Death by Spreadsheet: 6 Reasons Your Manual Quoting Process Is Destroying Profit Margins
Picture this. Your competitors are already there. Your job has been to reconcile pricing spreadsheets from three different teams, leading you to miss the deadline to submit your quote. Your competitors, who used technology that immediately pulled and calculated the data, submitted the quote yesterday, locked in the client, and already moved on to the next opportunity. Welcome to the real-world state of quoting in manufacturing.
Fact: quoting is bleeding your business dry. In the latest industry research, 86% of manufacturers reported losing deals due to slow or manual quoting processes. And the average mid-sized manufacturer loses around 5% of annual revenue through quoting inefficiencies alone. This is approximately £2 million per year. Manufacturers already operate with tight profit margins. Average manufacturers take home 1–3% profit margin on most sales. Suppliers often achieve around 5–6% average profit margins. When the excess caused by inefficient quoting eats away at margins 20-35% of your spend in unmanaged tail spend is effectively sucking oxygen from your business.
Fact: Spreadsheets, that same productivity super-tool that once unleashed digital transformation for business 20 years ago, is the weapon of choice slowly driving companies out of business through time and labor cost leakage. Case studies, reports and white papers from independent industry research sources demonstrate that:
- 94% of spreadsheets contain errors
- 90% of spreadsheets over 150 rows contain errors
- Half of all spreadsheet models used in mid-sized and large businesses have material defects
And yet manual quoting remains the status quo for too many manufacturers as they unknowingly systematically sabotage competitiveness with every RFQ response.
Fact: The true costs of manual quoting far outweigh the immediately visible, time hunched over Excel formulas, late nights chasing pricing, or self-inflicted embarrassment sending incorrect quotes to clients. Lost opportunities, squeezed margins, burning-out teams, and customers who go to competitors faster than you add up. If procurement spend management is the weak link in your company losing 20–35% of spend as unmanaged tail spend, you already know there is 20–35% of spend waiting to be managed. Even conservative numbers will find manual quoting processes working with error rates in the 5–10% range, that’s millions of pounds a year just waiting for you to pluck them out of the bidding black hole.
Reason 1: The Labor Time Black Hole – Where Skilled Workers Disappear
Manual quoting is often the hardest thing to visualize. It’s invisible. Quiet. The still point of the turning sales. But it’s where valuable employees who previously helped secure the deal disappear into an elaborate version of manufacturing cost accounting paid to the customer.
The Real Cost of Manual Processing
The sheer amount of manual labor – processing a single complex order, can take weeks in manufacturing quoting contexts. This quote labor time is often consumed by some of the most valuable operators in the company.
Complex order manufacturing quoting professionals often require an inordinate amount of time and support from some of the highest paid professionals in your company. Sales teams, engineers, estimators, and purchasing managers pass manufacturing data back and forth in a convoluted version of modern product design using spreadsheets, manual emails, and even phone calls. For freight forwarders struggling with the same problem, entire teams spend up to three hours per quote finding rates in spreadsheets, emails, and PDF files.
One study of estimators working on manual RFQ processes suggests professionals can spend up to eight hours per bid cross-referencing information across documents. If you do the math and see mid-market freight forwarders process an average of 50 quote requests a day, or construction contractors report similar volumes of quotes per month. Multiply those hours by volumes and an industry analysis of manual claim processing alone added £50,000 to £85,000 in indirect labour costs per year.
Multiply this by how long a senior estimator has been in the field. When these tasks are not done by junior administrative assistants, they are being done by estimators, engineers, sales professionals with years of experience and expertise. Senior level professionals and experienced engineers who have learned how to work across systems are now forced into an assembly line workflow to spend hours checking data and information between documents, copying and pasting information, and doing low-value labor to mitigate the human error that came from using spreadsheets. This is a critical misallocation of human capital.
