catalog of programs and plan usage
Builder rebates lower costs. However, participation in these programs can be frustrating, time consuming and the results of this effort can be lost. Or, it can be believed that it just isn’t worth the effort.
Builder Sourcing solves all of this, removes the frustration and provides all of the benefits.
The benefits to the management team include:
- Elimination of the time & cost for pulling together rebate information across the entire organization
- Simplified billing & collection of rebate monies
- Maximum potential from rebates is completely understood
- A plan will exist to improve results from the use of rebates
- More profit
The benefits to the people who had been tasked to perform this work include:
- Eliminate the time and cost of managing rebates
- More time to focus on home building
- Better performance
Builder Sourcing’s Builder Rebate Management System improves results, lowers costs, and frees up time.
Using Builder Sourcing’s Rebate Management System and Service is free. Our business model is a pay for performance approach that pays for itself.
How it works is as follows:
- Builder Sourcing charges a fee which is a percentage of the rebate monies managed
- We are incented to help you get the most dollars per home possible
- You save the cost of managing these programs in-house, usually by more than half
- You make more money by our help to find opportunities to participate in more or higher value programs
- You make more money by never leaving money on the table – all rebates are billed, all dollars are collected, zero loss
- You make more money by having your money quarterly and on-time all of the time
Builder Sourcing has yet to meet a builder that we have not been able to pay for our service based on improved results from our support and our systems. We are confident that you will agree that there is a great opportunity to have us perform this work on your behalf.
Frequently Asked Questions
Builder Sourcing’s Rebate Management Program for big builders is designed to maximize the money received from the builder programs available in the market. We start with the programs that you have already in place. We work with you to help you decide if those are the best ones for the future or if you would like to pursue any others. These choices are always yours.
Our goal is to maximize the value possible from each category where rebate and incentive programs are available that represent good choices for you.
Here are some of the questions we typically hear and their answers to help you better understand our program and how it works.
That is not a problem as we do not change how you typically buy materials for the home. Essentially, the manufacturers will pay you, the builder, a rebate on the materials purchased by your sub-contractors provided you specify their products to be used. For example, typically, your painter buys the paint for your projects. They still will. If you ask or direct them to use a particular paint supplier, the supplier will track the paint purchased by your painter for the paint used on your homes and pay you a rebate for the products purchased on your behalf.
Tell them that they are correct if you are buying direct from the manufacturer and when you are guaranteeing that manufacturer a particular volume level.
However, you can tell them that rebate programs do work, especially in those cases where the materials get to the job site from a subcontractor or distributor and not direct from the manufacturer themselves or when volume discounts are involved. In most categories in home building, builders and their sub-contractors are buying materials through distribution. Therefore, there is no other way for a manufacturer to pass on a discount or an incentive to an individual customer of that distributor. The only way for them to pass on this reward is in the form of a rebate.
This is a very common structure for a big builder. From a rebate management stand point, we would take our cue from you. You would decide if rebate programs are to be managed nationally, regionally or locally. And the answer may differ by product category. All of that is fine.
Important also is to determine the points of contact you wish us to have. We can work at whichever levels you desire as our tracking and reporting systems go down to the lowest level of detail which would be a division. As a result, we can communicate with the purchasing organizations at the divisional, regional or national levels. The choice is yours.