Nothing fosters trust and transparency within your team more than fair and timely disbursement of their sales commission. Recognizing the need to reward the best sales professionals efficiently, companies have employed different ways to calculate sales commission payouts over the years: from basic spreadsheet and customer relationship (CRM) software to fully automated incentive compensation management software.
Is CRM Commission Tracking Worth It?
CRM software is one of the most elegant innovations in the business world. It has automated many tasks that ordinarily would've been tedious and labor-intensive. As a result, it has improved many companies' relationships with their customers. But will the CRM tracking template get the job done?
The long and short of it: Yes, but it is not without problems.
CRMs like Salesforce and HubSpot are fantastic pieces of software. However, they're not designed to manage your organization's incentive compensation program. At best, CRM tracking is wanting. At worst, it might be costly as CRMs don't have the features to calculate and track incentives efficiently.
For instance, Salesforce or HubSpot commission tracking lacks these essential features:
- Commission planning and optimization tools.
- Tools to calculate clawback.
- Sales quota management.
- Customization for complex commission structure.
There are two workarounds to this issue: either build a commission system in your CRM or choose an incentive compensation management software that integrates with your chosen CRM.
Many CRMs have features that allow your organization to make custom calculations. Thus, creating your commission software in Salesforce or HubSpot is possible. However, you'll need to hire a team of developers to develop and maintain your commission system in your CRM. Plus, you don't always have the assurance that you get all the features and tools functioning seamlessly. Building a system from scratch is tedious work and requires some heavy lifting before implementation.
And so, the better option is to choose software that integrates well with your CRM. For example, Palette integrates well with Salesforce, HubSpot, and other CRMs. Thus, you can centralize all your data and quickly roll out commission plans.
Sales Commission Tracking Spreadsheet
Some businesses also use sales commission tracking spreadsheets to process and track sales commissions. And while Excel is a powerful tool in your arsenal, a commission-tracking Excel template is not the best solution for processing incentive compensations. Here's why:
High Risk for Error
To use a commission tracker Excel template, you need to manually input data like the commission rates, sales amount, and other relevant information into the template. Unfortunately, manual data entry increases the likelihood of error. Typos, wrong formulas, missing information, or even a misplaced comma could throw the compensation calculation out of whack. Errors could engender dissatisfaction and distrust in your sales team. And it could adversely affect their performance.
Maintaining a sales commission tracker in Excel is not just time-consuming because of manual data entry; pay disputes could also be a headache. In addition, your staff could spend many hours combing through the mountain of data to verify and modify in case of discrepancies. And it's hours that could be better spent on things that impact your company's bottom line more.
Limited Analysis and Reporting
A sales commission calculator template may work when you're starting. But as your company grows, your sales team produces more sales; the process also generates more data. These volumes of data could give you more insights into key metrics. And a sales commission tracker in Excel doesn't have the functionality to handle these data. By missing out on these critical insights, you could be leaving money on the table or unable to explore opportunities to scale your business to new heights.
Inefficient Launch of New Commission Structure
Any business must innovate. And sometimes, changes in the commission structure are necessary as organizations grow or to keep up with the demands of the time. However, rolling out new commission structures using spreadsheets could be slow. Plus, if you use a more complex commission structure, Excel might need more functionality to support that.
Commission Tracking Software
Where CRMs and spreadsheets fall short, commission-tracking software seamlessly accomplishes the task. And it's no wonder that it does–it's designed for the same job. From essential to complex commission structures, sales commission tracking software has all the features and tools to make incentive payouts a joy for everyone. Here's a quick overview of its key functionalities:
Automate the Processes
Launching a sales commission structure is straightforward. You can define the rules, set the triggers, and the software will do the grunt work for you. Automation is not just a time-saver for your staff; it also reduces the risk of errors, as there's no need for manual data entry and calculations.
