Commission tracking for a large number of salespeople is an exceedingly complex chore, especially when there are multiple sales plans with a variety of splits, bonuses, overrides, caps, hurdles, guaranteed payments, and commission rates. This task typically requires a massive amount of accounting staff time manipulating electronic spreadsheets, and is highly error-prone. An automated alternative is available that allows the sales manager to retain a high degree of commission plan complexity while minimizing the manual calculation labor of the payroll staff.
The solution is to install incentive compensation management software such as is offered by Centiv, Synygy, and Callidus Software. It is a separate package from the accounting software, and requires a custom data feed from the accounting database, using the incoming data to build complex data tracking models that churn out exactly what each salesperson is to be paid, along with a commission statement. The best packages also allow for the “what if” modeling of different commission plan scenarios, as well as the construction of customized commission plans that are precisely tailored to a company’s needs, and can also deliver commission results to salespeople over the Internet. The trouble with this best practice is its cost. The software is expensive, and also requires consulting labor to develop a data link between the main accounting database and the new software. Thus, it is only a cost-effective solution for those organizations with at least 100 salespeople.