7 Signs Your Business Has Outgrown Commission Spreadsheets
When a sales team is small and the commission structure is simple, spreadsheets can be helpful. They’re affordable, well-known, and easy to set up. However, manually handling commissions can be challenging when a business expands.
A simple spreadsheet can become a time-consuming source of errors with more salespeople, varying commission rates, fluctuating goals, bonuses, and data from multiple systems.
If you recognize any of the following symptoms, then you may be using spreadsheets to manage your business’s commissions that are reaching the end of their usefulness.
When Commission Spreadsheets No Longer Serve Your Business
You can get an automating commission tracking for a small sales team to avoid defects of spreadsheets. Pay attention to the following; they show you when your business has outgrown commission spreadsheets.
Expanded time to calculate commissions
If your finance/sales operations team still needs to work for hours each month to compute commissions, you may want to question the process’s efficiency.
Sales data collection, checking deals, applying different rates, and calculating payouts can be time-consuming tasks. The more salespeople you have, the more work you’re going to have.
Automating repetitive calculations can free up your team’s time to focus on more value-added tasks.
Increased frequency of errors
It is easy to make a small mistake in a spreadsheet that could result in a miscommission payout. This is especially difficult when more than two rates, bonuses, thresholds, or adjustments are applied in a calculation.
Common mistakes can create unnecessary work for finance teams and frustration for salespeople. If you frequently need to double-check formulas and/or commission numbers, your current process may not be accurate enough.
Salespeople don’t believe the figures
Commission transparency matters. Salespeople want to know how their commission is computed and what they must do to achieve their goals.
In situations where commission is stored in complex spreadsheets, it can be hard for salespeople to check their numbers. This can lead to questions, arguments, and frustration during payroll. A clearer system makes commission information easier to access and understand.
Your commission plans become complicated.
Simple commission structures are quite simple to do on paper. Issues can occur when the business implements different plans for different teams, accelerators, bonuses, quotas, territories, or product-specific rules.
As rules get more complex, entering them in a spreadsheet can lead to complex formulas that are hard to keep up to date. What was once a valuable asset can turn into a liability as the business grows.
You’re getting data from multiple systems.
Modern sales teams use many tools, such as CRMs, billing platforms, accounting software, and more. Your team has more time to mis-enter data when they have to manually pass it from one system to another to calculate commission.
If you are constantly exporting, copying, pasting, and reconciling data, this is a clear indicator that your commission process requires a more holistic approach.
There are more commission conflicts
Commission disagreements can be a huge distraction. Revenue staff might question the accuracy of the sales transaction, whether the target was met, and how certain payouts differ from what they expected.
If these arguments are common, it could be something other than the sales team. The absence of a clear and consistent commission structure might be to blame.
Your sales team is expanding at a rapid rate
Growth is a great issue to have; however, it could reveal weaknesses in manual processes. If a spreadsheet can be used effectively with five salespeople, it can be very challenging with 50 or 100.
Commission management must be scalable as the team expands. Calculations and linking to sales figures can be automated so businesses can handle more complexity without adding to the administrative workload.
Conclusion
Spreadsheets don’t have to be bad. For businesses with a simple commission structure, they may be just fine for small businesses. The difficulty arises when growth becomes so complex, time-consuming, and/or error-prone that it becomes difficult to manage.