Handle Complex Commission Structures
The sales commission system's flexible configuration allows you to define multiple variables to easily design complex commission structures that suit your company's goal. For example, you could set various triggers for incentive payouts. For instance, your sales team must hit the sales quota and maintain an excellent retention rate to qualify for the incentive. Or you could design a tiered or vested commission structure with no problem.
Track in Real-Time
An excellent sales commission tracking software features a dashboard that reflects the sales team's performance in real-time. Aside from giving you access to critical metrics at a glance, this could also foster a culture of accountability and transparency in your company. Sales professionals know where they're at regarding sales performance as the dashboard gets updated in real-time. And they'll know what they'll need to improve and work at.
Leverage Advanced Analytics and Reporting
Data can be a goldmine. It can churn out insights that would propel your business further. For example, with sales commission tracking software's advanced analytics and reporting, you can split-test compensation structures, optimize company goals, and even forecast payouts.
Utilize Native Integrations
You can create a robust ecosystem of your favorite tools since sales commission tracker like Palette integrates with popular CRMs and billing systems. You can automatically pull out data from your preferred CRM, calculate incentives with PaletteHQ, and disburse payouts with your billing system of choice. It's hassle-free and a massive time-saver.
Commission Tracker App
Easy access to the commission tracker provides your sales rep a good dose of motivation to be more proactive and set their own goals in terms of their sales performance. For this reason, there is free commission-tracking software available. But when would access to a commission tracker via mobile device be necessary? Here are some situations where it can be a nifty tool to have:
If your company has a remote work setup, giving your sales team access to a commission tracker app can help them stay on top of their sales activities. Even when they don't visit the office regularly, they know what they must work on to meet their sales quota. This will empower them to be more proactive in setting and hitting their sales goals.
Field Sales Representatives
Field sales reps are always on the go. Their days are spent following up on leads, meeting clients, or traveling to other sites. Access to the sales commissions tracker, even on the road, is the transparency and motivation they need to strive and perform better on the field. In addition, it's the perfect reminder for them to be on top of their game when they're out there meeting prospective clients.
Occasionally, you or your sales team want easy and quick access to the sales tracker without opening the desktop. For example, your sales team leaders may be on their way home and want a quick look at how the team is doing. Or you could be on vacation and just want real-time updates on how the sales team is doing. Mobile access is the perfect way for real-time updates at a glance.
Picture this: you're at a sales meeting and want to verify some sales commission data or get an update. It'd be great to be able to check your mobile device to access a commission tracker app. Opening a desktop would be too cumbersome for this.
Best Incentive Compensation Management Software
When it comes to incentives and commissions, accuracy is paramount. When commission calculations are precise and transparent, this will inspire the sales professionals to perform well, knowing they will be rewarded fairly for their efforts. For this reason, the best sales compensation software should pay for itself.
Here's how to choose the best incentive compensation management software:
Excellent sales commission software is laden with features and functionalities. However, you should also consider your company's specific goals. Then, you can zero in on the very important functionalities to you. In general, these features are a must-have:
- Automated commission calculation
- Comprehensive analytics and reporting
- Commission plan templates
- Traceable and auditable calculation
Perhaps you are already using a CRM or a billing system. Or maybe you're eyeing software to add to your tech stack. Choosing compensation management software that integrates well with your database, CRM, and billing system is essential. This way, you can streamline your processes further and get the most value from your software.
Security and Compliance
Security is of utmost importance since the software will be handling critical data. Ensure the application has security measures and complies with industry-standard protocols. When choosing the best software, data encryption, user permission, and access control are some considerations.
Most software companies will tout their best features, but what does their existing customer say about them? Look for case studies, customer reviews, and testimonials. What the customers say is often the best gauge of what you can expect from compensation management software.
Commission tracking software simplifies calculating fair incentives for the best-performing sales professional. But simplifying doesn't mean compromising when your overall strategy demands a complex commission structure — simplifying means getting the best compensation management software to do the heavy lifting and automate the process for you.