The Opportunity Cost Crisis
Manual quoting doesn’t just slow one deal per week. It drags down your entire sales process. That is, every hour spent fixing errors, double-checking pricing, and chasing sign-offs represents an hour NOT spent in the field driving sales and growing the pipeline. One example from air freight industry case studies suggest being second to quote costs the company over £2.1 million in annual gross margin for mid-market forwarders.
Opportunity costs present in numerous ways:
* Lost revenue from late responses
* Reduced overall sales velocity
* Reduced customer satisfaction from slow responses
* Lower retention due to slow responses
* High churn sales teams from burnout on admin tasks
Manual rate management systems slow quoting processes down by as much as three days and require up to 43% of sales executives time and capacity on these processes.
The Retirement Crisis Accelerates The Problem
Intensive time demands from manual quoting are exacerbated by an experienced quoting professional pool in middle management retiring in droves. This does not just create an urgent need to reduce the hours and personnel required to support quoting. This creates an entirely new need to design and build solutions that will capture hard-won tacit knowledge that is on a trajectory to disappear alongside experienced human experts.
Manual quoting processes are by necessity manual processes. This means they are often reliant on personal rules of thumb and proprietary knowledge, spreadsheets, and spreadsheets and spreadsheets of industry expertise. They include the tacit knowledge needed to spot manufacturability issues early in the design process, provided to the customer for free by employees as they learn to develop intuition around what doesn’t work.
It is a slow drip, drip, drip of productivity death by a thousand cuts until this tribal knowledge hands walks out the door, and the organization is left with a productivity issue that is more existential.
Reason 2: The 94% Problem – When Spreadsheets Become Financial Weapons
If you use spreadsheets for financial planning, estimating, or cost management, let me ask you a question: how many of your spreadsheets are guaranteed error-free? If you answered “all”…congratulations, you are the 6% club, as in 6% of users worldwide. If you answered “I don’t know” the numbers probably don’t look great. The numbers don’t lie: 94% of spreadsheets in use contain faults. 94%! The bad news is confirmed by decades of repeated studies.
The Anatomy of Spreadsheet Disaster
The errors aren’t small. Half of all spreadsheet models used by mid-sized and large businesses contain material defects. Errors that meaningfully affect financial decision-making. Almost a quarter of spreadsheets using formulas contain mathematical errors directly in the calculation. Average data entry error rate is around 1%.
In quoting systems with thousands of data points that determine pricing, 1% error rate is apocalyptic. 1% error rate translates directly to losses when a decimal point gets misplaced, or a cell reference stops updating when you update a related cell, or a division-by-average formula decides to try divide by sum instead. No, these aren’t hypothetical examples or made up for horror story effect, all of these happened:
* A global bank lost £4.7 billion after value-at-risk figures were incorrectly copied and pasted between files.
* A large fund manager lost £2 billion from an omitted minus sign in a dividend estimate.
* A major advisory firm made a computational error that left £315 million unaccounted for in the value of a high-profile transaction.
* A local authority paid around £315,000 more in interest on bonds than it needed to due to an underestimation based on a missing cell in a sum formula.
* Shareholders in a software company got paid roughly £79 million less than intended on a high profile acquisition due to a spreadsheet error.
And this is just a small sampling from highly visible cases – industry groups have estimates that well over 90% of spreadsheets contain errors. And yet, spreadsheets remain the tool of choice for many critical business processes.
Why Errors Are Inevitable
The movement of spreadsheet creation from IT professional to individual departmental users helps explain why errors are so prolific. Spreadsheet creation has gone from IT and data processing professionals, to millions of non-technical, line of business departmental users over the past several decades. And because the majority of these people are not trained in software development and testing processes, it is unsurprising to find out that many spreadsheets in use are poorly constructed and insufficiently tested.
Errors happen at two critical junctures:
* Creation errors – errors built into the spreadsheet as it is designed and built. Faulty formulas, incorrect cell references, and overall logical errors. If these are not systematically accounted for and built into the software creation process, these foundational errors persist and compound into the system.
