Organizations that rely on manual compensation methods frequently face a slew of operational issues. Inefficient manual compensation systems, if left unchecked, might severely hinder an organization’s ability to tackle these difficulties.
In most cases when a need for change has been identified, cross-functional teams are formed to identify and implement corrective solutions for common pain points associated with existing manual compensation systems.
The following are some of the most common pain points:
- Sales results that fall short of expectations: Sales are down due to a lack of plan clarity and shadow accounting.
- Payouts of commissions that aren’t accurate: Overpayments are still being identified by audit teams on a regular basis.
- Systems that are inefficient and inflexible: Annual compensation plan modifications might take a long time for IT teams.
While there is a lot of pressure for sales commission automation, companies must realize that developing a compelling business case takes time and effort.
Calculating commissions can be a daunting and time-consuming task as a sales funnel can include different sales reps, sales managers, and spiffs. Thus it could get confusing to calculate, verify, and then recalculate commissions of every sales rep and for every deal.
A sales commission software helps in automating several manual tasks so that commission calculation can be done accurately, efficiently, and quickly without any errors. Integrating a sales commission software with a CRM will pull the company’s data in real-time so that you can manage sales reps and other sales team members easily.
Why Should You Automate Your Sales Commission
Sales commission software allows reps and others in the organization to have real-time access to commission statements and other data. Representatives are motivated to see what they’ve earned and strive to earn more when this data is readily available. Sales managers can also motivate their staff depending on their progress toward their objectives.
Because the data is available in real-time to sales representatives and managers. Finance managers are no longer spending hours of their day manually creating and delivering end-of-month commission statements.
Aside from the obvious benefits of increased incentive and reduced manual reporting. The best commission tracking solutions also provide insight into the calculations that go into the numbers. Representatives can see how the figures are calculated with only one click, so they can trust the numbers they see. There will be no more searching for formulas in an Excel file or sending emails to validate commission statements, allowing you to concentrate on selling.
Aside from the obvious benefits of increased incentive and reduced manual reporting. The best commission tracking solutions also provide insight into the calculations that go into the numbers. Representatives can see how the figures are calculated with only one click, so they can trust the numbers they see. There will be no more searching for formulas in an Excel file or sending emails to validate commission statements, allowing you to concentrate on selling.
Why Is Gaining Approval for A Sales Commission Solution So Challenging?
Immediate, hard-dollar benefits are easily identified since they are tangible, visible, and often easily quantifiable. Identifying the long-term benefits of sales commission software, on the other hand, could be a complex fact-finding operation that necessitates both a thorough understanding of the solution’s entire capabilities and the capacity to apply them to existing challenges.
Because the goal of business case teams is to get clearance and move projects forward. They will focus their efforts on identifying immediate hard-dollar benefits and ignore longer-term issues. As a result, business case teams are left with an insufficient picture of the short- and long-term. Benefits of investing in sales commission automation. This raises the chances of the project not being approved. Causing a delay or perhaps the project being shelved in favor of more suitable investment alternatives.
When talking to organizations that have failed to make a business case, the most common reason given is. That they did not spend enough time at the start quantifying long-term and soft-dollar benefits. In other words, they don’t assess the new solution’s total impact.
To enable internal teams to look at the benefits and costs of sales commission automation holistically. And launch the process, firms should think about the following four categories:
- What are the desired objectives, such as increased income, cost savings, and efficiencies?
- What is the project’s time to value?
- Now, What are the risks, and how can they be avoided?
- And what is the total ownership cost?
How to Maximize the Benefits of Sales Commission Automation?
Companies will profit from sales commission automation in a number of ways. Including improved alignment with sales strategy, increased effectiveness of sales cycles. Decreased payout errors, and lower administrative costs. However, enhanced agility through sales performance management application administration has been the most significant long-term benefit that companies have experienced over the years.
Automation of sales commission also allows for a review of existing procedures and the use of modern solutions. Companies identify opportunities to reduce complications when they go through the process of implementing new systems and automating processes. Some Intangent clients see a significant reduction in the number of software logic components managed after automation compared to manual processes.
Automated systems will speed up year-end plan adjustments in addition to providing efficiencies in plan maintenance. Compensation teams are more motivated to experiment and spend more time modeling when complexity is removed. When pay administration teams spend less time correcting errors, they have more energy to dedicate to proactive sales force assistance. It’s apparent that using simplification tactics to tackle complexity produces better results and has a direct impact on cross-functional team agility.
The Bottom Line
Automation of sales commission minimizes human error from the sales commission process and enables sales staff to focus on selling rather than regularly spending time calculating their commissions
All of the data you collect in your sales commission software allows you to improve your sales process even more. Sales commission software does more than just compute commissions; it also gives you information about your sales staff and how they work. Sales data visibility helps firms in identifying areas for growth and improvement.
