They have three main rebate types and two rebate subtypes. The types are Tier Rebate, Masking Rebate, and SP Rebate. Under Tier Rebate, there are the two subtypes, incremental and cumulative. There is a contract with each Customer who receives the rebates based on the quantities shipped. Their process included manually calculating each rebate in an Excel spreadsheet based on a shipping report and the individual customer contract for specific part numbers. At the end of each month, the Sales Team would send the spreadsheets and other supporting documents to the Finance Team. The Finance Team would review the documents and generate a Journal Entry to record the accrued amount in the Accrued Customer Rebates account. Then the Sales Team would receive a request from the Customer for the rebate amount to be either paid out to them or used as a credit against their next order. This request would come in the form of a Vendor Bill that would be validated by the Sales Team and manually entered as a Vendor Bill in the system.
The issues that have come up with the process is that the accrued amount used in the manual Journal Entry would not match a recently run shipping report in NetSuite. The transactions that generated the rebate amount would also not match the Journal Entry amount. The manual process relied on the sales operations team for all the calculations with very little internal control.