Excel or Google? Tough choice! And when it comes to calculating sales commissions, there’s more to consider. The only thing true is that it’s a time-consuming process that can also generate errors and stress.
But don’t worry, you might not be the only sales manager or director dealing with this complexity. In fact, an International Data Corporation survey found that nearly two-thirds of companies run various payment processes, like commissions, via Excel.
Spreadsheets and Excel are the go-to tools for many companies when it comes to tracking and managing commissions, but even if they deliver the convenience needed, the disadvantages of manual commission management are directly related to human errors and lots of time.
In the same way, spreadsheets can be a perfect solution to start calculating sales commissions for a small team of 10 reps or less, but they can become exponentially more difficult to manage for larger teams.
1. Time-consuming tasks
One thing is for sure: It takes a lot of time and effort to calculate commissions using spreadsheets, which is one of the main disadvantages.
When you have a small team and a straightforward pay structure, it might work just fine, but as your team grows, you'll find that managing the commissions of your sales reps requires scrolling through hundreds of rows and manually extracting far too much data.
Likewise, every pay cycle will also require a fresh spreadsheet from you. This frequently involves copying all the sales records, together with the formulas and tables required to calculate commissions and account for any modifications, into the new spreadsheet.
The time required to copy and modify each individual spreadsheet file increases together with the size of your team and the complexity of your sales comp plans.
2. Time-consuming distribution process
The spreadsheet itself involves a great deal of work. They must be customized for sales each representative and must not contain any other person's private information. This results in a lack of transparency in commission calculations and longer wait times for reps to get information about the commissions they are generating.
3. Poor scalabiity of spreasheets
As mentioned above, spreadsheets are only useful for calculating commissions when there are very few sales representatives, and your commission management will require more work and time as your team expands. And, as you use more data or algorithms, it will become easier to make mistakes.
4. Lack of integration with other systems
When it comes to handling commission data, spreadsheets typically lack any natural ability to integrate with other systems. This means that to enable such integrations, you will either need to use third-party solutions, or you would need to manually copy commission data to other platforms and systems.
5. Errors generated for manual data entry
All the manual copying, editing, and managing of data in commission calculation spreadsheets inevitably lead to human errors. And if even one piece of data is entered improperly, the intricate algorithms you'll be employing will lead to inaccurate calculations.
Spreadsheets are also notoriously difficult to troubleshoot, and if you make a mistake, you will spend hours trying to correct it or dealing with any dispute, or the eventual need to fix this.
Even if spreadsheets meet your specific needs or fit the requirements of small businesses that manage simple commission structures, you should be aware of their limitations.
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Additionally, Blitz connects seamlessly with all the systems and platforms your team currently relies on, providing accurate and seamless commission management.