Rebates

True-up

The adjustment booked when a rebate settles at a different amount from what was accrued.

A true-up is not a failure in itself — some variance is inevitable. The question is magnitude. A programme accruing from transaction detail settles within a couple of percent; a programme accruing from an estimated rate routinely settles 10–30% away, which means the number the business planned against was materially wrong for several quarters.

Large true-ups also concentrate: they land in one period, usually at year end, distorting a period that had nothing to do with the activity that caused them.

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