Consider the potential complexities of commission payments
Complex and frequently changing sales commission plans are common among iSOFT clients, and it’s a good example of an area where customization of your system can really pay off to save you time and eliminate recurring exceptions and calculations.
Here’s a sample of some of the commission tracking methods our clients use:
- Multiple people get different commissions for the same sale. For example, we’re working with a new client in the insurance industry that pays one commission to the person in the field who initially estimates how much a claim will settle for, and another commission to the insurance adjuster who later finalizes the estimate.
- Pay different commission percentages depending on the type of product sold, or depending on the type of customer, industry or territory sold to.
- Pay different commission rates for salaried versus straight-commission salespeople.
- Some commissions get paid through payroll while others go through AP.
- Pay a mix of flat rate, percentage, and/or tiered commisstion rates.
- Subtract AP invoices before calculating commissions.
- Pay commission rates that are based on different portions of the sale. For example, a salesperson gets a percentage off the top, and someone else gets a percentage of the remaining order value after the first commission is subtracted. Another example: We’ve seen more of our clients bundling the freight cost into their product pricing so that they can promote Free Shipping to customers—but they don’t pay commission on the portion that is the actual or estimated freight cost.
- One of our clients, a high-end furniture manufacturer, pays commissions quarterly. It’s critical for their salespeople to be able to see their accumulated commissions in real time, and for their managers to see up-to-date forecasts for the current quarter’s commissions.
- Pay extra commission for short-term spiffs; lower commission rates when products are on sale; higher commission rates for new accounts; higher rates for subsequent orders once a sales quota is reached.
- Pay commissions based on profit margin instead of order value, or a mix of both.
Complex? You betcha.
If someone’s tracking this level of complexity in Excel and then updating AccountMate manually, it can be a never-ending game of catch-up. Plus commission plans change often to respond to the market or to support the latest company sales goals.
This is the perfect situation to delegate to AccountMate so it can handle everything automatically, in real time, with accuracy. Exactly the way you want things to be calculated. After all, AccountMate is the world’s most flexible accounting system.
Imagine you’re flying a drone slowly across your entire company
From that drone you can look down on each department to spot any complex processes that have become gnarly or costly. Where can you see places that automation could bring relief and remove bottlenecks?
Reach out to iSOFT, your technology partner, to talk through your complex rules or process. We’ll let you know what AccountMate could do to simplify things with a little customization, and help you assess whether or not it would be a worthwhile enhancement for your company’s AccountMate system.