* Usage errors – manual data entry mistakes, version control errors, and using different copies of the same spreadsheet for different things, and mismatched data sources that require manual intervention to align.
The Quoting-Specific Implications
For manufacturing quoting, this has significant implications for under-quoting or over-quoting and profit margins. When quoting and a price gets under-quoted, your actual production costs are higher than the quoted price, reducing your profit margins on the order. If you over-price, you lose the business to a competitor.
Manual pricing calculations are critically vulnerable to data error that undercharge for services or over-estimate project costs, meaning a typo can materially cost a company millions.
Errors erode not just profit margins, but credibility with clients. Inaccurate quoting will lead to disputes with clients, delays on projects, and some instances project cancellations – all leading to direct financial impacts on a company’s bottom line.
Stakes increase when we consider the impact on material costs – if you are a plumber, mechanical, or electrical contractor – material costs are line items that can lead to underestimating project costs by five figures, quite literally demolishing the profit margin on some projects. In construction estimating, which is another component part of manufacturing processes, mistakes lead to either increasing overall project costs, or reducing margins, both which hit profitability.
Reason 3: Material Cost Volatility – Your Quotes Are Obsolete Before You Send Them
In an age of supply-chain disruptions, inflation, and fluctuating demand markets, raw material prices are changing on an hourly basis. Manual quoting systems that don’t have a process for ingesting this change regularly underprice – driving the business to absorb extra costs or over-price and scare the customer away. This dynamic is particularly pernicious because material cost fluctuations impact production cost, margin, and pricing.
Reason 4: Human Error In Accounts Payable and Invoice Matching
Fact: Missing invoices or even a misfiled invoice in the accounts payable chain leads to real financial impacts. Every incorrect or unmatched invoice costs a company, on average, a little over £300. Every quote submitted and invoiced as the wrong rate or with the wrong pricing metadata leads to hours of time chasing incorrect invoices. Multiply hours by labor cost, by invoices by days of potential lost sales. And repeat, as necessary.
Fact: How do we know this? Years of research into the subject have lead to an entire new industry. Tail spend management companies and low-value spend optimisation have become a new industry focused entirely on mitigating invoice matching errors to squeeze margin out of late or incorrect invoice reconciliation in accounts payable. Manual quoting processes drive tail spend – it’s that simple.
Rate Changes And Complexity Driving Human Error And Time-Sucking Errors
Fact: Manual rate management wastes time and money. Case studies, interviews, surveys, and white papers from independent industry research suggest the problems related to manual rate management can go as high as:
* Manual rate management practices slowing down quoting processes by up to three days in the worst cases
* Manual rate management processes requiring up to 43% of sales executives time and capacity.
Fact: Invoices that require manual price matching add real financial and time expenses to processes. An incorrect invoice submitted to an accountancy chain (meaning prices or rate information is missing or mismatched), which causes an invoice reconciliation issue costs a business on average a little over £300 on average. Hours of staff time chasing information and fixing invoices which have to then be chased by teams further downstream leads to orders canceled before they are even put in place.
Fact: The problem of rate changes and rate management starts at the top. When you manually source rates from dozens of different vendors who don’t have a single place to publish or self-report pricing, for each quotation your team finds manually, an equal number of quotes are missed.
Fact: Missing a rate leads to real cost leakage. Invoices with incorrect or missing pricing metadata lead to orders being submitted as the wrong cost, which means they are matched to the wrong pricing and require significant levels of manual re-work which has quantifiable labor hours and costs. If employees could chase manual rates for the hours required to do so in a standard workday, you’d stop hiring hourly employees for rates. Hours have to be sourced by adding people to the team because it is impossible to do in existing workloads.
Fact: Engineers and team members who could be driving profitable work in your company spend all day cross-checking information between emails and PDFs. Administrative work. Manual, time hunching administrative work on quote verification adds no value to your organisation. Admin work. The reality of sourcing invoices manually, cross-checking them by hand or electronically between multiple legacy systems rather than a single SaaS product.
