Commission tracking using spreadsheet programs like Excel can be very tempting. Anyone can learn to organize and use spreadsheets, and starting with just a few commissions to track can make it seem like an easy, pain-free process. Excel even has a template and commission calculator, making it even more tempting to go-it alone and track things yourself.
While spreadsheets may work for commission tracking in small organizations with a basic compensation plan structure, commission spreadsheets can be labor-intensive, error-prone, and impossible to scale when the organization grows. Here are the top six reasons your commission spreadsheets will fail you at scale and why you should modernize your commission management plan today.
Designing and Maintaining your Commission Spreadsheet can be Labor-Intensive
Setting up plans in commission spreadsheets can be incredibly labor-intensive, especially the bigger your organization is and the more complicated methods of compensation plan management you employ. Designing your commission spreadsheet will take work and thoughtful attention to detail. Commission plans can be organized as bulk or individual spreadsheets, meaning you either have every one of your sales representatives listed in one spreadsheet or every rep has their own tabbed spreadsheet. In bulk setups, sorting through every single employee can take valuable time and you may need to create a new spreadsheet every month or any time something needs to be modified. Adjusting, modifying, or creating an exception can be near impossible if you do not want it applied to every sales rep in your spreadsheet. In individual spreadsheets, time is again used to scroll through tabs for individual representatives and changes or exceptions cannot be batched across the entire team. Advanced plans including bonuses or accelerators may require advanced equations, increasing time, labor, and risk for error.
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Commissions Tracked in Spreadsheets by Hand can be Error-prone
As the size of your organization increases, the probability of an error in a spreadsheet that tracks commission becomes greater and greater. Human error will occur and mistakes might include a mistype or the use of an incorrect spreadsheet cell. If sales representatives find errors in their pay or incentives, they lose trust in the process or in management. All of the benefits of having a commission plan in place to motivate and drive sales disappear. Additionally, sales representatives may feel like they need to spend their own time calculating and double checking their commission payments. This is not how you want your representatives spending their time.
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Commission Plan Templates and Spreadsheets are often Inflexible
At scale, spreadsheets that were once designed for fewer employees may not function the way they need to as the organization grows. As models for commission, reimbursement, or incentives change, spreadsheets must grow in complexity to keep up with the demand. This can lead to the need for extra time, delaying compensation or increasing the risk for mistakes and errors. It is also important for sales organizations to keep up with market changes and to employ creative strategies for representatives to react with these changes. Companies must have the flexibility to pay their sales team in ways that motivate and react to market changes, and spreadsheets simply do not allow for this.
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Limited Transparency can Exist in Commission Spreadsheets
The more complex a compensation plan is, the more difficult it can be to have complete transparency for each and every member of your sales team. Data that comes from multiple spreadsheets makes it difficult to compile a total story and can lead to more room for errors. Errors that are made can take time to manually search for as well as in the financial corrections. Additionally, bulk spreadsheets cannot be shared as individuals should see only data pertaining to them.
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New Employees and Company Growth can Impact Timely Commission Disbursement and Continuity
Every business using commission spreadsheets has a person that is in charge of organizing and calculating the compensation plans. Often, these people have their own style and methods for generating commissions. If the employee filling this role changes, it can take weeks or months to get new employees up to speed on spreadsheet organization. Commissions could be delayed with the onboarding of these new employees. Commission plans are often complex, and their maintenance hinges upon clear documentation as well as clean and well-organized data. This must be transferrable to any new employee taking on the spreadsheets to ensure timely commission disbursement and continuity.
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Commission Spreadsheets are Impossible to Scale
As a company expands their sales team, spreadsheets become more complicated. As companies seek to add competitive compensation plans, spreadsheets become more complex. If a company wants to be competitive in today’s market, they must have strong compensation management for the members of their team to incentivize and garner trust. A plan that is not scalable is, at best, a band-aide fix, and at worst, represents a company that does not strive for growth.
Take a step into automatization
I know what you are thinking. It may be time to modernize and automate your commission management strategies. Blitz can help. With our sales commission tracking software, we provide accurate and automated compensation plan management.
You and members of your team can get real-time information all day from your phone with our Blitz Commission Tracking App. Contact us today for more information about how we can simplify your compensation plan management.