This example shows how you can calculate payouts and accruals for a member. Accruals help you project an amount, whereas payouts help you track actual rewards.
Required Editions
| Available in: Enterprise, Unlimited, and Developer Editions that have Rebate Management enabled. |
Rebate Program
A company is running a rebate program for their partners in the APAC region. Acme is a member enrolled in the program. The program has a quarterly payout structure in which partners receive payouts every four months. The finance team wants to plan better for all upcoming expenditures during the next quarter by saving funds for these rebate payouts.
Rebate Type
The program manager creates a volume-based rebate type and specifies these details.
- Measure Type: Amount Per Unit
- Measure Field: Total Transaction Quantity
- Calculation Basis: Payout and Accrual
- Accrual Rate: 5
When Rebate Management calculates the payout amount for a member based on the aggregate data, the accrual amount is calculated simultaneously. Rebate Management calculates payouts based on benefit tiers, but the accrual amount is calculated at a flat rate of $5 rebate per unit of Total Transaction Quantity.
Benefit Tiers
Here’s the benefit structure.
| Benefit Tier | Minimum Value | Maximum Value | Applied Benefit Value |
|---|---|---|---|
| Tier 1 | 0 | 5000 | 0 |
| Tier 2 | 5001 | 10,000 | 2 |
| Tier 3 | 10,001 | Leave it blank | 5 |
Member Payout and Accruals
The admin has scheduled the Rebate Orchestration flow to run on the last day of each month. The scheduled flow run updates the accrual and payout amounts for a member based on the aggregate data at that point in time.
Here’s how Rebate Management calculates the accrual and payout amounts every 30 days for Acme during the first quarter. The first quarter starts from Jan 01, 2021 and ends on April 30, 2021.
| Transaction Activity Date | Total Transaction Quantity | Last Calculation Date | Applied Benefit Tier | Payout Amount | Accrued Amount |
|---|---|---|---|---|---|
| Jan 12 | 2000 | Jan 31 | Tier 1 | $0 | $10,000 |
| Feb 18 | 6500 | Feb 28 | Tier 2 | $13,000 | $32,500 |
| Mar 09 | 8000 | March 31 | Tier 2 | $16,000 | $40,000 |
| April 25 | 11,000 | April 30 | Tier 3 | $55,000 | $55,000 |
In the first half of the quarter, the member didn’t attain a certain quantity threshold. As a result, payout calculations can provide an inaccurate view. But with accrual calculations running simultaneously, you can continue to project attainment values. Eventually, when the member begins to attain benefits at higher tiers during the end of the quarter, you have adequate funds for payout settlement.