Fact: Manual rate change management doesn’t work and companies are held ransom to changing rates. Rates change. Rates change so frequently in an age of economic shocks that it is mission impossible for humans to manually update and maintain an inventory of rates from more than a handful of suppliers without an SaaS rate management product designed specifically for that purpose.
Reason 5: Automation Drives Profit Margin By Extracting Your Organisation’s Attention
Fact: Automating time-consuming tasks allows companies to extract their organisation’s attention, or time, to do the work that builds your company rather than manual admin that contributes no value-add to your organisation’s profit equation.
Fact: Automated processes mean human resources who are freed up from repetitive or admin tasks focus on valuable work like closing deals. Repetitive administrative tasks consume sales time and limit opportunities. Focus on selling is where companies derive real competitive advantage.
Fact: Automation can increase time in-field, where it matters, by 38%. The key to improved lead response times is to re-allocate human attention to proactive sales cycles. Sales and commercial teams working exclusively on growth hacking new customers are typically only focused on those tasks 5% of the time.
Fact: Automation of routine processes helps people retain focus on profitable activities. Shifts in cognitive capacity on the part of human resources reduce the overall cognitive capacity available to do valuable work like processing RFQs and lead capture.
Fact: Automation of quote verification reduces distraction and wasted time. Automation can cut through several levels of manual quote review and allow complex data structures such as customer order requirements to be automatically reviewed against pricing and customer order parameters to deliver immediate verification pass/fail rates.
The Speed-to-Quote Gap—Losing Deals Before You Know They Exist
The same principles that cause increased cost of labour to bankrupt 20% of businesses also explain why responsiveness (or lack thereof) signals reliability to customers. In manufacturing and procurement, the time it takes to respond to a sales or procurement requisition directly impacts win rates. If competitors can respond in hours, and your team can’t quote for at least a day, your business is systematically losing opportunities to faster competitors.
A recent survey of 87 shippers showed that 62% were “somewhat concerned” and 38% were “extremely concerned” about losing sales due to their slow RFQ response time. If even just 5% of bids go to the fastest responder, slow quote processes directly reduce win rates.
The First-to-Quote Advantage
“A quote is worth the price, but only if you get it first.”
“One thing I learned [after going live] was that the very first person to quote is probably going to win the deal.” - One COO in the freight sector.
The results speak for themselves. In the freight industry above, after automating quoting, the company’s win rate increased by 35% almost overnight—without changing a single pricing variable. The lead in speed created the advantage. The same holds true in manufacturing.
The mathematics of delay are brutal. A mid-market freight forwarder handling 50 quote requests per day, with an average shipment value of £4,000 and 30% gross margin, manages about £200,000 in potential daily revenue. If that forwarder is second to quote half the time and loses just 50% of those delayed quotes, they’re leaking well over £2.1 million in annual gross margin. It only takes a few weeks to lose a million quid.
The win-rate impact in the manufacturing industry is even more pronounced. Fast RFQ turnaround creates competitive advantage and greater opportunities to increase profit margins. Suppliers who can’t respond to RFQs quickly enough will see revenue decline over time as they lose business to suppliers with automated quoting processes.
The Manual Bottlenecks
Manual quoting workflows create multiple points of delay that combine to form a devastating competitive disadvantage.
A typical manual workflow for manufacturers might include:
1. Receiving quote request via email.
2. Pull up supplier/carrier rates from multiple spreadsheets.
3. Check for special handling/requirements or technical constraints.
4. Calculate margins manually, or use outdated spreadsheet formulas.
5. Format quote in Word/Excel.
6. Get internal approval.
7. Send quote back to customer.
An average process above can take between one and three hours per quote—untenable in today’s digital-first economy. For complex manufacturing orders, the RFQ phase can take weeks of time from skilled professionals.
