Sales Commission Tracking: Ultimate Software Guide

The ultimate goal of every sales team is to sell more, of course! If you incentivize your sales team with commissions, then you’re likely aware of the challenges that brings upon your accounting team. Sales commission tracking doesn’t have to be a drag. 

In fact, with the best commission software in tow, like that which SolveXia delivers, your accounting, sales, and operations can be optimized without hassles. 

We’re going to dive into what makes sales commission tracking software a must have for any business that offers commissions. 

Coming Up

What is Sales Commission Tracking?

How Does Sales Commission Tracking Work?

Should You Track Sales Commissions Manually?

How to Track Sales Commissions?

What is a Commission Pool?

How to Record Commissions on a Balance Sheet?

What is Sales Commission Tracking Software?

What are the Benefits of Sales Commission Tracking Software?

What is the Best Sales Commission Tracking Software?

How to Improve the Sales Commission Tracking Process?

Closing Thoughts

What is Sales Commission Tracking?

Sales commission tracking is how organizations monitor what sales have been made that correspond to the payout of a commission to the salesperson responsible for the transaction. Sales commission tracking also ensures that your sales team gets paid what they have earned at the expected time. 

How Does Sales Commission Tracking Work?

Sales commission tracking monitors performance and payouts. It all starts with records of transactions, which include the purchase, sales price, any discounts applied, and the relevant commission rate per sale. This way, salespeople and managers can oversee how much each salesperson has earned in a given period of time. 

Sales commission tracking naturally can become more complex as the volume of transactions and salespeople on your team grow. That’s why it’s so helpful to have a software solution like SolveXia in place, which can automate your sales commission tracking process and be customized according to your commission structure. 

Should You Track Sales Commissions Manually?

It is ill-advised to track commissions manually for several reasons, including that it is:

• Error-prone 
• Time-consuming
• Hard to scale 
• Hard to track 
• Disconnected 
• Relies on key person dependencies
• Causes bottlenecks 

Rather than having to manually input data and perform calculations, your finance and accounting team could better spend their time on high-level tasks as sales commission management software automatically takes care of the details. 

How to Track Sales Commissions?

There are three main ways by which you can track sales commissions, which each come along with their share of pros and cons. You’ll be able to clearly see why using sales incentive software is the best choice. 

1. Manually

The oldest and most time-consuming way to track commissions is by hand. This requires that someone enters each sale and performs calculations. It is incredibly risky because not only is it a slow process (which can cause delays in payouts), but it is also prone to mistakes.  

2. Spreadsheets

The use of spreadsheets can help speed up things a bit, but it still leaves much to be desired. Spreadsheet-driven commission tracking requires accurate data entry in order to apply formulas to correctly calculate commissions. However, spreadsheet data is not always up-to-date or accessible to those who need it. 

3. Software

Software solutions, like SolveXia, offer the most seamless experience for sales commission tracking. It can connect all your data across systems, perform calculations in seconds, and protect data’s accuracy and security. Solutions like SolveXia also add a layer of visibility, standardization, and scalability to your organization’s practices. 

What is a Commission Pool?

A commission pool is a compensation plan in which a portion of the company’s revenue is pooled together and distributed to sales team members based on performance. The intention is to incentivize sales reps to close more deals as it aligns their incentives with that of the company’s. 

How to Record Commissions on a Balance Sheet?

Typically, commissions are recorded on the income statement as an expense (period cost) rather than the balance sheet. However, when commissions are recorded on the balance sheet, they may be recorded as a liability if the company has unpaid commissions. 

What is Sales Commission Tracking Software?

Sales commission tracking software is a tool that automates the recording and calculations of commissions. This type of software not only handles even the most complex commission structures with ease, but it also helps sales team members better understand and track their own performance and accounting teams to pay commissions properly and on time. 

The best commission software integrates with existing systems and is customizable. 

What are the Benefits of Sales Commission Tracking Software?

Using sales commission tracking software alleviates the many burdens that tend to plague accounting teams that have to oversee commission structures. 

To name a few benefits, sales commission tracking software aids in:

1. Reducing Mistakes

Without the need to manually enter transactions and perform calculations by hand, there is a grand reduction in mistakes that are made. 

