Managing Rebates on Excel – Welcome to the 90’s
By Nayan KurupIf you’re a business or a SAP user managing customer / supplier rebates through excel files, this article talks about why you should migrate to automated solutions to manage rebates. The current day SAP integrated rebate management solutions allow you to manage, track, accrue and settle rebates by using user-friendly applications that require no prior knowledge or training of SAP. These solutions are fully integrated with SAP and are deployed on your server or your cloud platform to avoid exposing data to external entities and systems.
( More details on Cassini’s Rebate Management Solution for SAP could be found here )
Managing Rebates, The Excel Way:
The process of recording various rebate methods applied to a product / product hierarchy -or customer / vendor / hierarchy of customers –with the rebate agreement as a basis is called rebate management. A periodic accrual is made after tracking each sale or purchase against the rebate agreement, which then gets paid or claimed. Rebate management is a key focus involved in providing rebates to customers or claiming rebates from vendors.
Managing rebates is a tiresome task especially when businesses use old fashioned methods for rebate management using excel sheets. With the development of technology, rebate management has become easier, efficient and error free.
Rebate can be defined as an amount paid to the customer by way of return, refund or reduction on what the customer has already paid when purchased a product or service. This is a traditional business strategy practiced by businesses to keep the customers returning to purchase. Unlike discount which is a reduction in price, rebate is a refund on what the customers have already paid.
Rebate is a familiar word for all who run businesses. At the same time, ironically, businesses are still struggling to find an effective rebate management solution. Traditional ways of managing rebates are outdated and not fit for the modern fast-paced technological era. You end up either paying more rebates to your customers than sales made or claiming less rebates from your suppliers for purchases done if you’re managing rebates on excel files.
Disadvantages of using excel to manage rebate
‘When in Rome, do as the Romans do’. Businesses that are not migrating to advanced technologies to run their processes are at a verge of getting outmoded. Get involved with new technology or get left behind your competitors is the new policy of the modern technology driven business world. Apart from this disadvantage, there are a lot of problems that businesses face while using excel sheets to manage rebates.
Excel will not work, when complexity levels are high
The main problem with managing rebates in excel spreadsheets is the cost and time needed to enter data and update it every now and then. Due to this issue, businesses are likely to roll over rebates to the next month. It is dangerous to roll over rebates to next month or year without checking the effectiveness of it. It causes the customers to establish an expectation that their rebate stand indefinitely and you become reluctant to roll it back due to fear of losing the customer volume. In this situation, rebate management could be handled better with a solution supported by advanced technology.
Lack of control and security
Excel program will run slowly if the data file is very large, especially when all the data is stored in one file. There are also chances for some of it being misplaced or lost, when trying to break down larger files of data into smaller files. As it is not a user-friendly platform, using imprecise calculations, excel rounds off very large numbers, which compromises accuracy.
Being a standalone application, it is not possible to get fully integrated with various other business systems. There is a constant risk of errors each time when employees make changes in excel manually, which affects the accuracy. These mistakes can affect the whole business processes, even the bottom line.
Excel is vulnerable to corruption or fraud
There is a history of fraudulent manipulations of excel sheets in various companies that have resulted in losses worth millions. Inherent lack of controls is the major reason behind the spreadsheet vulnerability, which makes it very easy to alter values, formulas, or dependencies, leaving no change trail.
Excel is difficult to troubleshoot or test
Testing cannot be done with spreadsheets. It is common in excel that interrelated spreadsheet data are scattered across various workstations, geographical locations, offices and folders. Even if pinpointing locations of related files is possible, it is a very time-consuming task to trace relation between formulas in one cell to another. A very similar problem can occur, when trying to troubleshoot questionable data.
Spread sheets get too big, when businesses are acquired
Accounting of rebate becomes very complex, when businesses are acquired. In this situation, people go for rebate management software as the data in their rebate account management spreadsheet is too much and not manageable any more.
Auditors hate spreadsheets
Auditors are not big fans of spreadsheets and undocumented processes. They always demand for a system to effectively handle the collection of millions of dollars as they are aware that spreadsheets are not adequate enough to do it successfully. They are always in need and suggest a rebate management solution to handle it.
Due to all these dangers of handling rebate management using excel, its high time for businesses to go for a better and advanced technology-based option to efficiently perform rebate management. Robustness of processes, security of data and key person dependency are the major drivers that make businesses move to automated solutions to manage rebate.
Benefits of Using Technology to Manage Rebates
Rebate management solutions allow you to create, manage and track rebates efficiently
They allow businesses to track performance and negotiate better.
Rebate management solutions are fully compliant
No matter what problem you encounter with rebate management, there is always a solution with technology.
Due to automation processes in rebate management solutions, they are easy to use and more efficient.
Minimal disputes and faster identification of causes of disputes
Solving disputes faster with accurate audit trails
Cash flow is improved due to accurate and timely rebate claims.
More accurate pricing and rebate calculation improve margin.
Better supplier collaboration is possible with technological solutions, which improve growth and profitability
Is your existing process of rebate management holding your business back? If you have the will to manage rebates efficiently, you must start managing rebates using modern technology without a hesitation.
Regardless of the industry, rebate management has to be a key focus. In order to accelerate the process, businesses have to start by using a solution that can manage rebate efficiently. Examples from history say that over confidence in old fashioned ways of handling rebate management can put businesses in utter chaos. We hope this article reaches you as a timely alert.
Our team at Cassini would be glad to guide you on how to use technology to manage rebates better. Drop us an email on support@cassinitech.com to schedule a call.
We have built customer and vendor rebate applications that fully integrate with SAP and help you manage rebates better. These solutions are installed on your cloud-platform or on your SAP system. Since the data does not leave your firewall, this solution is 100% safe and secure to use.
Drop us an email on support@cassinitech.com to schedule a demo session with the team.
Read more about the detailed end-to-end process of Rebate Management here.
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