First, let us define the term “sales commission”, to make sure that we’re on the same page.
Sales commission is the compensation that sales reps earn by selling a product. A sales commission is connected to a specific transaction or a commission event – which means it’s calculated using a fixed formula (though, of course, the rules can be different for different products), and the sales expert earns it each and every time they sell that specific product or service. Of course, sales commission structure and compensation practices differ from company to company.
As a custom software development company, we’re dealing with companies from various industries: financial, transportation, telecommunications, media, utilities, and more. We found out that sales commission management is a very common challenge in all of these markets, and how you solve this problem – what kind of sales commission software you implement – depends on the size of your business and your business goals. Let’s discuss all the possible options.
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What is the most basic way of managing sales commissions? The answer is: using Excel sheets, or – in some cases – even pen and paper. Let’s be completely honest: when your organization is small, it’s a valid option, and lots of companies around the world do it that way. However, when you’re trying to scale up your business, it creates a multitude of issues:
Image source: Pexels.
Our clients contacted us to deal with the aformentioned problems with software solutions. First, we developed a few enterprise-grade custom systems tailored to the needs of various companies. Then, based on this experience, we created a ready-made sales commission platform called MonkeyJar which provides you with all the most important features and can be implemented in your organization in no time. However, it doesn’t really matter if you choose an off-the-shelf product like MonkeyJar, decide to invest in developing a fully-customized solution, or even contact our competition to develop such a platform with another vendor – here are the main advantages of using modern software to manage your sales commissions.
You can define rules and calculate commissions for the entire groups of sales reps. These calculations use existing data sources and predefined rules, so can be done at any time, not just when someone manually collects the data for a given period.
All of this means your employees save a lot of time which they can use for more productive and creative tasks – for example, they can lean towards analysis, simulations, and predictions, to improve the calculations and help the company come up with better, more beneficial rules for the partnerships it maintains.
Automation also allows you to avoid human errors, which means you don’t have to deal with sales agents or partners who ask about issues they’ve noticed and file complaints. In some cases, the implementation of a sales commission system even helps companies identify more serious issues with their calculations that remained hidden for years. This enables them to reach out to their partners to correct and rectify the situation, helping them avoid the opposite scenario (partner or partners finding out and thinking they’ve been intentionally wronged).
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With the sales commission system, data from various sources is collected without human intervention. You can edit it at any time but you don’t overwrite the data, so you can also access the history, and recreate any thought process, whenever necessary. You’ll always know when someone did something in the system, who modified the rates, on whose order, etc.
Moreover, such a system uses a set of permissions that define the functionalities and data people can access. You can create groups of permissions assigned to specific teams or people. The company can also create and define its own permissions – even down to each single text field, column, etc., if there’s a need for that.
Depending on the nature of your business and sale structure, commission calculations can be quite complicated. For example, one sale transaction – e.g., a mortgage loan – may generate several different commissions for various sides: the partner company reselling your services, the particular agent with whom the contract was signed, possibly also their supervisor, etc. A sales commission system allows you to track these transactions and commissions easily.
MonkeyJar easily adjusts to different business needs – you can use it for both B2B and B2C (for example, when when you sell services such gas or electricity thorugh a net of sales agents and partners). The system can also handle complex clawbacks without creating cashflow problems for your partners. Finally, it can help you avoid errors in sales commission calculations, which can be quite costly.
Each sales commission system that we developed (MonkeyJar included) was easy to integrate with other technologies (CRMs, billing software, etc.).
Here are some examples of useful MonkeyJar integrations:
Our system’s UI can be made to resemble Excel, so it’s easy to understand for employees who used that solution. However, it can also do (and be) so much more. For example:
Okay, I already spilled the milk and mentioned that – besides developing custom software solutions – we also created a ready-to-go SaaS product for sales commission management called MonkeyJar. If you’re reading this blog post, I guess that you might be interested in its capabilities – even if you don’t want to become our client, you can use this set of features as a “must-have” checklist when looking for another product or when planning to develop a custom product. No harm done.