The small tasks that manually gather pricing details, checking stock availability, and waiting on internal approvals can prolong the quoting process exponentially. Manual overreliance on spreadsheets or word-of-mouth pricing also slows response times and introduces inconsistencies, error risk.
The new expectation of responsiveness from digital commerce has already started to eclipse the decades-old importance of response speed in marketing. When only around 43% of sales executives’ time is spent on activities that add strategic value because so much is consumed with manual quoting and administrative tasks, teams are unable to prioritise strategic initiatives.
The Approval Bottleneck
The approval process represents one of the most frustrating bottlenecks in a quote generation.
Approval workflows trap requests in email inboxes awaiting review, with each stakeholder representing a potential delay point. Manual workflows relying on email or word-of-mouth for approvals create significant barriers to operational effectiveness.
Automated approval workflows route configurations and quotes to appropriate approvers based on pre-defined rules—whether for technical validation, pricing exceptions, or management oversight. Automated notifications alert approvers instantly, while intuitive dashboards visualise pending actions. Without this automation, manual approval processes inherently create systematic delays and hand opportunities to competitors.
The Secondary Costs of Slow Quoting
The damage caused by slow quoting isn’t only direct lost revenue. Manual quoting also incurs several secondary, less-obvious costs.
* Opportunity cost: Quoting teams that have to manually author and approve each quote have less capacity to focus on high-value account expansion, customer engagement, or strategic planning. Sales executives should be focusing on high-value strategic account expansion, not getting bogged down in manual labour.
* Reputation damage: In an industry where responsiveness is a baseline expectation, slow response communicates unreliability to prospective customers. The winners in freight forwarding today aren’t the companies with the lowest rates or largest networks; they’re the ones that quote in minutes, not days or weeks.
* Customer frustration: Delayed or inaccurate quotes leave customers without a clear idea of total price and start erosion of trust. Price-sensitive prospects with options expect fast, clear, tailored responses especially in competitive bidding scenarios. A poor customer experience due to long sales cycles and opaque pricing mechanisms often result in lost cross-sell and upsell opportunities.
The longer it takes to create and approve a quote, the more likely a prospect will lose interest or question your organisation’s professionalism.
Automation flips that equation. Automating to quote speeds response time, enables consistent pricing, and frees up valuable sales and engineering resources for strategic work.
Reason 6: The Invisible Margin Erosion—Death by a Thousand Cuts
The final, and perhaps most insidious, impact of manual quoting processes is how they enable the quiet death of long-term profitability through a slow, attritional erosion of margins.
Margin erosion: the gradual decrease in an organisation’s profitability that occurs when the cost of goods sold increases faster than revenue. Erosion happens silently, compounding year after year. It’s often not visible to line managers until major profitability challenges emerge.
Understanding Margin Erosion Mechanics
Margin erosion is observable when the cost of manufacturing or delivering goods increases at a faster rate than prices charged to customers. This cost revenue imbalance shrinks the profit margin percentage, directly impacting the bottom line. With manufacturers globally already operating on razor-thin margins—where OEM profit margins in many sectors now sit around 7–8% and supplier profit margins nearer 5–6%—even small margin erosion becomes catastrophic.
Manual quoting processes enable margin erosion through multiple ways:
* Underestimating COGS: One of the most common margin erosion pitfalls is underestimating cost of goods sold (COGS). This often happens when indirect costs such as storage fees, electricity, or other overhead costs are overlooked. Ignoring seemingly small line items leads to inflated gross margins that mask potential problems.
* Pricing lag: When approval delays lead to prices changing by the time quotes are finalised, companies either honour the unprofitable quotes or ask customers to reprice—damaging customer relationships.
* Poor change order management: Absent clear, consistent processes for managing mid-project changes, teams risk absorbing extra costs. Scope creep—the natural tendency for projects to expand beyond original parameters without corresponding budget increases—impacts profitability.
* Inconsistent pricing: Manual quoting results in pricing that’s all over the place. Approaches vary by quoting professional. Manual methods introduce inconsistencies that can lead to systematic under-pricing in certain scenarios.
