Aligning business processes across multiple departments can be convoluted, not to mention time intensive and laborious. Like many organizations, you’re likely pulling your financial data from a variety of source systems and storing it within spreadsheets, to then analyze it further. While spreadsheets have been the standard for many years, this can result in complicated workflows and increase the margin of error when calculating sales commissions.
While FP&A and sales commission processes are often looked at independently, there are significant similarities.
Here are 3 Things FP&A and Sales Commission Plans have in common:
- Managed by the finance and accounting team
- Rely on disparate spreadsheets
- Source their data primarily from an accounting ERP/ GL
Let’s discuss a common scenario finance leaders find themselves in and move into how combining automation between FP&A and sales commissions can offer significant time and cost savings.
Does this Manual Sales Commission Process Look Familiar?
As the CFO at ABC Company, you’re responsible for the timeliness and accuracy of calculating sales commissions and reporting on 30 sales reps with different compensation plans.
Account Executives – Straight Commission Plan
- 100% Commission
- 20% commission on gross margin
Account Executive – Base + Commission
- Base Salary $65,000
- Commission is 10% on gross margin
Inside Sales Rep
- Base Salary $45,000
- Commission $150 per meeting + 3% of gross margin
On top of managing commission plans for each location, you need to consolidate multiple spreadsheets, manage complex calculations, create & issue payment reports and manually push journal entries back into the general ledger. Trying to accomplish this in Excel could lead to these serious issues:
- Miscalculations causing the organization to overpay and lose revenue
- Delayed commissions payout, disincentivizing sales team
- Lack of structure resulting in employee turnover
- Spreadsheet errors resulting in loss of data
- Little to no team accountability
- Lack of data integrity
- Costly administrative effort
Fortunately, FP&A software can eliminate these common issues. Here are 6 ways a Cloud FP&A solution like Limelight can automate sales commissions and the FP&A process. Ultimately, offering great efficiencies across the entire office of finance.
1. Sales Commissions Trackability
FP&A software offers one consolidated environment and eliminates the need for multiple spreadsheets. Complex sales commission calculations can be automated, freeing up more time to run advanced analytics on sales performance. Track deferred commissions, manage various accelerator calculations for multiple locations, and forecast out the remainder of the year, all in one place.
2. Real-time Charts and Graphs
With real-time dashboards, you can offer your team greater confidence behind their numbers and the ability to slice and dice data in a variety of ways. Limelight dashboards are designed specifically to offer data transparency and real-time visibility behind financial data.
3. Data Integration
Your finance team likely spends their time exporting data from the general ledger and CRM, then compiling and reviewing worksheets. With Limelight, we alleviate the manual process involved by directly integrating into your G/L and CRM systems to centralize data and provide real-time reporting & analysis.
4. Automated Reports
Generating comprehensive sales commission reports can be time-consuming. With a cloud FP&A solution, you can take advantage of our seamless integrations and use the data directly stored within the system. Now that your data is centralized all in one place you won’t be dealing with versioning errors or complex iterations. A cloud solution will enable your team to generate on-demand reports for individual sales reps and the executive team.
5. Easily Forecast the Remainder of the Year
Struggling with spreadsheets makes it challenging to incorporate forecasting. By automating your sales forecasts, you can boost and gain access to real-time metrics to measure performance more efficiently. Additionally, your team can take advantage of customized rolling forecasts and scenario models for optimized long-term strategic plans.
6. Minimize Errors
By pulling data directly from source systems, Limelight reduces the risk of running into errors when using multiple spreadsheets and going through various iterations. Features like real-time data consolidation, business rules, validations, and audit trails all help to further reduce reporting errors.
These six benefits outline how a modern Cloud FP&A solution can increase team efficiency and overall effectiveness. By unifying your FP&A and sales commission process you enable your organization to better align team goals with corporate objectives. It’s no secret that Excel, while convenient, just isn’t cutting it as the single source of truth. The question for your team then becomes is the automation worth the investment. A recent study by Harvard Business Review seems to think so, as “companies that embrace digital technology innovation experience nearly 20% higher gross margin than the laggards.” This results in quite a competitive advantage for those adopting new tools.
Limelight Software was designed to offer a centralized database for sales planning, budgeting, forecasting, and reporting to encourage more data-driven business decisions, all in one place. By integrating directly into your ERP, Limelight offers a real-time environment for your team to collaborate on expense and revenue planning, workforce planning, sales commissions, and financial reporting and analysis.
To see how you can automate your sales commissions, manage multi-tier plans, and schedule report distributions with speed and accuracy like never before, schedule a demo with our FP&A Specialists today.
