Ask a distributor's best rep how they price a quote and, sooner or later, they will open a spreadsheet nobody else has. It is the most useful pricing document in the company, and the most dangerous.
The shadow spreadsheet looks different everywhere, but the contents rhyme. A tab of key customers and the prices they paid last time. A column of "real" costs because the ERP cost is out of date. Notes like "matches Bearings Direct, do not go higher" and "always asks for 5% off, start at list". Sometimes a few formulas that turn a target margin into a price, because the price levels in the ERP no longer make sense.
People talk about it as if it were laziness or a lack of discipline. It is the opposite. It is a rep doing the pricing job the official system does not do.
What the sheet is telling you
Every column in a shadow spreadsheet is a gap in the official pricing.
- A cost column
The ERP cost is stale, missing freight, or ignores a supplier rebate.
- A last-price column
The system cannot show what this customer paid before.
- A competitor note
Market prices exist only in the rep's head and inbox.
- A margin formula
Price levels no longer produce prices anyone trusts.
Read that way, the sheet is a free requirements document. It lists exactly what the people closest to the customer need in order to price well, and it shows that the official system does not give it to them.
Why it is still a problem
The sheet works for the rep who built it. It does not work for the business.
It cannot be shared without being copied, so three reps end up with three versions of the same customer's price. It never gets the supplier increase that landed last Tuesday. When the rep goes on holiday or leaves, the knowledge goes with them, and the next person quotes the customer from list. And none of it is visible to anyone checking margin, so the reasons behind the best and worst prices in the business are locked in personal files.
The problem is not that reps keep notes. It is that the notes are the only place the real pricing logic lives.
Banning it does not work
The instinct of most managers is to forbid the sheet and insist on the system. It rarely sticks. If the official price is worse than the rep's, the rep will either keep the sheet quietly or override the system's price by hand, which is the same thing with an extra step.
The only thing that retires a shadow spreadsheet is a system that does what the sheet does, better. That means four things in front of the rep on every quote line: the current landed cost, what this customer paid last time and when, what the market is doing, and a recommended price with the reasons behind it.
A better question to ask your team
Instead of "who still uses their own spreadsheet?", try "what is in your spreadsheet that you cannot see in the system?" The answers are specific, usually reasonable, and they make a better list of priorities for a pricing project than any vendor's feature sheet.
When the system shows the same things, and shows why each price is what it is, the sheet stops being opened. Nobody has to ban it.