It is no secret that some sales teams, if not all of them, are motivated to close deals faster by the commissions they will receive for meeting their sales quotas. This is pretty much understandable because, after all, bills have to be paid.
But in most cases, tracking sales commissions can be a huge challenge for sales teams and employers. This guide discusses commission tracking, how to track commissions, and the advantages of using commission tracking software to track sales commissions. Let’s get started.
What is commission tracking?
Sales commission is a crucial aspect of sales compensation. It is the amount of money that salespersons earn based on the number of sales they’ve made over a certain period of time. Of course, this is additional money the salespeople get on top of their standard salaries. So, tracking commissions means keeping track of the bonuses that salespeople earn when they sell a product or service.
This process is crucial as it ensures that sales reps are compensated accurately for their sales deals. In addition, commission tracking prevents hassles between employers and sales teams on their payouts.
As a sales rep, tracking your commission ensures you get paid what you have worked for. It can be pretty frustrating to get shortchanged on a paycheck because you did not understand your commissions. That’s why it is critical to track your commission so that you are able to understand the amount of incentive you should get. To do that, you must understand how to track your commissions.
How do you track commissions?
Knowing how to track your commission is an excellent step to ensure you get compensated correctly for your good job. When it comes to keeping track of your commission, you can do it by hand or use software.
Some sales reps still prefer to calculate their commissions manually because it seems like the simplest way to track commissions. However, it is limited to specific cases. The only ideal time to calculate your commission manually is when it is a straightforward commission plan and you have just a few deals. For example, if you have a commission plan that pays you 5% on every sale, you can easily do the math in your head.
While calculating commissions manually can be ideal for simple compensation plans, it can get confusing when you start adding variables, such as accelerators and lots of deals. In addition, it can be very time-consuming and a lot easier to make mistakes.
That’s why it is advisable to track your commission using commission tracking software. With this approach, you will save time and reduce the chance of making mistakes. Using the software is ideal for you, whether you are an individual sales rep who wants to track your individual commissions or you are a sales manager who wants to motivate your sales reps. Commission tracking software is often used in industries such as real estate, insurance, and finance. But are there any benefits to using software to track commissions? Well, sales teams and sales managers can benefit significantly from using commission tracking software.
What are the advantages of using commission tracking software?
Using commission tracking software is not only beneficial to the sales reps; it also has a solid and significant impact on all the departments of an organization. If you are still not convinced why you should use commission tracking software to track the commission you have earned as a result of closing deals, here are some advantages that it offers that can prompt you to do so.
1.It eliminates the chances of making mistakes.
Calculating your commissions manually or using a spreadsheet is more prone to making errors. For instance, the spreadsheet cannot bear the weight of complex commission plans and is more prone to mistakes. But when you opt to use commission tracking software, you significantly reduce the chances of making mistakes because the process is automated.
2.It will save you a significant amount of time.
Working on a spreadsheet when calculating your commission requires time and effort. You will have to work on the calculations per payee and formulas to arrive at the end total. Of course, this requires hard work.
3.No more budget guessing.
Improper compensation management can feed you with inaccurate data and can also provide you with wrong insights. You will end up using guesswork to calculate commission. But when it comes to commission tracking software, you can take the guesswork out of budgeting and payroll. This is a major plus for sales organizations because it can help boost their return on investment.
4.It helps in ensuring timely payment of commissions.
With employers equipped with the correct data and insights, this can help ensure that sales teams get their payment of commissions in a timely manner. This, in the end, will increase their productivity and boost their morale.
An effective commission tracking tool can go a long way in helping you boost your ROI. In addition, it can save you time and effort, which benefits your sales and operations teams. Your sales teams will fully understand the incentives they earn. This will motivate them to go above and beyond to close more deals.
If you’re looking for a good commission management tool, look no further than Innovyne’s ICM solutions. It provides the platform to better manage end-to-end activities such as the administration, automation, calculation, and reporting of complex incentive processes. An effective ICM solution can help in eliminating friction from the sales compensation process, thereby simplifying the compensation administration process and empowering sales teams by providing them with complete transparency into their sales performance.