How rebate estimates (OTE) are calculated

Alongside actual figures, every rebate line carries estimated values — OTE ("on-target earnings") value, throughput, and payable — projecting what the period will look like once complete. This page explains where those numbers come from and why they rarely match a simple average.

How it calculates

For each period, the engine checks how far through the period the actual figures go (the last date turnover was entered):

• Period already complete — the estimate simply equals the actuals.
• Period still running, no seasonality profile — the engine takes the average monthly turnover from the months that have figures, multiplies by the period length, then applies a 95% factor: estimate = monthly average × period months × 0.95. The deliberate 5% haircut keeps estimates conservative.
• Period still running, deal has a seasonality profile — actual turnover to date is kept as-is, and each remaining month is estimated as the monthly average scaled by that month's seasonal factor. No 95% factor is applied on this path.

The estimated turnover then flows through the element's normal rules — banding, growth percentages, modifiers, output types — to produce the estimated rebate. Band selection uses the estimated turnover, so an estimate can sit in a different band than actuals-to-date.

Example. Annual stepped element, band at £120,000 → 1.5%, else 1%. Four months of figures total £48,000 (average £12,000/month). Estimate = £12,000 × 12 × 0.95 = £136,800 → the estimate uses the 1.5% band even though actuals are still at 1%.

Estimates refresh on every projection run — which happens automatically after each live calculation — and a line whose period extends past the last figures date is flagged as a mix of actual and projected.

Why do estimates change unexpectedly?

• A new month of figures moved the monthly average — every remaining month's estimate moves with it.
• The estimate crossed a band boundary, changing the estimated rate as well as the estimated turnover.
• A seasonality profile was added or removed from the deal, switching between the 95%-average method and the seasonal method.
• Turnover arrived late in a period: the average was being computed over fewer months than had actually elapsed.

What an OTE estimate is not

• It is not a projection line — projections are a separate run against projected turnover; OTE columns on live lines are refreshed from them.
• It is not a commitment — nothing is payable from an estimate; payables come only from actual turnover.
• It is not a straight-line forecast — the 95% factor or seasonal factors mean it will not equal average × months.