Sales Commission Management: Best Solutions & Tips

When running an organization that provides sales commissions, the two most important considerations are answering, “What is a good commission rate for sales” and putting in place effective sales commission management to take care of employees and the business. 

In order to have a streamlined sales commission system, you must find and deploy the best sales commission software. We’re going to look at all the ins and outs of sales commission management and review how sales commission management software, like SolveXia, can be a game changer.

Coming Up

What is Sales Commission Management?

What are the Basics of Sales Commission Management?

What are Common Challenges of Sales Commission Management?

What is a Sales Commision Management System?

How to Implement Sales Commission Management Effectively?

How to Ensure Fairness and Transparency in Commission Management?

Why Automate the Sales Commission Management Process?

What are the Benefits of Sales Commission Management Solutions?

What are the Key Features of Sales Commission Management Solutions?

How to Choose the Best Sales Commission Management Solution?

Closing Thoughts

What is Sales Commission Management?

Sales commission management refers to the administration, oversight, calculation, and distribution of commissions to salespeople based on their successful sales. 

Sales commission management promotes transparency, accuracy, and timeliness of payments and analytics to ensure that the sales commission structure is designed optimally. 

What are the Basics of Sales Commission Management?

There are a few basics and best practices involved in practical and efficient sales commission management. These include:

1. Set Clear Goals 

Offering commissions to your sales team is in an effort to achieve specific business goals, such as boosting sales, increasing retention, etc. Depending on what you’re looking to accomplish, you can design a commission structure that promotes that outcome. 

2. Determine the Structure 

Select the commission structure that you want to deploy, whether it’s volume-based, value-based, shared territories, etc. This resource dives into some of the most common types of rebates. 

3. Set a Competitive Commission Rate 

Every industry has its own benchmarks for typical commission rates. It’s important to know the national average so that you can choose a commission rate that is competitive enough to retain your workforce. 

4. Pay Timely 

Perhaps most crucially is the need to pay commissions on time. This way, salespeople remain motivated to keep producing. If you’re managing sales commissions manually and with disparate spreadsheets, it’s likely you’ll face delays and mistakes. 

With a sales commission management software in place, like SolveXia, you can automate and streamline the process, ensuring timely payouts. 

What are Common Challenges of Sales Commission Management?

Managing sales commission manually is filled with its fair share of challenges. Companies tend to face the following hurdles when doing so:

1. Error-Prone 

Manual processes tend to result in manual errors, especially when it comes to figures and numbers. Plus, commissions rely on calculations, so mistakes are inevitable when being done by hand. 

2. Lack of Visibility

With manual processes and a reliance on spreadsheets, information is quite literally all over the place (across desktops, printed papers, and even office locations). 

Not only does this make it difficult for accounting teams and managers to oversee the commission program, but it also results in a lack of transparency for the sales team to track their own progress. 

3. Hard to Scale 

Foundationally, commissions are intended to boost sales. However, when you do boost sales, you’re going to have to calculate more commissions and keep track of a greater volume of transactions. A spreadsheet can only handle so much. 

4. Time-Consuming

Manual data entry and calculations ends up being very time-consuming on your accounting team. 

There’s better use of their time by allocating their efforts toward value-add activities. But, when they are bogged down manually dealing with commissions, they are stuck in their repetitive tasks.

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SolveXia’s sales commission management system resolves all of these challenges automatically. Its cloud-based automation platform integrates with your existing systems to gather commission-related and rebate management data, performs complex commission calculations, adds visibility into earnings for everyone involved, and streamlines workflows. 

What is a Sales Commision Management System?

A sales commission management system is software that helps to track sales and employee commissions. The technology simplifies the entire commission structure from start to finish. 

This means that it aids in the setup, such as defining contract negotiations and terms. Then, it is used to track sales per employee, automate commissions calculations, match commission formulas to their relevant sales, and reconcile accounts before paying out the commissions. 

With the software’s ability to streamline the entire process, your accounting team can free up their time rather than being consumed by manual and data-heavy tasks. 

Additionally, your sales team gains visibility into how their sales are tracking, along with the commissions they can expect. Last but not least, your management team can oversee how the commission structure is faring for the business and if it’s on track to meet its intended goals.

How to Implement Sales Commission Management Effectively?

The headaches of sales commission management can be solved! Wondering how? 

Let’s take a look at what you can do to ease your processes:

1. Simplify Wherever Possible

It’s best to start off on the best foot, which in practice means to set a commission structure that is fair, simple, and clear for all involved. 

2. Leverage Technology

Undoubtedly, the greatest asset to any business dealing with sales commission management is to use finance automation software. 

