Businesses managing complex rebates and deals often do not realize how crucial the software they use is to company expansion and increased rebate revenue. What was most likely the best fit for your business when you first started out, may not be the right choice to fuel the next stage of your company’s growth - especially when the scale of your business processes increases dramatically!
One of these pieces of software is Excel spreadsheets, which according to Forrester Research is used by 81% of businesses and has 750 million users worldwide. Many of us use spreadsheets daily because they are inexpensive to create, highly flexible, mostly easy to use and very easy to share. However, spreadsheets have their downsides.
A continued reliance on Excel spreadsheets causes inefficient manual processes, high operational costs, greater risk of errors, and limitations to your rebate revenue potential. Below we’ll share in more detail the many disadvantages of using spreadsheets for accounting and the various ways they are used in the rebate world. Plus, why an automated rebate management system is a more secure, efficient and safer option for your business going forward.
1. Lack of collaboration
Given that Excel spreadsheets are a single file, only one person can access and edit the data at any given time. Without emailing a copy to your colleague it can be difficult to work collaboratively with other departments when using spreadsheets.
In the rebate world, the data housed within these Excel spreadsheets often needs to be shared and proofed amongst various teams and departments, users have to be diligent about version control and sharing when changes have been made to ensure everyone is viewing the active version. In some cases, recipients can end up being sent the wrong version which can lead to errors in rebate calculations and accruals along with time being wasted. Another huge risk when trying to use spreadsheets collaboratively is that if someone saves over your work in Dropbox for example it can be difficult to retrieve or trace.
Alternatively, with a rebate management system, collaboration is easy. Multiple members of your team can look at the most up-to-date rebate data simultaneously, give feedback and have confidence that the calculations are correct, meaning no missed rebate revenue.
2. Vulnerable to costly human errors
Another disadvantage of spreadsheets that can cause a considerable loss to the bottom line and damage the confidence of investors or other stakeholders is human errors. It’s estimated that 9 out of 10 spreadsheets contain human errors from lack of version control, manually entering data wrong, copy and paste errors, and entry over-writes.
Accuracy is difficult, as with any manual process (especially concerning a large quantity of complex data), there is always a greater chance of human error than with an automated process. Excel doesn’t allow users to easily validate their data and it can be challenging to spot and correct errors. However, by transitioning to a rebate management software system that automatically calculates your rebates for you, you can make Excel errors a thing of the past.
3. Manual process
As businesses evolve and new B2B relationships are formed, the amount of rebate data you need to review, analyze and exchange will expand. Businesses rely on accurate rebate data and reporting to make informed business decisions and accurately state their financial position to stakeholders and auditors. A business cannot grow or make decisions with the wrong rebate data.
When using Excel spreadsheets, the only way to validate your data is to ensure that you manually double check and re-enter any incorrect information. This is a very time-consuming and labour-intensive exercise leading to slow decision-making and reduced cash flow. You may find that as your spreadsheet rows and columns grow, the amount of time that people spend scrutinising them decreases as the volume of data can be demoralizing.
All too often, Excel spreadsheets slow people down and hurt their accuracy by requiring individuals to manually perform repetitive tasks that could be streamlined and/or automated with rebate management software.
4. Unable to make quick decisions about your deals
In a spreadsheet-based environment, extracting rebate data and contracts from different departments, consolidating them, and summarizing the information so that it could aid the company in making profitable deals can be very time consuming. Because one of the many disadvantages of spreadsheets is them being prone to errors, everyone involved in processing the information has to be extremely careful to keep the reliability of the data intact. Hence it is always wise to double check the data as much as possible which (whilst necessary) can further delay the process! So, when the final information arrives in the hands of the top decision maker, they may not have much time to review the deal in detail before the terms need to be signed off.
5. Lack of version control
The sharing of Excel spreadsheets from team to team can cause issues with the version of the data and the validity of it. This can cause additional stress on teams and management as they are making important business decisions based on static data that could be riddled with errors. You need to ask yourself who accessed the data last? Who did what and when to the spreadsheet? Can you fully confirm the calculations are correct? If you can’t trust the answers, then you may need to go back to the start all over again.
6. Dependant on one person
As we’ve said Excel spreadsheets are prone to many errors and the main reason behind this is because many people have access to it, and they update it as per their knowledge. It is quite possible that one employee who has the most up to date knowledge, will update the spreadsheet data but then it is changed by another employee who thinks they have more knowledge than the other. There is not always a way of finding out who made the changes so the Excel spreadsheet is not only inaccurate, but it can be harmful to your business decisions and profitability.
7. Unfit for remote working
We’re now in an age when major changes are reshaping the business landscape, the most recent example being the COVID pandemic which has forced many people who manage and calculate their rebates to now do this remotely from home. Many people who used to collaborate in the same office space are now having to rely on email and video conferencing, delaying the process of obtaining key information about your deals. Working remotely could also cause people to keep their version of a spreadsheet saved on their desktop, not filed in the correct place whereas with cloud-based rebate management software this is accessible by anyone, anywhere, anytime.
8. Time consuming
Research from Ventana indicates that Excel spreadsheet users spend on average 12 -18 hours per month updating, revising, consolidating, modifying, and correcting Excel spreadsheets. The fact that different Excel spreadsheets aren’t connected can lead to isolated information, especially if they are being emailed around for updates. Valuable time is often wasted trying to keep the spreadsheets up to date. It is difficult to keep your date in sync as there is no audit trail and often more than one person has access to the file. By using a centralised rebate management system, where data is stored and shared among the team, you can access vital rebate data and therefore have complete transparency of their deals.
9. The data is not updated in real-time
As Excel spreadsheets don’t update in real-time whenever the status of a deal changes, every change requires a human input. The fact that Excel spreadsheets are not easy to update means that they tend to be updated at the end of the day or every few days. Usually, this means that paper records are kept daily and then manually entered to update the Excel spreadsheet at a later point in time. Not only is this duplication of effort, but it also increases the chance of the data being entered incorrectly or decisions being made on out of date information. All because the management of Excel spreadsheets can be tasking.
10. Chance of data getting deleted or lost
It is very common for Excel spreadsheets not to be saved in a single location, either because the spreadsheet owner isn’t familiar with the best practices for data storage and back-up or they prefer to have it saved on their desktop. So, in the instance of a major technical issue, there would be no guarantee of full data recovery, meaning all your important data is lost.
In conclusion, Excel spreadsheets are not going anywhere fast but it’s beneficial to look at all your options when managing complex rebates. A rebate management system can:
• Streamline your processes so you can rely less on Excel spreadsheets
• Moving toward a single version of the truth
• Creating an environment where people can collaborate
• Recover any missed rebate revenue
• Reduce the likelihood of errors
Plus, much more! Find out with a free demo.