Author: Connor Barry
Sales Operations professionals are often the first to tell you their frustrations with Excel and its limitations in their line of work. There is no arguing, Excel is an amazing tool when used for what it is built for: calculations, graphing, pivot tables, etc. But it wasn’t built as a commissions processing tool. So why are so many companies continuing to use Excel rather than switching to a solution designed specifically for your individual sales organization?
Keep reading to find out the limitations of Excel as it pertains to Sales Commissions and why an Incentive Compensation Management (ICM) solution, such as SAP Commissions, is a better fit for your growing sales team.
1. Errors and Disputes
We commonly find clients wanting to switch from Excel to a Commissions Solution are currently facing problems caused by errors within their process. Using excel to calculate commissions leaves room for human error, which typically leads to overpaying employees or disputes with payees. It is typical to see companies using Excel overpaying their sales force around 2-3%. That percentage may seem small, but for companies with significant expenditures on variable compensation that can add up very quickly. Companies will typically see a reduction in overpaying reps and a decline in disputes, simply by removing the human element from the commission’s process. But that is only one reason why SAP Commissions is better suited for your sales org than using Excel.
Additionally, there is no way to centralize the dispute process in Excel. When a payee has questions or is disputing their calculations, many emails go back and forth between reps, managers, and compensation administrators. SAP Commissions allows for out of the box dispute resolution within the solution, that ties directly to payee dashboards. A payee can select transactions they want to dispute and the administrators will be able to research those transactions and calculations quickly. The approval process for disputes can also be managed in the solution removing the need for endless email strings to manage the dispute approval process.
Another reason SAP Commissions makes sense for your organization is its scalability. We all know Excel has limitations. Large enterprises often run into these limits because they need to process more than a million transactions in a month, which exceeds the row limit in excel, or the calculation logic is so complex that the excel sheet will crash while calculating. This, and other limitations, are examples as to why Excel is not made for commissions processing at scale. Enterprise companies and businesses with large sales organizations need to consider this before hitting the limitation that inhibits the effectiveness of your compensation plans. SAP Commissions is built to scale with a company and will not hold you to limitations, no matter how large your company gets and how complicated your calculations get.
Excel may work for your company for the time being but are you prepared for unexpected changes in the economy, the business world, or within your organization? This is a lesson many companies have learned in 2020, as COVID-19 threw a wrench in so many business plans. Making rapid changes in excel may be simple, but it often doesn’t meet the burden for many SOX compliance needs and is difficult to report those new changes to the sales force.
SAP Commissions is versatile and flexible, allowing you to make changes to pay as you need, even at a moment’s notice. For example, SAP commission’s crediting engine enables you to calculate things fast and see results even faster. This flexibility allows you to test, modify, and change plans all within the tool. These changes are also fully audit compliant and will fit into existing reporting within the solution.
If you have changes within your organization, such as an administrator leaving, SAP’s solution helps with that too. SAP Commissions makes it easy to train new admins, and Canidium will provide an operations guide with every implementation to ensure there is proper documentation on the operation of the system to confidently calculate and report out to the field. With Excel, a knowledgeable employee can leave and it can be like starting from ground zero.
4. Reporting, Security, and Audit Compliance
Reporting on sales compensation is critical to keeping your sales force motivated. Excel has the ability to create reports but these reports are rarely real-time, up-to-date, and they are likely difficult to distribute to your team. SAP Commissions reporting tools make this process easy for admins and reps, starting with dashboards for up to date information at a glance, compensation statements for detailed payment information, and deeper analytics on sales performance. Individual contributors will be able to see their data and how they are performing, while managers will see their individual performance as well as how their team is doing with the ability to drill down into their subordinate’s dashboards and reports.
SAP offers robust audit compliance and security that is not matched in excel. Single Sign-On (SSO) is an easy to set up process, pgp encryption on any file transfers comes standard, and all aspects of the solution are logged whenever a change is made. Role and business unit security are also available to set up which allows for the right level of data segregation and access control so that you are able to control data on a need to know basis.
Excel is a great tool, but it is not great for everything. You need a commissions solution that has depth, is versatile, and reliable, just like your sales team. If you want to get more out of your compensation plans, a new solution is the best place to start, especially if you’re still using Excel. If you want to learn more about how SAP Commissions can benefit your organization, just reach out to our expert team at Canidium.com/contact, or click the button below.