Procedure S46 / Issue 2.0

Procedure:Rebates Processing and Validation /

Document No: S46

Written By:
Corey Bryant, Murray Thomas
National Business Managers

Hospital

Community

/ Approved By:
Andrew Oldale

FinanceDirector

Issue Date: 29/4/2010
Supersedes: Issue 1 / Issue No.

Issue 2.0

/ Issued by:Document Controller
Wendy Holden / Doc. Index Updated
Y
Reason For Issue:
Update to refer to new pricing procedures

Distribution:State Sales Managers

National Business Manager - Hospital

National Business Manager– Community

National Sales Manager

Manager, Special Projects (Finance)

Strategic Information Manager

Customer Service Supervisor

Business Banker

Finance Director - Asia Pacific AWM

Finance Manager

Commercial Accountant

Contracts Managers

Sales Support Co-ordinator

Document Controller (Master)

PURPOSE

The aim of this procedure is to clarify the process involved for Rebates from implementation through to maintenance and termination.

SCOPE

All rebates negotiated within the Hospital and Community Channels of the Healthcare Division.

INTRODUCTION

A rebate is implemented when the end user purchases S&N products through a Prime Vendor/ Wholesaler at a price agreed with S&N which is lower than the Prime Vendor/Wholesaler buy price.

DETAIL

IMPLEMENTING A REBATE

When the business need arises to implement a rebate, the process can be initiated by the Sales Executive (SE), the State Sales Manager (SSM) or the National Business Manager (NBM).

The initiator should obtain and complete the following documents from L:\Controlled Documents\Procedures\Forms:-

  • Rebate Contract Template (SF38)
  • Rebate Pricing Schedule Template (SF39)

Approval for rebate implementation must be gained from the NBM (where he/she is not the initiator) using form SF39 Rebate Pricing Submission Form. Approval for pricing should be in accordance with procedure N16 Management of Special Pricing.

The initiator may then confirm the Rebate Contract and Rebate Pricing with the customer, with copies being sent to the end customer(s) if applicable and the Prime Vendor (as appropriate). Copies are also sent to the Sales Executive, appropriate State Business Manager(SBM) and NBM. Copies of all Rebate Agreements should be retained on file by the Manager, Special Projects (Finance). All Contracts/Agreements must be reviewed by the Finance Department. (Refer Procedure F02)

The NBM must ensure that customer/product pricing is set up in BPCS under the appropriate rebate CDC by the Sales Support Co ordinator(SSC) in accordance with Procedure N16.

Refer to flowchart below.

MANAGING A REBATE

The customer will email their rebate claim to by the end of the first week of the month (as requested in the Rebate Contract Letter). This should be in an Excel electronic format.

The Business Banker (BB) scripts the claim. The SSC validates the claim and BB generates a report for sign off. Refer to S46-01 for detail.

ADDITIONS/DELETIONS TO REBATE

Once a rebate agreement is in place, products or end customers may be added to or deleted from this agreement, due to changes in contracts, tenders or pricing structure. This may be done by completion of Rebate Pricing Schedule Template (SF39), gaining the necessary approvals and forwarding to SSC to ensure that BPCS is updated. It is the responsibility of the NBM (for National rebates) and the SSM (for State rebates) to ensure that the customer is kept up to date at all times.

Once BPCS rebate reports are generated and the variance report created, this report should be reviewed and signed off by NBM, Finance Director(FD)National Sales Manager(NSM) on a monthly basis.

TERMINATION OF A REBATE

A rebate runs for a set period of timeuntil termination. The Manager, Special Projects (Finance) will notify via email the SE/SSM/NBM at the end of each quarter for rebate contracts that are due to expire within six months of the quarter end.Renegotiations will take place in the months prior to the termination date, subject to pricing review and for the agreement to continue. The NBM (for National contracts) or the SSM (for State contracts) is responsible for ensuring any termination/re-negotiation is communicated in writing to the customerwith a copy to the SSC and the Manager, Special Projects (Finance).

A rebate may be terminated prior to the termination date by agreement from both parties, eg S&N and the customer. Again this must be communicated in writing to the customer, with a copy to SSC and the Finance Department.

CONTRACTUAL REBATES

A Prime Vendor may be nominated by the State Government body, eg Queensland Health Department, for a defined list of end users. These end users are able to purchase the products on contract at contract prices from the Prime Vendor. Alternatively, a distributor may be nominated by S&N for a defined list of end users. These end users are able to purchase from the distributor the products on contract at contract price. A rebate for this difference is submitted to the SBM/SSM and approved by NBM.

If there are any changes to the contract, eg contract wins/losses, price changes, product code changes etc, the National Contracts Manager notifies the Prime Vendor/Nominated Distributor.

In addition, in NSW & QLD, as part of the contractual agreement, S&N pay a Management Fee/Rebate, of usually 1%, to the State Government body for all sales under this arrangement, including those sold through Prime Vendor/Distributor. Usage data is sent to the Contracts Manager for requestedperiods and the Management Fee/Rebate is paid on a regular basisas per contractual agreement eg every month/every 6 months. Refer to work instructions S01-05, S01-06 and S01-07 for full details.

DOCUMENTS

Form SF38 Rebate Contract Template

Form SF39 Rebate Pricing Schedule Template/Usage Sheet

Procedure N16 Management of Special Pricing

Procedure F02 Contract Management

Work Instructions S01-05QLD Sales Analysis Reports Rebate

S01-06 NSW Sales Analysis Reports Rebate

S46-01 Rebates-Producing Invalid Institution & Variance Reports

End of Document

CONTROLLED COPY HELD AT L:\CONTROLLED DOCS – HARD COPIES ARE UNCONTROLLEDPage 1 of 5