Incentive payments are intended to improve the success of your sales team as well as overall employee performance. Many firms have found that sales incentive schemes work, but without good leadership, a dedicated sales incentive administrator, and smart implementation, the incentive program may fall short of expectations and fail to produce the desired outcomes.
It may feel like a bungee jump when it comes to your incentive calculation. You may test the cord a few times to make sure it’s secure, and you may feel a rush of adrenaline coursing through your veins as you prepare to leap, but can you ever be certain that you’ll land safely and without injury?
There are various difficulties that companies face when attempting to implement a new sales incentive program, but there are some strategies to avoid them. Similarly, there are so many variables in calculating a sales incentive payment that keeping track of all the figures and calculations requires the precision of a supercomputer. When it comes to producing a sales incentive payout sheet, you can’t afford to make mistakes.
Ways to Avoid Sales Incentive Calculation Mistakes
Here’s a step-by-step guide to lowering your chances of making sales incentive calculation mistakes.
- Perform Some Tests on the Total Payable Amount.
Many executives overlook the value that each salesman brings to the firm. Salespeople, on the other hand, rely on their own particular sales achievements to make a living. If their efforts go unappreciated, their morale will suffer, and their office relationships will suffer as well.
Check your figures carefully for any discrepancies. Evaluate the following in particular:
- How does this month’s total payable compare to the previous month’s?
- Fill your file with the output data from last month’s payroll and run a match.
- Check to see if there are any notable differences. If that’s the case, look into it.
- What is the relationship between the total payable and the budget?
- Who are the top ten earners in the company?
- Is it the usual suspects, or has someone from the bottom of the league suddenly risen to the top?
- Check the Target Sum
It’s critical to maintain track of employee performance when calculating sales incentives for your sales staff. Many companies do not follow this procedure on a regular basis. A few organizations use spreadsheets to track employees’ sales numbers, performance, attendance, and other factors. However, this is still an unreliable and error-prone method.
A sale commission software that will help you streamline and optimize staff performance management across the board is crucial. The software correctly tracks performance, and data is updated on a daily basis to guarantee that all information is current. Sales incentive managers can view Individual employee performance, department performance, sales charts, industry trends, rapidly check the targets, check for any outlying targets, and ensure they sum up to the total national target.
- Check the Sales Total
You can organize and track sales commissions with the help of sales commission software. It allows you to use best practices to motivate your sales team while removing all of the hidden costs associated with sales commission incentive management.
It also ensures that, based on sales crediting rules, all accruals tally up to the national amount. You can immediately compare your sales incentive file to the source data you got to see if any differences exist.
- Check the List of Payees.
Employees come and leave on a regular basis. With sales commission software, you may double-check your data and compare it to the list of eligible salespeople (payees) in the HR system to guarantee that sales incentives are paid correctly.
- Put Your Numbers Through A More Comprehensive Review.
It can be tough to look at data objectively when you’re so sure about what you’ve collected and calculated. It is strongly advised that you run your numbers by a coworker or management.
Having a fresh pair of eyes look at your work can help you see human faults that you may have missed. Consider having your manager look through your checks and sign off on them.
- Communicate and Send Incentive Reports to Sales Managers
It is impossible for a sales incentive manager to know the specifics of how each sales team performed during the period. Salespeople may also forget to update systems on occasion. Hence, send the incentive reports to the Sales Managers and request them to double-check that you have all the data you need to compute the sales incentive payments correctly.
- Communicate with Each Salesperson and Send Your Report to Them.
Some sales teams are too large for a Sales Manager to keep track of every transaction at all times. Salespeople who are eligible for incentives can tell you whether any deals have been missed or if their overall sales salary is incorrect. Request that they review the file and notify you if any of the figures do not add up.
When you properly follow the above seven procedures, you avoid the chance of inaccuracies in sales incentive calculation. This can lead to a lack of trust in plan results and a reduction in sales efforts on the side of the salesperson due to the additional time spent shadow accounting, arguing results, and complaining about the plan. Consistent errors in incentive distribution might lead to a dissatisfied sales force.