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When Microsoft launched Excel in 1983, it revolutionized business practices by streamlining calculations and record-keeping, making previously cumbersome data management tasks more accessible. This powerful tool opened the door to a new era of data handling, enabling companies to harness vast amounts of information like never before.
However, this convenience comes with a significant caveat: nearly 90% of all spreadsheets harbor at least one error. Despite its user-friendly interface and versatility, Excel's widespread adoption for tasks such as sales compensation calculations raises critical questions about its reliability.
Imagine using Excel for calculating sales compensation. The result is often a chaotic mix of errors and confusion, leaving stakeholders baffled about how things went so awry.
Yet, many SaaS companies still rely on Excel spreadsheets to manage sales commissions that can amount to millions annually. This blog will explore compelling reasons to reconsider this approach and the advantages that come with automating the sales compensation process.
Breaking down the 5 problems with excel
Following are the five problems with excel that you must navigate through for better results.
Problem #1: It becomes hard to navigate through SaaS sales scenarios
Managing sales compensation in the SaaS industry presents a unique set of challenges that can quickly overwhelm traditional tools like Excel. While spreadsheets offer flexibility and ease of use, they fall short when it comes to tracking complex commission structures across multiple sales representatives and hierarchical levels.
The intricacies of mid-term policy changes, bonuses, and various incentive programs further complicate the landscape, making it nearly impossible to maintain the necessary detail for effective commission management.
As SaaS companies increasingly aim for ASC 606 compliance, the stakes are even higher. This accounting standard requires revenue to be recognized over time, necessitating a shift in how sales commissions are calculated and reported. With the potential for errors lurking in every spreadsheet, relying on outdated methods can jeopardize not only financial accuracy but also overall business success.
It helps prevent overpayment by aligning commission payouts with the revenue that has been recognized. Sales teams can also see their earnings in real time, along with any potential claw backs. This transparency helps everyone stay informed and reduces confusion.
Problem #2: Not sharable
(What do you mean it’s not shareable - add it as an attachment to an email!)
Sure. But you cannot do this when you have a massive team of hundreds and thousands of employees who want to access the same file. Now imagine your entire sales workforce mapped against 15 different incentive plans. Now add in the complexity of team leaders being able to track the incentives of their team members but no other team members. This is exactly what makes Excel non-sharable and challenging.
Problem #3: No real-time visibility
Microsoft has made significant efforts to enhance Excel's connectivity, yet it remains a disconnected system. Companies often require direct access to data from their CRM, ERP, and Payroll systems. However, integrating this data into a central spreadsheet for real-time updates is nearly impossible.
Clients typically resort to manually cutting and pasting data from these systems into Excel, followed by data manipulation and normalization before running commissions. This method is slow, error-prone, and lacks real-time capabilities.
Problem #4: Not built for incentives
Excel is a blank canvas with two dimensions. It cannot handle complex calculations, coupled with layers of logic. And you will have to resort to using 10s and 20s of nested ifs and indexes to arrive at the final value. God forbid if you go wrong with one of those 20!
Problem #5: Not designed for scale
Even with enhancements to make Excel multi-tenant, cloud-based, and commission-specific, it remains inadequate for managing complex commission programs. Emery Berger from Microsoft Research describes Excel as a “functional, reactive programming language,” highlighting its dual role as a database and programming interface.
However, Excel excels only when handling small datasets and straightforward mathematical logic. As complexity increases, its limitations become evident, leading to what is termed "technical debt."
This occurs when users attempt to develop software-like solutions within a spreadsheet framework. Consequently, Excel is not suitable for extensive programming tasks; research indicates that up to 90% of spreadsheets contain significant errors that compromise data accuracy.
Thus, while Excel is a powerful tool for basic tasks, it cannot effectively support large-scale software applications or intricate commission structures.
Ready to replace excel for sales commission management solution?
opt for Compass because:
1. A robust maintainability
Several large competitors offer comprehensive products for various commission scenarios. They boast numerous integrations, extensive reporting capabilities, and a substantial customer base. However, many customers express dissatisfaction due to high setup and maintenance costs.
Compass pricing begins at $20 per month, with options for monthly or annual payments. There are no hidden fees or additional charges to access any module. Furthermore, the implementation period is approximately three months.
2. Scalability
It connects and centralizes sales data from over 85 databases, including popular CRMs like Salesforce and HubSpot. This allows for seamless integration and management of sales information. Sales representatives can access an earnings calculator to estimate their commissions, helping them focus on high-value deals without worrying about end-of-month payouts. Users can create personalized dashboards to track performance against specific commission schemes, providing clear visibility into individual and team metrics.
3. No-code is the right move
The Low Code/No Code movement is transforming developer experience (DX) by enabling knowledge workers to create powerful solutions without needing engineering resources.
These platforms facilitate automation and application development, exemplified by tools like Zapier and UiPath, as well as business applications within Salesforce and Workday ecosystems.
Compass, a no-code commission tracking software, allows sales teams to calculate commissions accurately in real-time. It empowers sales leaders to monitor performance and earnings while automating commission calculations and approval processes, thereby optimizing the management of sales commissions effectively.
Compass offers an intuitive platform that simplifies the management of incentive plans, making it easier for commission managers to set up and maintain compensation structures without extensive training.
FAQs
1. How do you manage commissions?
Compass automates commission calculations and tracks performance in real-time. It simplifies the management of complex commission structures, ensuring accuracy and compliance with accounting standards.
2. How do you keep track of sales commissions?
With Compass, you can access a centralized dashboard that provides visibility into sales data and commission payouts. This real-time access helps prevent overpayments and keeps everyone informed.
3. How do I set up a sales commission plan?
Setting up a commission plan in Compass is user-friendly and requires no coding skills. You can define variables and logic easily, allowing for customized plans that suit your business needs.
4. What is the best way to keep track of sales?
The best way to track sales is through Compass’s integration with over 85 databases, including CRMs like Salesforce. This ensures that all sales data is consolidated and accessible in one place, enhancing visibility and decision-making.
