Future Commission Payouts: Getting Sales, Operations, and Finance on the Same Page

Future Commission Payouts: Getting Sales, Operations, and Finance on the Same Page

Whether you’re on a company’s sales, operations, or finance teams, tracking sales commissions is both tricky and stressful.

Deciphering future commission payouts, and calculating commissions with unclear data can be difficult, time-consuming, and quite often, unreliable.

But we still have to hire new salespeople, balance the books, pay out commissions, and generally make sure the business will keep running into next quarter.

So, how do you gain the insights you need into your sales pipeline in order to get an accurate forecast for commission payouts?  

While no method is perfect, and all companies lose and close deals at the last minute, here are four ways to improve your handle on your sales pipeline and commissions payouts across departments.

  1. Be Involved in the Sales Planning Process

Don’t wait until the middle of the year before you start to calculate your annual commissions bill.

Get involved with your sales leadership as they develop quotas and territories for the year ahead. Understand the compensation plans that your sales leaders are designing. Make sure to include provisions for both new business and repeat business or renewals.

If you have access to historical information, the average quota attainment is a valuable piece of information in determining how much revenue you can expect from each sales rep. The reality is that a lot of your salespeople will not make 100% of quota. You should be able to make an initial stab at future commissions payouts once you have these numbers.

  1. Attend the Weekly Sales Forecasting Calls and Meeting

Some people will roll their eyes, and treat these calls and meetings as a timesuck that takes away from more important tasks. However, a regularly scheduled call, meeting or both can be a great asset for both leaders and individual contributors.

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If you’re on the finance or operations team, these meetings are a great opportunity to check-in with sales managers and salespeople to find out what’s going on at the front lines. If they’re running into problems that stop them from closing important deals, you can get the necessary information to help them out.

  1. Access to Pipeline Data for Everyone

You have no hope of figuring out your future commission payouts if you have to reference data from five different systems. The customer relationship management (CRM) system says one thing, the sales forecast tool says another, and accounting’s go-to spreadsheet has yet another data set on it.

A single source of data truth is critical to getting a handle on things. Otherwise, you have to constantly worry about whether numbers are up-to-date, the deals are actually going through and countless other concerns.

Centralizing your data into a pipeline management software (like Datahug) and out of siloed spreadsheets can help clean up forecasts not just for everyone in the sales department, but also for finance and executive leadership. Teams shouldn’t waste their time triple checking numbers against other department’s projections. Instead, they should work from the same data source and can limit how much human error gets introduced into your sales forecasts.

This type of system also improves your compensation plan transparency. Departments don’t have to play guessing games with how much money they have coming in over the next quarter. They can clearly see the factors influencing it.

Summary

Whether you’re in sales, finance, or operations, if you’re only looking at your department’s information, you’re not getting a holistic view of the sales pipeline and in turn the business.

Giving high level managers insights into the sales forecast can help departments make smarter decisions, and know what’s really going on with the business.

After all, while figuring out your commission payout is essential, avoiding a wildly off-base sales forecast in front of the C-suite is also important for job security and satisfaction. Follow these three recommendations to improve these areas in your sales department and optimize your commission payout opportunities.

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