The dark side of spreadsheets for managing rebates

The dark side of spreadsheets for managing rebates

With halloween approaching, we want to welcome you to the dark side of managing rebates and how inaccurate accounting for rebates can have serious consequences. Having switched many of our customers all over the world from mind-numbing spreadsheets to automated rebate management we have seen many common themes. Spreadsheets have a lack of audit control and collaboration, error prone, hard to consolidate and 4% of rebate revenue is going unclaimed. Fortunately our customers have lived to tell the tale of their spreadsheets disasters and so can you with the help of Enable.

AD - Brett Carey, Business Systems Manager

In 2013, responsibility for calculating and paying member rebates lay with AD’s divisional operations (DivOps) team, which consisted of just four people. This team managed the relationship with all of the group’s supplier partners—tracking, claiming and collecting rebate from them to distribute to AD’s members.

This involved setting up each individual agreement in Excel and collecting each distributor’s purchases figures in order to calculate rebate due in from the supplier and out to the distributor. This information was then manually inputted into AD’s Lawson (now Infor) financial management software.

By 2013, this manual approach was no longer viable. If the group was to continue to grow, it needed an automated rebate management solution that could scale as the group’s membership and supplier base continued to expand.

Mark Gilham, Finance Director – Grafton Group PLC

"Previously, our trading agreements were produced in a Microsoft Excel environment which allowed for inconsistency of output depending on who was managing the deal. The signed trading agreements were not automatically loaded into their previous rebate portal so consequently it was possible that someone would forget to upload a deal meaning that other stakeholders could not find it when they needed to. This meant precious time was lost and they were limited in their ability to restrict access to their deals which could have therefore potentially revealed a lot of sensitive information. Also, the trading agreements that had been signed by hand and then scanned would often suffer from poor image quality and were not always legible".

Gilham continues, “we would spend days preparing calculations and integrating them into reports whereas now, with an integrated system, we can use automated calculations, review the figures, interpret them, and provide a narrative to the business on both past and future potential earnings. That is what a modern finance function should be doing—supporting leadership with forward-looking intelligence to facilitate improved decision making.”

Scott Ferguson, Vice President, United Aqua Group

“Were we struggling with manual processing and having to use Excel spreadsheets for everything? Yes indeed. So, when you are working with as many vendors as we are, about 265. And you are trying to receive and process and analyze spreadsheets from each and every one of them and then compare them to our own purchase records and our own systems, that is a recipe for, if not disaster, I would say frustration”.

Scott continues, “It’s just a tremendous amount of work and processing and manual effort and plugging in formulas and making calculations and checking one thing against another. So that kind of activity strikes me as something that a crazy person would choose to do, because they really don’t want to enjoy their work life at all”.

Denys Shortt OBE, Founder & CEO DCS Group (UK) LTD

Complex retrospective payment deals are applicable across all product lines, varying from supplier to supplier. As a result, tracking and realizing the revenue from such deals can be a difficult task, yet crucial to the profitable running of this highly successful and innovative business. Using spreadsheets to track all these deals posed an increasing risk of lost revenue and disruption to valued suppliers.

DCS believed that automating the procedure would enhance its business model and ensure the maximum possible income could be generated from each supplier deal. With a central, automated system DCS would be able to reduce risk, manage contracts more effectively and invoice more quickly. In many ways it was a no-brainer for the leading distributor.

Bob Gay, Manager of Customer Profitability and Rebates, Advance Auto Parts

"I helped manage anywhere from 18 to 22 separate spreadsheets, many with nearly 100,000 lines and 50 columns of data detailing the terms and conditions of varying agreements. The more rebate programs we had, the more complex and unwieldly they became, making it difficult to reimburse partners in a timely and accurate manner.”

Matt Freedman, Director of Finance, General Plumbing Supply

“Rebates can play a very large role in the profitability of the business. As I built out our forecasting capabilities, I realized that rebates were a major blind spot. The major frustration I had is that I couldn’t feel confident about our forecasts for rebates putting their accuracy and reliability at risk. I wanted to know when rebates are actually earned. Based on the way we were previously managing them it wasn’t capturing that accurately".

General plumbing supply realized that without a solution they were owed a rebate of $500,000 that they did not receive.

Amanda Barnard, Systems Coordinator, Unitas Wholesale

“There was a small team in the finance department manually processing the rebates using masses of spreadsheets to key in the figures. Forecasting and reporting was slow and inaccurate. As a result, rebate thresholds and business opportunities were all too often missed”.

Scott Weir, VP Purchasing, Thos Somerville

“With us relying on manual processes, there was an impending need to transfer 20+ years of specialist knowledge to more employees,” says Scott Weir, VP of Purchasing at Thos. Somerville Co. “Enable will drastically reduce the amount of training required and allow this process to be managed intuitively going forward.”

James Klotz, Sr. Vice President Global Sourcing & Supply, Douglas Dynamics

“We’ve previously managed everything in Excel spreadsheets, which isn’t the best way of doing things, particularly as we’ve grown through acquisitions and added divisions. Now it’s a lot of moving pieces to keep track of in an Excel document. That prompted us to look for solutions that would help us better organize rebates, as well as, being able to make sure we’re tracking those agreements to what was originally proposed both in terms of timing of payout and eligibility of sales.”

Want to make spreadsheets a thing of the past? Get in touch to see how Enable can help.

Elizabeth Lavelle

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