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Sergio Zuniga 03.22.2022 5 min read

How to eliminate shadow accounting through commission automation?

For a sales professional, it is sometimes quite normal to feel that 24 hours in a day is simply not enough. They constantly juggle several activities while striving to clinch clients and close deals. Among the activities they juggle to keep the sales high is shadow accounting: a process through which a sales professional keeps a tab on their commission and incentives to double-check their payouts parallelly. This painstakingly time-consuming process is a sinkhole for productivity and study in redundancy.

While shadow accounting helps sales representatives erase their concerns over accuracy, punctuality, and the complexity of the calculation process, among others, it places an added burden on their shoulders. This eats into their time, affects productivity, makes them less effective, and most of all is a marker of trust deficit. Let’s explore the nitty-gritty of shadow accounting, its impact on sales departments, and how commission automation is an antidote to this practice. 

What causes shadow accounting?

Lack of transparency

A lack of visibility is one of the key reasons for shadow accounting. When sales representatives feel there is no transparency in the sales compensation payout process, they start keeping a track of the work they do.


This can stem from a lack of trust in fellow employees or technology. When sales representatives don’t trust their management or the inept technology used by the company, they start investing time in maintaining their reports.

Delayed payments

A company that delays payments runs up a massive backlog. This can lead to confusion when the payouts are eventually done.

Erroneous payouts

Keeping a track of all transactions allows the sales rep to fix any anomaly. This is especially prevalent when the payments are manually processed. 


How does it affect your sales team?

The more time sales reps spend on non-sales tasks, the more opportunities they miss. Shadow accounting robs your team of the time and energy to chase and close deals. Managers and reviewers can also be guilty of shadow accounting, especially when they feel the sales reps are not being transparent in their transactions.

As a result, This leads to the higher management spending time in manual audits rather than concentrating on the overall growth of the sales team.

Shadow accounting can lead to several unwanted disputes within the workspace, creating a negative work environment. This leads to a lack of collaboration and trust within the sales function, and decreased productivity.

How can you eliminate shadow accounting?

Commission automation removes the manual element from the commission management and payment process. It increases the visibility, accuracy, and timeliness of the compensation process. By removing manual intervention, it leaves no room for payment delays and inaccurate payouts.

The commission tracking software automatically picks out the relevant data and makes accurate payments regardless of the complexity of the compensation plans. Seamless workflows that accurately distribute payment tasks expedite the process.

The platform also provides the sales reps with increased visibility through automated personalized compensation and performance reports. It gives the management the flexibility of checking team performance and enables better sales and revenue planning. With the platform efficiently and faultlessly managing the entire compensation process and automating payouts, the need for shadow accounting drastically reduces. 


In conclusion:

With commission automation, your sales team is free to invest time in forward-thinking, sales-building activities. The company also benefits significantly, as there is no need for full-blown audits to check the veracity of the numbers. It wipes out errors and delays and helps build trust, leading to a more collaborative environment that thrives by sharing knowledge.

Do you want your company to be shadow-accounting-free? Contact us today to automate your commission payout process.