How to reduce human error in rebate management
When it comes to the complexities of rebate management and B2B negotiations, human errors can creep in and seriously compromise the value of trading agreements, especially when the process is manual. Human errors tend to create additional costs, reduce efficiency, and cause catastrophic failures.
There is no simple answer to completely reducing human errors but businesses that utilize the latest technology and processes correctly can take steps to reduce the likelihood and severity of mistakes that would harm their bottom line.
What is human error?
Human error is an unintentional mistake made by a person and as humans, we are prone to making mistakes, it’s in our nature. These can happen in everyday life but also in the workplace where every department requires some element of human touch. These tasks can vary from keying in amounts in a spreadsheet, addressing a letter, or writing down an agenda for example. While these may seem like small things, they can result in damaging effects for a business.
Human error can be caused by employees trying to take shortcuts or simply overlooking details. It can happen just as easily with an experienced member of staff who isn’t fully focused as it can with a new employee who isn’t familiar with the IT software.
Take Amazon, for example. In early 2017, Amazon Web Services went down for 4 hours due to an employee who was meant to take a small number of servers offline but accidentally entered a command incorrectly and removed a large number of servers instead. This human error cost S&P 500 companies $150 million and US financial-service companies $160 million in lost revenue.
Common causes of human error
Human errors can be caused by anything from carrying out the task incorrectly, having a lack of concentration and training, or the task is beyond the physical or mental ability of the person asked to perform it. You often find as well that human errors are potentially more common with experienced people, as they tend to be overly certain of their expertise and actions to the point where it’s easy to perform an action incorrectly without thinking about it.
If certain tasks are repetitive, they can become difficult to concentrate on, leading to attention failures in the workplace and of course human error. Similarly, multitasking can also be fatal as, in an effort to complete more tasks during the day, an employee may try to do several things at once, this is where you shouldn’t be afraid to ask for help.
Another cause of human errors is when employees are using broken processes because then they have been set up to fail, this results in mistakes that can take time, effort, and money to fix. An example of this is using spreadsheets to manage your rebates.
Poor communication can cause several problems because information can become outdated, employees aren’t on the same page, and expectations and deliverables can be unclear. As humans we find the more information and direction we get regarding tasks, the more likely it is that we can complete them to a high standard.
Reducing human error in rebate management
- Communicate more effectively to reduce human errors
Proper communication is among the most important elements in a good trading partner relationship. In rebate management, if one person fails to relay vital information or does not make a proper note of it, the entire process can become compromised. To reduce human errors try to develop close relationships with your suppliers, either in person or via a collaboration platform there is a better understanding of the deals as a whole.
- Ditch the spreadsheets to reduce human errors
An estimated 88% of spreadsheets include mistakes and at Enable we have found time and time again, why spreadsheets are so dangerous for rebate accounting. Because spreadsheets are created by a human, they are of course prone to human errors. Once they become complex with lots of different rebate types they can become out of control and reliant on that one person. Plus, if the spreadsheet is not backed up properly you could lose everything with the click of a button. Try to research alternative solutions like Enable to reduce human errors.
- Don’t rush through the negotiating process
It doesn’t matter how much preparation you put into the first draft of a trading agreement; additional contract negotiation is inevitable. This is when they are most prone to human errors and miscommunication. Both trading partners will rush to update terms in real-time which causes confusion and disorganization. Ineffective management of contracts costs businesses more than $153 billion per year according to Aberdeen Group Research. Instead take your time, therefore reducing the change of human errors.
- Back up all your rebate data
A report highlighted by PC World revealed that 75% of data loss is caused by human error reiterating the importance of backing up your data. For example, somebody in your team could delete an important spreadsheet full of your rebate calculations when they’re trying to move that data to a different location on the server or even email it to another member of their team. Even though back-ups can be unintentionally deleted and modified just like their original counterparts, it’s good to keep spares of the same data, just make sure you keep them in different places to reduce human errors.
- Proper training of employees
Educating and training employees, tailored to their job-specific roles, is vital for improving overall workplace competency and reducing human error. This is especially important for employees dealing with critical rebate data and rebate management software. Always ensure your employees understand how the processes for managing rebates work within your company and how your backup systems function. This can be as simple as knowing if the documents they are working with will be backed up automatically or if they must manually save files while they are working.
Automate your rebate management with Enable
Automation helps businesses to implement correct and consistent workflows for better rebate management, significantly improve your company’s compliance, audit trail, and productivity plus reduce human errors. Once a workflow has been automated, the system will carry it out consistently, therefore no rebate data errors should occur. The flexibility of automation lies in the ability to implement the right processes in the right way and then letting the platform take over.
By automating your manual rebate processes, you are letting technology do what it does best, and you’ll find that it calculates your data a lot more quickly than any human can. This can free your employees to focus on tasks that require more intelligence than a computer, helping businesses to reduce spending on staff for repetitive administrative and data entry tasks.