Sometimes it Takes a Sixth Sense to Calculate Commissions

by | Oct 26, 2022

As Halloween approaches it is all too easy to reflect on terrifying topics: scary movies, public speaking, heights, messing up a handshake, seeing someone waving in your general direction and waving back only to realize they were waving at someone behind you, and Bruce Willis actually being a ghost can strike fear in just about anyone. But there is one topic that frightens company administrators everywhere: commission calculations. Commissions can be notorious for requiring a large amount of time to calculate, with most of that time spent manipulating data in preparation for calculations to be computed. When calculating commissions there appears to be a strong correlation between the complexity of the commission plan, and the amount of time spent calculating commissions. Perhaps there is a way to reduce the time spent on commissions and remove the fear associated with it.

Nightmare on Excel Sheet

Anyone who has spent long enough time around computers in the last 20 years has inevitably seen an insanely complex spreadsheet with multiple pages, formulas, macros, and queries. Such a terrifying sight can be as scary as seeing Freddy Kreuger on Elm Street. However, the entire finance industry is essentially built on spreadsheets. Spreadsheets are already scary enough, which is why ghosts use sheets to cover themselves. But the issue with spreadsheets is that they don’t scale well with a larger number of agents, or a more complex commission structure. There is also the common issue with spreadsheet errors: as stated in a frequently referred-to study by Panko in 2005, 88% of spreadsheets contain errors. While this study is a few years old, the fact remains that many companies still use spreadsheets. Another common issue is sharing spreadsheets and data files with multiple employees which can prove to be difficult, even when using collaborative tools like Google Spreadsheets.

An undead sales commission manager wishes he had switched to commission tracking software instead of using excel

Signs of a Limited Commission Calculator

Companies that don’t use spreadsheets may instead opt for a commission plugin for their CRM or AMS software. Many systems already have a built-in commission module, and using the prepackaged tool is often a relatively easy step. However, many of these kinds of software have very limited commission calculation capabilities, which is frequently reflective of the cheap monetary cost of these built-in tools. So what happens if the commissions are complex? Like being dependent upon a tiered rate, or calculating the total amount of revenue generated and using a percentage based on that amount to determine the commissions? Subverting expectations is another common theme in horror movies, and having a crazy twist at the end of the film or show can retroactively add fear in areas that maybe didn’t have any. Some directors make a career off of this tactic, such as M. Night Shyamalan who would enjoy the simple bait and switch of “powerful” built-in commission tools provided in a CRM or AMS.

The Invisible MANagement Software

The scariest creatures are the ones that can’t be seen. Paranormal Activity and its follow-up sequels were scary because whatever was opening all the cabinets and dropping the pots & pans was invisible. On top of that, many scary movies do a great job of waiting until the climax to fully reveal the big bad monster. The movie Alien is an excellent example of this scheme: the entire movie was wrought with tension. While this is a good way to format a movie, waiting until the last minute to reveal commission information to employees, or not being fully transparent with commission calculations creates a tension that is far from beneficial. This is yet another terrifying issue with tracking commissions on a spreadsheet; not only is there often a lack of transparency often but also, the employee has to wait until the last second to view their commissions.

The IT Factor of Commissions

With all of the monsters creeping around the realm of commissions, one would hope that there is a Mystery Machine with a team of heroes to find the monsters and determine the best solutions to the three issues mapped out above:

  1. Poor data management is commonly found in Excel
  2. Limited commission calculations in CMS and AMS systems
  3. Lack of visibility into commission calculation and results

Core Commissions offers an easy way to store data within one software, calculate any kind of commission, and generate a variety of commission reports. Core Commissions is the system that takes the terror out of calculating commissions. 

If you need to cut the commission management workload immediately, we have the solution for you. Contact us to get all the information you need, or set up a free demo and we’ll walk you through the application.

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