SAP Commissions
SAP HANA
Managing commission holds and releases with Xactly

Table Of Contents

Commission payout practices have undergone a significant change. Traditionally, sales commissions were straightforward—sales reps earned their commission, and they received their payment promptly. However, modern businesses face complex scenarios that necessitate holding and releasing commissions based on various conditions. 

Xactly’s innovative solutions provide the flexibility and control needed to navigate these complexities effectively.

Common scenarios for holding commissions

Several common scenarios illustrate the modern approach to commission payouts:

  • Quarterly and half-yearly payments: Payments are timed to coincide with financial quarters or half-year marks, aligning with company financial cycles.
  • Payments upon customer invoicing: Commissions are released only when the customer is invoiced, ensuring alignment with billing cycles.
  • Payments upon invoice payment: Ensuring the customer has paid their invoice before releasing commissions minimizes financial risk.
  • Go-live payments: Commissions are released when a customer goes live with a service, ensuring the product or service is fully operational.
  • Utilization-based payments: Tying commissions to customer service usage aligns incentives with customer engagement.
  • Company performance-based payments: Commissions are released based on achieving company-level KPIs, such as specific earnings before interest, taxes, depreciation, and amortization (EBITDA) targets, fostering a focus on broader business success.

Xactly’s role in managing commission holds and releases.

Xactly offers robust tools to handle the complexities of modern commission payouts. The platform’s automation capabilities streamline commission calculation and holding, making it easier to implement and manage sophisticated payout logic.

Data sources and integration

Effective commission management relies on accurate and timely data. Xactly integrates with various data sources, such as manual inputs, SFTP, NetSuite, Dynamics, and its own Xactly Extend platform. These integrations allow for comprehensive data enrichment, ensuring all 

necessary information is available to trigger commission releases accurately.

Process of releasing held commissions

Xactly’s platform simplifies the process of releasing held commissions through a structured approach:

  1. Gathering held commissions: Compile all commissions that are currently on hold.
  2. Validation: Verify conditions such as quarter-end, invoice payment, or other criteria.
  3. Data enrichment: Use relevant data sources to ensure all conditions are met.
  4. Release: Process the commission release once conditions are validated.
  5. Informing stakeholders: Notifying all relevant parties about the commission release to maintain transparency.

Customization and flexibility

Xactly Extend allows businesses to build custom applications for specific commission release scenarios, including manual approval workflows for deal-by-deal commission releases. This customization ensures that even the most unique business requirements can be met efficiently.

Reporting and Visibility

One critical aspect of commission management is reporting. Xactly provides detailed reporting capabilities that offer visibility into held and released commissions. Customized incentive statements help sales reps understand their earnings, what is being held, and the reasons behind it, fostering transparency and trust.

Practical considerations

Implementing an effective commission management system involves balancing cost, flexibility, and process efficiency. Xactly’s solutions are designed to be future-proof, adapting to changing business needs while providing robust processes that streamline commission management. Additionally, detailed reporting ensures all stakeholders have visibility into commission statuses, enhancing accountability and motivation.

Conclusion

The shift towards complex commission payout scenarios requires innovative solutions like Xactly’s. Xactly provides the flexibility and control businesses need to align payouts with their strategic goals by automating the calculation, holding, and releasing of commissions. Effective commission management motivates sales teams and ensures that businesses can manage financial risks and achieve broader success.

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Grzegorz Struś

GRZEGORZ STRUŚ

Member of the Board, COO
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