Sales managers can use a variety of tools to track and manage sales compensation, ranging from traditional paper records to Microsoft Excel spreadsheets. However, if they want to minimize any hardships, businesses may want to consider using software platforms specifically designed to take care of sales compensation management.
According to a recent survey conducted by Varicent, approximately 70 percent of companies use spreadsheets to track sales payments and commissions. At the same time, approximately 90 percent said they were not satisfied by these solutions. On the other end of the spectrum, nearly half of custom software users said they were very satisfied by their management programs, and one-quarter said the same about packaged software solutions.
The perks of incentive compensation management
Incentive compensation management (ICM) solutions are useful for a variety of reasons. First and foremost, they reduce the chances for errors significantly. When sales managers are using their own custom-made spreadsheets, there is a possibility they may input wrong data, which could compromise the accuracy of payment reports and commission numbers. Dedicated solutions have a number of built-in safeguards to prevent this from happening.
Additionally, the right software solution can expedite the commission process by automating several processes and procedures. This saves sales managers time, allowing them to take care of more mission-critical tasks.
"Delivering timely, accurate and trustworthy compensation data to the sales reps, managers and executives of an organization significantly reduces the lost time on their part trying to jostle their data, freeing them up for more time selling and meeting with customers," the report adds. "Additionally, with accurate payout results and comprehensive sales statistics, managers are able to directly correlate compensation and performance metrics in order to better understand and drive employee behavior."
If there is one concern frequently tossed out by those still using traditional spreadsheets and other older compensation management solutions, it's the cost associated with upgrading new systems. Buying licenses and taking time to learn new technology can cost money, they argue.
The fact of the matter, however, is that these solutions can save money in the long run. Even if ICM software only saves a few hours per week – although it frequently saves much more – that can lead to thousands of dollars' worth of billable hours being reduced and allocated elsewhere.