Why is it necessary to automate your sales incentive compensation?

Why is it necessary to automate your sales incentive compensation?

The recent changes in the business landscape and economy due to the global pandemic have made a lot of companies re-think, re-evaluate and modify their compensation plans to meet the employee motivation parameters of the current times.

But the problem here is that these incentive plans are maintained and managed through spreadsheets. Processing the data of the employees and their compensations in spreadsheets is complicated. because it is a manual process that is slow and error-prone. On top of this, the constantly changing

  • Organizational structure
  • Territories
  • And sales plans

make it even more difficult to get an accurate view of payout results.

“A recent survey conducted by Varicent, an IBM Company, revealed that
  • 75% of organizations with 1,000-2,500 employees currently calculate commissions using spreadsheets (sometimes in combination with other solutions)
  • And 90% of those recipients admitted that they were dissatisfied with this method”

Apart from this, the survey also revealed that whenever the senior management of an organization asks to review and modify the incentive programs, compensation administration costs shoot up as more manual processes and spreadsheets are layered onto a broken backbone of compensation systems.

The solution to this problem

The best solution to tackle this problem is to invest in software that automates the incentive compensation process. Investing in sales compensation software can help you in 3 major ways-
  • You do not need to hire multiple resources or compensation professionals to manage your sales compensation. Everything can be managed by your sales leaders or managers with the help of a sales compensation management tool.
  • Manually managed sales compensation plans often invite manual errors and complexities in payouts. By using the sales commission software you can automate every sales commission works and keep all the commission activities
    • On-time
    • Error-free
    • And perfect
  • By automating your sales incentives with powerful sales incentive management software you can bring sanity and peace of mind to their sales commission process sales compensation professionals.

Note: According to the reports, 95% of companies who use sales compensation technology have payouts completed in less than 6 weeks, with the majority under 3 weeks.

Benefits of automating your sales incentive compensation process

Here are some benefits of using a sales compensation automation platform:

1. Keeps the data up-to-date

Your compensation professionals or HRs need data related to the,
  • Sales payout plan
  • Sales incentive plan
  • Each employee’s performance results
  • Personnel information of each employee
  • And what variable pay is each employee subject to In order to calculate their payouts
Typically, this information is stored in multiple, disparate data sources, and is collected and collated manually. But an automation software helps to not only gather and combine all this data quickly and more accurately but also helps to ensure up-to-date information from sales, finance, and compensation professionals.

2. Calculating incentives becomes faster and error-free

Without the incentive automation software, the compensation analysts often go through a rigorous and time-consuming process of manually calculating each employee’s compensation for each pay period. It also takes a great amount of time and effort to verify the accuracy of the calculations whenever they modify any formulas in a spreadsheet. So automating this step helps to avoid
  • Manual labor
  • Overpayments from calculation errors
  • Re-evaluations and corrections

3. Distribution of payout results becomes easier

A significant amount of manpower is required to deliver personalized payout results and commission statements. When compensation professionals use traditional spreadsheets, they tend to avoid this hassle by releasing only minimal information to the recipients.

By using compensation automation software, you can eliminate these tedious chores for your compensation professionals and enable payees to receive detailed payout results, down to the transaction level. This, in turn, helps to reduce payment disputes and shadow accounting.

4. Improves the workflow of compensation professionals

Without an incentive automation software, your compensation professionals/ HRs and employees have to deal with a lot of back and forth of emails or phone calls about the,
  • Employee sign-offs
  • Request approvals
  • Inquiries
  • Disputes etc
An incentive automation software, on the other hand, centralizes and automatically routes all these requests, queries, and documents to the appropriate parties. By automating this process your compensation professionals can get better visibility into every event related to each employee. This helps both the compensation professionals and the employees to exercise the compliance policies better.

5. Accurate, timely payouts build trust

By automating the payment process you can improve the accuracy of your payouts and employ the best practices of rewarding your employees promptly and reliably. This, in turn, builds trust and reduces “shadow accounting” so your sales reps can spend
  • Less time checking the math of their compensation
  • And more time selling your products
This way when your payments are prompt and accurate you not only build trust amongst your folks but also enhance motivation across your sales team.

6. Flexibility to execute diverse sales compensation plan

As a modern-day business owner, you must be constantly looking out for quick sales results and growth. To manage your dynamic sales efforts and to motivate your sales teams, do you often try out-of-the-box and unique sales compensation strategies? Then a sales compensation software could give a big boost for your endeavors. It not only automates the sales commission payouts but also helps you to create exciting, customized, and complicated sales commission strategies.

Powerful sales compensation software helps you to meet all your commission needs, no matter how complicated or innovative they are. With the robust sales commission software, you can create

  • Revenue or product-based commissions
  • Flat or tiered commissions
  • Recurring commissions
  • Split commissions
  • Step up and step down commissions
  • And even matrix commissions

Want to design and implement a perfect sales incentive plan at your organization? Read these blogs below:Permalink

Best Practices to Design your Sales Incentive Plan

Best practices to Implement a Sales Incentive Plan

How Gamification can help to take your Incentive Plan to a whole new level?

Looking for some interesting sales incentive ideas? Check out this blog below:Permalink

23 Sales incentive ideas to keep your sales team motivated

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