2. Lowering Costs

Despite the initial investment in adding a sales commission software to your business, you’ll end up likely saving money over time because it will take less of your team’s time to calculate commissions. 

Additionally, accurate payouts ensure that your employees are more satisfied and less likely to become frustrated or leave the company because of paycheck inaccuracies. 

3. Boosting Profits 

Software helps your sales team visualize and track their goals, which can increase their productivity. In turn, this boosts profits as more sales are made. 

4. Increasing Transparency 

Sales commission software keeps everyone up-to-date on commissions in real-time. This helps management and stakeholders, as well as employees, to see how sales are trending. 

What is the Best Sales Commission Tracking Software?

Ready to explore and select the best sales commission tracking software to boost your business? We’ve compiled some of our favorite options. 

Take a look:

1. SolveXia

SolveXia is a low-code platform that automates spreadsheet-driven data and complex finance functions, including commissions and rebate management. 

SolveXia connects your existing technologies, including legacy systems, to provide a centralized repository for all your company’s most important data. It can record sales and perform calculations with total accuracy in seconds. 

SolveXia paves the way for streamlined workflows, increased internal and external compliance, access to reports and customizable dashboards, and is scalable as your business grows. 

Automating commissions means that you can set different commission rates for various services and products, tiered commission structures, bonuses, and overrides, and the software will take care of where and when to apply it. 

Of course, this means you can rest assured knowing all your commissions are correct and error-free. At the same time, all stakeholders and sales team members gain access to visibility in real-time, so that adjustments can be made quickly, if needed. 

Once set up, there’s no need for a dedicated IT team, as anyone can customize and design automated workflows and dashboards using drag-and-drop-functionality. With SolveXia, teams can execute processes 100x faster with 90% less errors, remove key person dependencies, prevent bottlenecks, and ensure customers and employees are satisfied. 

SolveXia is expertly designed to aid finance teams and automate critical processes so that your finance department can allocate their time to high-level and value-add tasks, rather than repetitive, data-heavy, and time-consuming tasks. 

You can use SolveXia to automate critical processes, such as rebate management, sales commissions tracking, reconciliation, expense analytics, regulatory reporting, and more. 

2. Blitz

Blitz offers automated commission management to save time and increase accuracy. Through a centralized platform, you can remove the need for disconnected spreadsheets and enable collaboration organization-wide. 

3. ElevateHQ 

ElevateHQ enables accurate and timely payouts of commissions with calculations, analysis, and the elimination of any redundancies. It provides a payout simulator to test different commission structures before deploying them. 

4. Spiff

Spiff is another commission management software that is focused on delivering transparency within a business’ commission planning and execution. Designed similarly to a spreadsheet, Spiff automates compensation plans and calculations to streamline workflows and payouts. 

5. Performio 

Performio’s sales performance management tool is geared towards maximizing your sales team’s productivity and results. You can use the software to run calculations, import data, integrate with other software, and visualize performance reports and dashboards, to name a few features. It is intended for enterprises. 

How to Improve the Sales Commission Tracking Process?

Improving your sales commission tracking process doesn’t have to be an overwhelming endeavor. You can start with small changes that can create a large and beneficial impact. Here are a few best practices:

Standardize Your Process 

Having a clearly defined commission tracking process makes it easier on everyone who is involved. Policies should be set in place and documented, such that if any issue arises, there’s a clear plan of action that should be taken. 

Customized Reporting  

Providing customized reports and dashboards per employee helps them stay on track for their goals, rather than having to sift through co-worker’s reports. The best commission tracking software has this as a built-in feature. 

Automation

It is undeniable that the best shift you can make for sales commission tracking is to automate the entire process with a sales commission tracking or finance automation software. 

This way, you can save time, boost accuracy, eliminate inconsistencies, increase transparency, and best serve your finance and sales teams. 

Closing Thoughts 

Sales commission tracking is necessary for any company that pays commissions to its sales teams. With sales commission tracking software, it becomes seamless and simple to track sales, calculate commissions, and pay your team what they deserve on time. Similarly, stakeholders and management have a clear view on how the commission plan is working in real-time. 

To check out how a commission tracking software tool like SolveXia can help you, we invite you to book a demo today!