3 Areas You’re Losing In for Still Using Excel to Manage Sales Commissions
When it comes to compensating your sales team, you need an efficient and accurate system that gives you real-time data that you can use to make critical decisions. In fact, this system is not just for computational purposes but should perform complex functions such as data validation and analysis. Although Excel is great for computations, it comes with a myriad of limitations.
In two of our past posts “Spreadsheet Horror Stories” and “preadsheets Giving You a Headache? Try Sales Commission Automation”, we outlined serious issues that could go wrong because of relying on applications such as Excel to manage sales commissions. These range from erroneous calculations of commissions to possible litigations by affected sales reps on grounds of fraud.
Even though it could be argued that these situations aren’t occasioned by deliberated decisions, they can have dire consequences on a business. For instance, any commotion with sales reps or vendors and other stakeholders can result in reputational damage. To add to your awareness of the spreadsheet issues, we look at other areas you’re likely to be hit hard if you’re still using Excel.
1. The ASC 606 Compliance
Recently, we also shared how the ASC 606 financial reporting standard will affect sales commission’s management. For example, because of the increased documentation associated with this standard, users of spreadsheets will be faced with an avalanche of complex formulas to handle. Besides, there is tons of data they still have to process.
The huge data and complex formulas are likely to cause a ballooning of errors in computing commissions, delayed payments, and inaccurate financial reports. Now, this realization is not music to ears of any sane entrepreneur. The good news is that you can easily avoid such problems by investing in a quality sales commission management software.
2. The Audit Trail
Any good software keeps a trail of all transactions that pass through it. These trails show the identity of the user, nature of transaction, date and time when the transaction was processed. According to Smartsheet, this is an indication of good business controls. Unfortunately, with a spreadsheet, you only get to know the final details of a transaction with no way to tell what happened during its initialization and termination.
This gap can be very costly. In case of internal fraud, you will have a hard time tracing the origin of transactions and detect any manipulations on your spreadsheets. On the other hand, applications that are designed specifically to handle commissions come with robust user profiles and elaborate audit trails. With such, you can tighten your grip on internal business controls.
3. Real-time Analysis of Sales Data
According to CIO, companies are likely to lose money because of relying on outdated data analysis to make critical business decisions. When it comes to developing strategies that spur business growth, accurate and up to date sales performance data is at the center of it all. For you to be able to analyze the performance of your sales teams fast and share the information with top decision-makers, you need more than a spreadsheet.
In a business environment that is constantly changing, automated information management systems that can perform error-free computation with ease are becoming crucial. Unfortunately, spreadsheets will without a doubt fail to achieve these objectives due to various limitations. In any case, manual interactions with Excel are prone to human errors. Is this what you want for your business?