Let’s talk about commission reporting, because well done reporting changes the rules of the game.
Many companies get cold-sweat about monthly commission billing. If you’re looking for advice on how to change the way your sales teams are rewarded so they can be more successful… you’ve come to the right place! SANDS Partners and CaptivateIQ are here to help.
In the cycle of data reconciliation, providing accurate reporting and stakeholder engagement, the overall commission reporting process can take from days to weeks. This affects both the sales representatives and the motivation level of the compensation plan.
Instead of focusing on valuable factors to boost sales representatives productivity and grow your business, you can get stuck with manual spreadsheets and outdated process management solutions. Reliance on manual commission tracking for a single commission process is neither persistent nor scalable. In other words, the data is too unclear and difficult to reach to have any meaning for a business. Unfortunately, in this situation, everyone loses. Therefore, instead of wasting time updating data and investing in low-value activities, use your own company’s data, which should be a treasure of insights and analyzes for you. A properly managed compensation program can be a source of the highest quality data for the company. Why? Because it requires input from the entire sales team and is checked regularly to correct errors more often than any other set of data in the company.
Imagine the immediate analysis of customers at risk of churn, the most profitable segments of your business, or even new customer profiles that could be targeted.
You can already perform this kind of ad hoc analysis, but do your company’s teams have access to real-time data? With the right commission settlement software, these insights can be automated and delivered to sales representatives individually, managing their time and increasing sales productivity. A decade ago, salary experts were so focused on closing the month or year on time that performance reports and commission statements were not a priority. Progress in technology has made automatic processing the standard in all fields. With this comes another set of challenges. Instead of giving sales reps a retrospective view of commissions, imagine all the opportunities that arise when you proactively provide them with insights and key performance analyzes to help them do their jobs better. Managers can also benefit from this type of analysis as they serve as leading performance indicators for a representative. Management can then determine which vendors are most likely not to meet the limit because their average transaction size is too low or the number of transactions they need to reach the limit is low compared to the plan. This data can give managers the feedback they need to effectively intervene and correct salespeople’s behavior, increasing the likelihood that the entire team will achieve high results.
Before you start building effective reporting, it is necessary to classify commission reporting stakeholders into four main groups:
Sales department and Administration
Finance and HR
Most sales reps neither have the time to go through the reports in detail, nor do they search for information every day. Instead, they want to know if they are on track to meet their monthly limit? Are they ahead of schedule? How much commission have they earned so far? Accessing this information helps them understand what to invest their energy in.
Directors usually want to have full visibility into the commission process. It can help them not only identify employees who are having a hard time and may need mentoring assistance, but will help them gain or maintain the company’s ability to attract, retain, and reward sales talent. This again affects their ability to achieve corporate goals.
Sales departments and admin
The administration department can spend hours manually cleaning data and performing calculations to ensure teams receive accurate and timely payments. It takes time that could be devoted to more important initiatives. After all, they are responsible for managing each department. A scalable, accurate solution will simplify the complex commission calculation process.
Finance and HR
With reports, financial managers have clarity in terms of pay versus performance, budget spending versus actual, and so on. Reporting shows how much transactions cost the company so they can better understand the economy of the entity and make the necessary adjustments. Commission reporting should enable the sales department to perform as good as possible. The commission data you discover are usually the most valuable drivers in your sales organization. Unfortunately, the inflexibility of most of today’s commission software, combined with inaccessible data, significantly affects an organization’s ability to use these analytics to better motivate salesperson performance. Just think about the impact this can have on increasing your sales culture as there is more transparency.
Another tip at the end?
Make better decisions with analytics. Look for reliable yet flexible software that integrates seamlessly with your existing sales tech stack. Once that’s done, you have the basics to build on transparent and structured reports that anyone can understand and use on an ongoing basis.
Interested in learning more?
Book a conversation with a software developer – CaptivateIQ or with us – a technology implementation partner; to find out how we can help.