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The sales commission process is critical in motivating sales teams and driving top line revenue growth - possibly the most important metric organizations track. But manually calculating commissions leaves room for human error and unhappy sales reps.
So, if you are still using (and struggling) with Excel in getting your commission process completed, here are 5 reasons why you should seriously consider automating your sales commission calculation with sales commission software, a category of software that automates even the most complex commission processes. There are many benefits to implementing a sales commission software, but let us have a look at the 5 of the most critical ones.
1. Improved visibility into the sales commission process
Adopting new-age sales commission softwares ensures real-time access to commission calculations, for sales representatives, their managers and possibly anyone in the organization. Having this information readily available motivates reps to see what they’ve earned and strive to earn more. Sales managers can also motivate their teams, while keeping an eye on their progress.
Xoxoday Compass helps you turbo charge your sales teams, enables less manual reporting, and provides transparency in the actual calculations behind the numbers, which helps the reps trust the numbers they see because they can see how they’re calculated with just one click. What’s more is with automated payments, you can have a clear picture about redemption trends.
2. Increased productivity for sales and finance teams
Manually entering data into spreadsheets leaves room for error and makes the process extremely slow and tedious. It takes hours and days together to calculate commissions for all reps. The possibility of human error causes scepticism. Sales reps spend hours calculating, confirming and reconfirming their final commission statements with their managers and finance teams. When you have a massive workforce spending so much time on futile activities leading to loss of efficiency, wastage of time and effort.
Xoxoday Compass removes the necessity of human intervention in commission calculation and payment process thus eliminating error from the sales commission process. It also empowers sales teams to focus on selling instead of spending time calculating their commissions.
Manually managing commissions puts a cap on scalability and growth. Organizations face major challenges when they try to build a commission software within Excel that requires complex logic making it impossible to calculate commissions at scale.
With Xoxoday Compass, you get the best of excel like an intuitive interface along with variables, payout options and is scalable for small and gigantic enterprises and start ups alike.
3. Enhanced accuracy across the commissions process
Did you know that 88% of spreadsheets contain errors. That is crazy right? Imagine, calculating commissions on Excel for hundreds of thousands of sales reps and 88% of them turning out incorrect. The waste of resources in terms of lost time, efforts and money, coupled with chaos resulting in demotivated sales reps is a horrible spot to be in. Now imagine this happening routinely. Miscalculating commission leads to unhappy sales reps, resulting in high turnover rates. Yet another challenge when you release payments manually is first the possibility of error while releasing payment and the rigidity of cash and brand vouchers.
Automation reduces human error—ultimately, eliminating more than 90% of errors—so you can be confident in your data and trust that your decisions are backed by fact.
With Xoxoday Compass, you can easily build complex commission programs with the familiarity of Excel within a few clicks, release payments in terms of bank transfers, credit notes or gift cards with an option to redeem from 20000+ options , also reducing the constant friction between sales, HR and finance teams.
4. Better access to critical data and insights
With all transactions and calculations happening over the system, commission systems allow the ability to report comprehensively on sales commission information. Analytical and dashboards empower the sales reps, team leaders, management to slice and dice the information available in various ways.
Xoxoday Compass instantly becomes the single source of truth that ensures that everyone in the business ecosystem bases business decisions on the same data and derives action insights.
Xoxoday Compass gives you a configurable widgets & reports dashboard that helps you measure what matters with configurable widgets for both admins and end users. It lets admin users configure widgets like Investment ROI, program participation, leaderboard, regional performance, team wise performance, and empowers end users with widgets including earning trends, team leaderboard, earning simulator, and more.
5. Superior tax and legal compliance
When you are manually calculating commissions on Excel, it does not allow you to configure tax implications, let alone factor in data based on slabs or geographies, making financial reporting and legal compliance independent of commission calculation and payouts.
Xoxoday Compass, apart from enabling fair, error free and transparent incentive calculations, takes care of user authentication and all security measures like GDPR or ISO and handles geographical tax implications and compliance
The hard truth is you can’t be strategic even if you are managing one aspect of your sales process manually. Because you’re focused on tactical measures instead of strategy—and even worse, your data is static, so your decisions are reactive instead of proactive, costing you hundreds of dollars, as you let go of your best sales reps, critical time and crucial efforts.
Supercharge your sales team with the world’s leading commission software.
Frequently asked questions on sales commission
Here are the frequently asked questions on sales commission:
1. What is a sales commission model?
A sales commission model is a structure that determines how sales representatives are compensated based on their sales performance.
Sales commission model outlines the commission rates, thresholds, and rules for calculating and distributing commissions.
2. What is sales commission?
Sales commission refers to the monetary compensation sales representatives receive based on their sales performance.
Sales commission is typically a percentage of the representative's sales revenue or a predefined commissionable action.
3. What is the formula for commission?
The formula for calculating commission is:
Commission = Sales Revenue * Commission Rate
The commission rate is a percentage determined by the organization and can vary based on factors such as sales volume, product type, or target achievement level.
