Categories: New in Tech

The 6 Biggest Sales Commission Software System Mistakes You Can Easily Avoid

Maintaining accurate records of the sales commission structure and distribution is critical to a successful organisation. Using Sales Commission Software guarantees that your records are accurate and can be easily accessed. Sales commission software is a must for any business that pays commissions to employees and independent representatives. Sales Commission Software is a viable alternative to time consuming manual entry and greatly reduces the likelihood of errors in tracking commissions. Using sales commission software you can easily change and adapt your commission structure as your company grows and changes.

The biggest mistakes in commission systems are:

1. Not using Sales Commission Software :

Sales Commission Software allows you to track sales commissions with ease and accuracy. Sales Commission software can also be used to efficiently track and analyze information from sales invoices, purchase orders, orders and more. Your Sales Commission software can save you a lot of time by automating routine tasks and calculations. It can also help you to save costs by eliminating paper-based reporting and follow up.

2. Not compensating sales staff adequately :

Compensate your sales staff sufficiently for their work and time devoted to the organization. Make sure their comp matches up with the number of hours they put in. A good commission plan will be able to motivate your sales staff, but will not allow them to sell more than they could on their own. It is also important that you set a clear policy on what type of customers should be compensated differently and at what level.

3. Using Commissions that are Inadequate or Too High :

Using software sales commissions that are too high can be extremely detrimental to your company. When you have too much money in your compensation pool, it is much easier to create a situation where your revenue will decline and hit the bottom of this pool. In contrast, a commission that’s too low dramatically reduces the total revenue of the company. Using Sales Commission Software will assure you of accurate and easy access to your commission calculations.

4. Not using a commission structure that is easy to understand :

When choosing the right commission system, it is important to know that one size does not fit all. Make sure employees and independent representatives have access to a comprehensive breakdown of the commission structure. Using Sales Commission Software will allow you to modify the commission structure and payout percentages whenever you need. This software will keep your employees and independent reps informed as well as help prevent any misunderstandings and inconsistencies in payouts for sales commissions.

5. Not having a Commission System in Place :

A commission structure is necessary to track sales and ensure equitable pay for your employees. Your commission structure should be set up at the beginning of the year and remain unchanged throughout the year. Once you find a commission system that works for your company, stick with it throughout the year. The best way to ensure that commissions are calculated properly is to have all of your employees use Sales Commission Software. 

6. Not tracking all sales invoices and purchase orders properly :

Sales invoices may include different types of charges on top of the price of goods sold, such as freight charges for shipping goods, costs for supplies used in manufacturing goods, warranty expenses and other labour charges. Depending on the nature of your business, you will have to pay commissions on a variety of charges. This can quickly become a confusing mess if you are not using Sales Commission Software to track sales invoices and purchase orders. 

What is a spiff in sales?

You can understand what is a spiff in sales as it is a small piece of compensation that is given over and above the standard commission rate, usually as a reward for performance or achievement. Spiffs can take many forms and are a significant source of revenue for many salespeople. A good sales commission system should be designed to allow the sales staff to operate effectively. 

ElevateHQ is a Sales Commission Software that comes with a fully functioning demo that allows you to create your own sales commission structure and test it out before upgrading. This Software is a reliable, flexible and effective solution for record keeping and base commission calculation. It is a great solution for every salesperson and business that pays commission.

Deny Smith

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