Finance automation software like SolveXia helps to streamline all commissions-related workflows, and also automates key finance functions, including: reconciliation, regulatory reporting, expense analytics, and more. 

3. Review & Adjust

Keep an eye on how the commission structure is affecting sales. If need be, you can adjust the structure. Sales commission management software makes this easy to do as it adds agility and analytics into the picture. 

How to Ensure Fairness and Transparency in Commission Management?

Along with accuracy and timely commission payments to your sales team members, it’s vital to be fair and transparent throughout the process. 

Fairness equates to treating all representatives equally, and transparency means that sales reps along with management have visibility into commissions. For the sales team, these are the factors that help to keep them motivated and content in their roles. 

With sales commission management software, there’s no favoritism applied, all calculations are black-and-white and set up according to the intended structure. 

The accessibility to real-time data ensures that everyone is on the same page. 

Why Automate the Sales Commission Management Process?

Automating your sales commission management process adds value for stakeholders, employees, and even customers in the end. 

Here’s how and why:

• Commission calculations are accurate and occur in a timely manner 
• Sales team members and management personnel can access real-time data to track performance 
• There is no siloed data 
• You remove key person dependencies and bottlenecks so sales team can be paid on time 
• Your accounting team can save time and mistakes (ultimately and potentially leading to improved retention within that department) 
• With a more satisfied sales team, representatives are better able to service customer needs 

What are the Benefits of Sales Commission Management Solutions?

Saving time, saving money, reducing mistakes– sounds great, right? Sales commission management solutions offer all of this and more. Let’s take a look at how the features work in your organization’s favor. 

1. Clear Commission Tracking

With a solution like SolveXia, you’ll never have to second guess your calculations again. Instead, you can rest assured knowing that every sale is tied to its corresponding commission payout with total accuracy. 

2. Quick Calculations

As your business scales and transaction volume grows, manually calculating commissions becomes increasingly difficult and time-consuming. Automation software can scale with your business’ growth, without sacrificing the speed and accuracy of calculations. 

3. Streamlined Reporting 

Sales leaders can easily access automatically generated reports to keep an eye on how their team is performing. This also enables agile and informed decision making capabilities, should any adjustments to the program need to be made. 

4. Boosted Transparency 

Everyone can track their own performance and progress, giving more power and agency to your sales team to take control of their own potential. 

5. Easy Integration 

Top-notch sales commission management software such as Solvexia integrates with your existing systems to centralize data in a unified repository. 

6. Improves Compliance 

You can leverage technology to help with internal control when it comes to compliance for regulations and tracking. 

What are the Key Features of Sales Commission Management Solutions?

Every sales commission management solution has their own suite of features and functionality. 

When determining the best software for your business’ needs, there are some key features you’ll want to have to get the most out of the technology. 

Here’s a few things to look out for:

1. Reporting and Analytics 

Seek a tool that offers customizable reports and analytics, so you can design reports per stakeholder. 

2. Notifications and Alerts

To avoid bottlenecks, it’s best to find a software that can send automated alerts and notifications to relevant parties when an action is needed to be performed, such as an approval for payment. 

3. Integration

It’s integral that your commission tracking software is able to work with your existing technologies, such as a CRM or accounting software. 

4. Incentives

Look for a tool that provides the ability to set incentive payouts with rules, including the frequency of commission payments. 

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A commission management solution like SolveXia provides all of these features and more. With SolveXia’s easy-to-use interface, once it’s set up, there’s no need for a dedicated IT team to be able to use it. SolveXia’s automated commission capabilities help to streamline your processes, improve compliance, increase visibility, and enable productivity. 

How to Choose the Best Sales Commission Management Solution?

As your traverse the market seeking out the best sales commission management software, here’s a checklist of important questions to ask to find the tool that suits your needs:

• How complex is your sales commission structure? 
• How big is your sales team? 
• What level of ease-of-use is needed? 
• Can the tool scale as your business does?
• Is the solution compliant to your country’s regulations? 
• What is your budget?
• Does the solution integrate with your existing tech stack?

A commission solution like SolveXia can suit your business’ needs and goals. Interested to ask specific questions and find out if that’s the case? Request a demo and see how it can help your finance team. 

Closing Thoughts 

Sales commission management is pivotal to ensuring the success of your sales commission program. Since all roads lead back to sales and profit, it should be a priority to manage effectively. 

And, the great news is, finance automation tools like SolveXia make it seamless and painless to do so. The time is now to increase productivity, streamline commission workflows, and automate your primary finance functions!