Until now, a significant gap existed between creating strategic sales compensation plans and cost effectively executing them. Glocent bridges that gap. In most companies, sales commissions – a cost center that averages 10 percent of revenue – has been managed by little more than a collection of homegrown systems, cumbersome desktop spreadsheets, and labor-intensive administrative processes. The result: mismatched goals, mistrust, decreased productivity, and inaccurate and unpredictable costs. Glocent fully automates the process and ensures meaningful and accurate execution of incentives.
As the leader of your finance team, you may find yourself in the challenging position of holding your sales force’s financial reins while not always enjoying the direct influence that would imply. Your sales team may want to launch wonderfully creative sales plans without fully understanding how they will impact your bottom line. In order to properly leverage your solution you should consider:
Does the company want to pay incentives based upon booked or actual revenues? Sales force tracking or sales force management applications typically calculate compensation based upon sales order data. An inherent weakness in this approach is that orders do not always produce revenue. Some orders do not complete, others become cancelled, while others may not actually produce real revenue (zero-sum or artificial transactions).
Can I ensure that the expectations created within a sales force performance management tool will be met? If a sales person records 25 sales, and the SPM tool calculates a commission based upon those sales, the only way to meet these expectations is to ensure that revenue is generated from those sales. Otherwise, the SPM application will produce erroneous data, and future reconciliation becomes necessary. Ask a sales person if he likes giving money back!
Which tool provides immediate, quantifiable value? The Gartner Group offers insight into this question. “On average, companies that don’t use information technology to track payments from customers overpay their employees by 3 to 8 percent of their bonuses and commissions.” Alorie Gilbert, a staff writer at CNET news.com, points out that, “Before an accounting scandal forced WorldCom into bankruptcy court, the company faced another kind of bookkeeping shenanigan: As much as $4 million in phony sales commissions was pocketed by more than a dozen employees.” The best incentives are accurate incentives!
Other elements of an SCM solution will also impact your profitability. To learn more select from the links below: