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The Inconvenient Truth About Managing Pricing in Spreadsheets

Tue, Sep 12, 2017

As businesses grow pricing generally becomes more complex. There are usually more products and prices as a result but there are also more customers and more exceptions as to who gets what price and when.

Then, inevitably there are trade promotions with various types of discounting. With all that complexity managing revenue and trade promotions becomes a much more involved task.

This task is magnified if you use spreadsheets to maintain pricing and are transferring those prices into your Customer Relationship Management (CRM) system. The uncomfortable truth about managing pricing this way is that the problems are invisible until the impact appears on your bottom line. 

Here’s what makes managing pricing in spreadsheets difficult…

Hard coded prices causing inaccurate pricing

An individual cell in a spreadsheet can either draw the information it contains from user input or a formula that uses data from other cells or simply contain a number that you enter when creating the spreadsheet. This last option is hard coding. When you use hard coding, the result of the calculation does not change. This can cause the information to become inaccurate.

This means that when you transfer pricing into your CRM, the inaccuracies go with it.  

The need for data dumps to update pricing

In today’s fast moving business environment, the need for pricing updates to be instant is enormous. With the likes of Amazon updating their pricing several times a day, you can no longer afford to update pricing periodically. Performing data dumps as necessary means your pricing will lag and be more prone to manual updates.

Difficulty managing complex pricing scenarios

Do you have different pricing rules for different customers? Or a bigger discount if a customer orders online instead of over the phone?

As your business grows, this will become difficult to manage with spreadsheets. Without the flexibility to manage more complex pricing, you’ll find it harder and harder to remain competitive with your pricing.      

Little control or monitoring discounts offered

With your Sales team needing prices and discounts to be manually entered, you’ll have little to no control over the discount amount and who it is offered to. Your Sales teams is focused on selling and may not know of the potential impact discounts can have on your bottom line. If a discount is offered that takes it below the cost price, effects on your margins will only be felt once it’s visible after the fact.

Too much time spent on the quote process

Another reason to explore a new way to maintain your pricing is the significant time taken to respond to price inquires and issues that have occurred due to the points above. Trying to uncover where and how the pricing error occurred takes time away from your Sales team when they could be selling.      

By maintaining pricing in spreadsheets, it also takes more time for your Sales team to provide an accurate quote through the CRM to a customer. If your ERP does not calculate any taxes until after the sales order is submitted, there is increased danger that the price won’t match with what the customer was quoted.

If all these inconvenient truths are ringing true, it really is time to check out alternative solutions for managing your pricing (instead of spreadsheet chaos).

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