The Compounding Effect
These individual margin erosion factors combine in a compounding, silent fashion.
Manual quoting is prone to judgement calls, inconsistent standards, and inherently introduces substantial risk. If a quoting professional fails to notice a potential manufacturability issue, forgets a special finishing treatment, or provides a slightly different number than another professional on the same team, it can cost a fortune to remedy downstream.
Financial issues in business due to bad spreadsheets and formulas include:
* Loss in revenue, profit, cash, assets and tax.
* Bad pricing and decision making.
* In extreme cases, outright financial failure.
The inability to obtain supplier prices quickly forces manufacturers to fall back on previous quotes, past experience, and other less-than-accurate methods. That adds variability and risk to maintaining margins when submitting quotes to customers.
The Procurement Leak Factor
Inefficiency often lives in areas that don’t show up as obvious red flags on a P&L statement but rather appears as time lost, margins squeezed, and operational drag. Inefficiencies creating this slow drip-down impact the P&L in cumulative ways.
* Missed discounts: Finance negotiates early payment terms or volume discounts that are never tracked or realised.
* Rework and errors: Manual data entry introduces mistakes leading to corrections, delays, or disputes.
* No contract compliance: Teams buy outside of preferred vendors or contracts, often 10–20% more expensive per item.
* Decentralised purchasing: Business units bypass procurement processes for speed, leading to inconsistent pricing and duplicate supplier relationships.
Few CFOs and COOs would accept a 10% margin loss from sales or delivery errors, yet procurement and quoting inefficiency are often tolerated even when they silently cut just as deep.
The Revenue Recognition Problem
Invoice errors caused by manual processes cause suppliers to return them and sales to have to check the process to see where the errors are. Payments from these invoices come in late, which negatively impacts cash flow. The poor customer experience and long sales cycles then lead to no cross-sell and upsell opportunities, affecting P&L statements.
Manual quoting and procurement processes incur revenue leakage in the following ways:
* Inefficient response time leads to lost sales.
* Erroneous quotes or invoices lead to rework, poor customer experience.
* Missed upsell/cross-sell opportunities in long sales cycles.
Revenue recognition issues are a common problem across multiple businesses and departments when there is no centralised, automated quoting process, and results in revenue leakage from siloed departments and lack of automation becomes systematic.
The Path Forward: Breaking Free from Spreadsheet Prison
Manual quoting is an existential threat to competitive manufacturing operations and healthy, growing profit margins. With 86% of manufacturers losing deals due to slow or manual quoting, 5% annual revenue leakage due to errors, and 94% of spreadsheets containing errors, the status quo is no longer financially sustainable.
The way out lies in modern automation that does not replace human experts, but rather enables and amplifies their strengths. CPQ (Configure, Price, Quote) software such as Ironquote.io auto-generates quotes from data that professionals already create in ERP systems, CRMs, or pricing databases and match up to requirements entered in simple web forms.
These systems:
* Increase accuracy by using reliable, centralised data to provide a quote of very high detail.
* Accelerate response time, enabling quotes in seconds or minutes, rather than days or weeks.
* Integrate real-time pricing to account for material cost fluctuations.
* Reduce labour burden, freeing skilled professionals for high-value strategic work.
* Protect margins through consistent, data-driven pricing.
The competitive landscape has shifted. Companies still stuck in manual quoting are not merely slower than competitors; they’re systematically disadvantaged across every dimension of what matters: win rates, margins, customer satisfaction, and operational efficiency. Every day a manufacturer is still in spreadsheet prison is a day their competitors are pulling further ahead.
The question is no longer should you automate your quoting process. The question is: how much longer can you afford not to?
Ready to escape from spreadsheet hell? Ironquote.io automates your RFQ process, eliminates pricing errors and delivers quotes in minutes rather than days. Stop hemorrhaging your profit margins and start winning more deals. Learn how here at ironquote.io.