In short words, MonkeyJar is a database application with a graphic WWW interface based on Oracle APEX, Oracle Cloud infrastructure, PL/SQL and JavaScript.The system is fast, easy to use, very scalable and configurable. It implements data from various outside sources, verifies the information, and uses it to allow automated, “one-click” calculation of sales commissions. It was designed for continuous control of the commission process – it ensures great data quality, offers full auditability, advanced reporting options, and powerful security features including a customizable permissions system.
Here’s the system’s full feature set:
I know that real-life case studies are what you like the most. Here are some examples of sales commission management system implementations that helped us shape MonkeyJar into the product it now is.
This project – a custom-made sales commission system – was a bit complicated, because we first delivered it for one bank, and then ended up implementing it in another as well – due to a fusion that took place in the meantime.
The institution we started the project for based its complex sales structure on a network of semi-independent sales agents. Every such agent could have a different idea for their commission, and the company wanted a system that could accommodate such flexibility. Handling all these complicacies was quite challenging, and the planned merger added another layer of problems on top of it because that second bank’s sales structure was completely different. We really had to take our software’s flexibility to the next level.
However, the client knew we could handle it – they were aware we’ve done sales commission implementations in the past. In fact, the fact the we had such experience and a proprietary, heavily customizable sales commission solution up our sleeve was one of the reasons Pretius was selected for the job in the first place. Our experience helped shorten the development time significantly – in around 5 months, we’ve delivered the first version of a system that met the bank’s criteria and automatically calculated commissions for every sales agent, based on a set of predefined variables.
The system helped the bank streamline their sales commission processes – it made calculations faster, cheaper, and much more accurate and less prone to human errors. In the end, our technology found use in three banks that were unified under one umbrella – it was just the best, most flexible tool for the job. Nowadays, the company has millions of customers and thousands of employees in Poland alone. Our partnership is ongoing – 8 years and counting.
Another interesting implementation was the one we made for a big Polish company from the utilities sector.
The business circumstances – and therefore the client’s requirements – were quite complicated. The company thrived on B2C sales and based it’s sale structure on cooperation with outside partners. This meant it handled a huge number of relatively small commission calculations each month, and therefore needed software that would be really easy to use and and flexible at the same time.
Clawbacks – provisions that require one side to return to the other money that was already paid – were another key factor. Our client often handled such transactions, and their system needed to not only support them, but do so with relative ease, great accuracy, and without creating cashflow problems for the client’s partners (especially since, as it turned out during the implementation, some clawbacks were wrongly calculated for years and could spell serious troubles when finally corrected).
We’ve delivered all of that, and more – our system allows the client to easily handle all kinds of commission calculations and offers the company protection against clawback frauds.
As with any software project, there are some obstacles and issues your company might encounter during implementation.
Sales commission tools can be very useful in many different industries. Automation will do wonders for many companies’ bottom line, saving a substantial amount of time, and money. The boosted security is also great to have – you can avoid many serious issues and problems that stem from data leaks. If you choose your technology right, you can get a system that’s easy to integrate with existing infrastructure – and that employees will quickly get used to thanks to a user-friendly interface.
Systems of this kind can be a pain to implement, but if you look out for a few issues and choose your partner well, sky is the limit. If you’re interested in a partner with a great deal of experience and knowledge regarding sales commission software, write us at hello@pretius.com or use the contact form below. We’ll see what we can do to help.
Here are answers to some common questions regarding sales commission software.
Commission reporting software is a type of software that helps businesses track and manage the commissions they pay to their sales staff. It can automate the calculation of commissions based on various factors, such as sales volume, revenue, profit margin, or performance goals.
You can use Excel sheets for that, but in bigger enterprises, the best way is to use a dedicated, automated sales commission system.
It depends on your tool of choice. Most good platforms – especially custom systems – will do a lot of the heavy lifting for you, thanks to automation
