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Checklist: 5 things to look for in a rebate management system

Posted by Lauren Sidhu on July 11, 2019 14:00:00


While spreadsheets are undeniably easy to use, widely available and highly adaptable much has been written about the danger of using them in contexts where there is just too much information, or where that information is too important to risk to human error. A prime candidate is the case of rebates: both customer rebates and supplier rebates, where even the smallest error can result in losses of tens or hundreds of thousands of dollars. Since spreadsheets are so easy to use it is also easy to make mistakes, to change data, make errors and worse, not spot the errors and carry on with business as usual. The result is that incorrect information can cause issues when you are trying to understand your business’s financial position down the line.

Spreadsheets are dangerous: so it’s time to go beyond them

A while ago we shared a blog post about Excel errors: why spreadsheets are so dangerous for rebate accounting that goes into detail about the various challenges facing those who have simply outgrown the ability of spreadsheets to manage their complex, confidential calculations.

More recently we held a webinar that looked beyond these challenges to a solution, concluding with a checklist for selecting the ideal rebate management system. This blog post speaks to the question: What should I look for in a rebate management software solution?

Click here to watch an on demand version of the webinar.

  • Complexity vs. up-to-date financial figures

The challenge

While you can set up complex calculations in spreadsheets, that is also one of their dangers. One of our customers found that changing anything in their already complex spreadsheet was incredibly stressful. “They compared it to performing surgery, as you have the fear that your scalpel might accidentally cut something unintended”, says Heline Deconinck, Client Services Manager.  As the anatomy of the spreadsheet becomes more and more complex the risk increases.

Additionally, since it’s difficult to see a spreadsheet in real-time (Google sheets does its best, but the lag while it struggles with very complex calculations makes it almost unusable at times), the results from spreadsheets are out of date almost as soon as you export them. 

The solution

A good rebate management system really needs to show you up-to-date financial figures. When those figures are in an easy-to-read dashboard with drill-down capabilities, so much the better! Ideally, both parties should be able to see the results in real-time as well. That gives full visibility to suppliers, resellers and distributors – as appropriate – which not only improves accuracy, but also engenders trust.

  • Auditability

The challenge

Spreadsheets generally don’t provide an audit trail. So while some deals are misrepresented on spreadsheets, another significant issue is that some deals don’t make it onto the spreadsheet at all. This was a big issue for a large distributor in the UK with multiple divisions and ERP systems which made the whole process of tracking rebates via spreadsheets nigh-on-impossible.

The solution

Since moving implementing DealTrack, that same distributor has uncovered over £2m worth of additional rebates from their vendors in the first year alone! The advice here is to implement a system that is easy to use, but forces all parties involved in a rebate negotiation to document information. And look for auditability when you’re selecting your rebate management system, to ensure that it’s possible to track who put what information in, when.

  • Collaboration

The challenge

People can be very protective of their spreadsheets. “Due to the nature of spreadsheets, they are usually owned by one person and we have seen on many occasions that spreadsheets are kept on a personal laptop,” says Zoe Cooke, Commercial Manager at Enable. Apart from the risk of data loss, this also creates high dependence on these key individuals who keep much of the information about how the spreadsheets are configured in their heads. This should be of huge concern to any business who knows that these key individuals could leave, potentially without any notice.

The solution

Business continuity is often a key driver for moving away from spreadsheets so that organizations can remove the dependency on these key people. “You also don’t want a one-person solution” says Zoe. “You have to make sure that your solution supports people internally and also external parties, if possible.” Good customer rebate management software does this by default.

  • Translating deals from commercial to finance teams and transparency

The challenge

Commercial teams are out in the field, agreeing rebate deals, and they pass the information onto finance teams to enter onto a spreadsheet and you get a mis-match between what has been agreed and what has been calculated and there’s a bit of guesswork. For example, Heline shares an instance she came across when she was running through a customer’s current rebate process with both commercial and finance teams in the same room, “They realised they had misunderstood which branches were included in a deal and they had only been claiming half the rebate!” In this case the disconnect led to missed rebate. In other instances it can result in an over accrual, which is arguably even worse.

The solution

Excel is a one-person solution, not a company solution. The information contained within spreadsheets usually needs to be shared and used by multiple people. Transparency is key. A good rebate management system will enable you to have that transparency so everyone can see what has been agreed and what has been calculated.

  • Ease-of-use

The challenge

The fact that spreadsheets are so easy to use and so ubiquitous is both their blessing and their curse. Often information is recorded and maintained in a number of spreadsheets with no automatic feeds into each other. Spreadsheets usually have to be manually reconciled and manipulated to produce various reports at all levels in the organization. This means monitoring and auditing is limited due to the large amount of work that would be involved. Spreadsheets also tend to be slow and when there is an error with a calculation it can be challenging to work out why the error occurred in the first place. It often results in having to rerun a report multiple times, which can take many hours if not days.

The solution

Since spreadsheets are easy to use, when you move to an automated solution pick one that is also easy to use. One of the key things you should also check is whether calculations can be automatically run in the background, so that the earnings are waiting for you when you need them. It’s also good if you involve your end-users earlier on. It makes them feel part of the selection process, you get great feedback on the usability and functionality and you’ll see a lot fewer issues when you move on to using the system.

Next steps: find out how rebate management software can help you

While this thorough blog post has covered a lot of the concerns of managing deals with spreadsheets and the potential solution – deal management software – it’s just a fraction of the information and insight we shared on the webinar. Watch the 30 minute webinar on demand to get the full story and you can find out why manual rebate systems are like fighting blindfolded.

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Topics: Rebate Management, Rebate Management System