Author: Lizzy Wolff
Is your organization plagued by tedious and mistake-prone procedures, imprecise and delayed compensation computations, ineffective plan creation and administration, and absence of data analysis? This may mean that you’ve outgrown your commissions management tools.
You are likely aware of how vital managing commissions and incentives for your sales team is. Keeping them motivated and performing well is an ongoing task.
In the past, spreadsheets were often used to calculate and pay out commissions. However, modern technology, such as SPM software, offers advanced features and automation capabilities that significantly improve this process.
Our team at Canidium has been in the industry since 2008, so we have seen technology evolve. We have seen company after company make the switch from spreadsheets to a sales performance management platform.
This article will compare spreadsheets and SPM software, focusing on the incidental loss rates associated with each approach. By the end of this article, you will better understand how SPM software can improve your commission management process.
What is incidental loss?
Incidental loss refers to the potential financial losses incurred due to errors, omissions, or inaccuracies in commission calculations and payouts. These losses can occur when using spreadsheets or software systems, but the frequency and severity of such incidents may vary significantly.
Spreadsheets: A Breeding Ground for Incidental Loss
While spreadsheets have been the go-to tool for commission management for many years, they are inherently prone to errors and inefficiencies. Here are some common factors that contribute to incidental loss in spreadsheet-based commission systems:
Manual Data Entry
Spreadsheets rely heavily on manual data entry, increasing the likelihood of human error. Typos, formula mistakes, and accidental deletions can lead to incorrect calculations, resulting in underpaid or overpaid commissions.
Lack of Audit Trails
Spreadsheets lack robust tracking mechanisms, making it challenging to trace the origin of errors. This deficiency can hamper the identification and rectification of commission discrepancies, leading to delayed payments and potential disputes.
Version Control Issues
When multiple users collaborate on a spreadsheet, version control becomes an obstacle. Confusion can arise when different versions are being used simultaneously, making it difficult to maintain consistency and accuracy.
Limited Scalability
Spreadsheets may struggle to handle large volumes of data and complex commission structures. As businesses grow, the limitations of spreadsheets become more apparent, potentially leading to operational inefficiencies and increased incidental loss.
Sales Performance Software: Reducing Incidental Loss with Automation
Sales Performance Management (SPM) software is a technology solution designed to automate and optimize various aspects of managing and improving sales performance within an organization. Some of the features that directly impact incidental loss are:
Automated Calculations
SPM software automates commission calculations, eliminating manual errors associated with spreadsheet-based systems. Accurate calculations improve the reliability and fairness of commission payments, minimizing incidental loss due to miscalculations.
Data Integration
By integrating with various data sources, such as CRM systems and sales databases, SPM software ensures data accuracy and eliminates the need for manual data entry. Real-time data synchronization reduces the risk of errors and ensures up-to-date commission information.
Audit Trails and Transparency
SPM software provides robust audit trails, allowing businesses to track and trace commission calculations from start to finish. This transparency facilitates error identification, enables prompt resolution, and reduces the potential for incidental loss.
Scalability and Flexibility
SPM software is designed to handle large-scale commission programs and supports complex commission structures. As businesses expand or modify their commission plans, SPM software can adapt to changing requirements, reducing operational risks and minimizing incidental loss.
Learn more about reducing loss and risk
Commission management through spreadsheets may seem like the standard method, but it can be risky and limiting, leading to accidental loss. In fact, it is common that over time, the loss that occurs with manual data management eclipses the cost of SPM implementation.
SPM platforms provide automation, data integration, audit trails, and scalability, which minimizes the chances and effects of such losses.
At Canidium, we offer an array of SPM platform solutions, each serving a variety of companies in countless industries. With our consultative services, we help clients find the solution that can be tailored to their organization’s current and future needs.
If you’re interested in bringing SPM to your organization then check out this article on building buy-in and implementing SPM.
If you want to learn more about the resources that go into SPM implementation then read this article on 3 vital resources you’ll need.
Want to know about how your data will integrate with SPM software? This article will explain the value of and process behind maintaining clean data.
Want a risk-free consultation to better understand how SPM can reduce incidental loss in your organization ? Reach out to us using the form below!
Photo by Andre Taissin on Unsplash