Picture this:
When lunchtime hits, you see your sales team rush out the door and leave your building empty. An hour later, they slowly come back to the office feeling more sluggish than before. What gives? Lunchtime can be a giant productivity killer. It's not that it stops sales for a short period, but it often leaves reps feeling less-than-ideal. That begs the question: Will providing lunch make a difference? Lunch and Productivity The issue with lunch is that most people don't have the time or means to eat a healthy meal. Unfortunately, it's easier to get a grease-filled burger at the joint across the street than to eat something that will provide energy and fulfillment! As a result, most workers resort to those unhealthy options. They rush out the door and do what they can to eat a quick meal before returning. By the time they get back, those unhealthy meals wreak havoc on productivity. How Providing Lunch Can Help If you want to increase selling time, consider providing lunch. In-office lunches have many perks. For one, you get to control the meal options. That sounds a little heavy-handed, but it's about giving your team choices beyond those quick fast-food meals. You can cater lunches that are fulfilling without making your team feel bogged down and tired. But that's not all. Providing lunch can also save your team tons of time. Think about how much time they spend getting to a restaurant and ordering their meals. Those menial tasks eat up a good chunk of their lunch break. Catering will save everyone time, providing the opportunity to enjoy meals. Finally, providing lunch fosters collaboration and networking. Instead of going out and eating alone, your team can stay in the office. They can brainstorm, share ideas, or just relax. Either way, the camaraderie they build goes a long way to creating a solid unit. Should You Provide Lunch? If you have it in the budget to provide frequent meals in the office, it's well worth doing. Offering your team lunch can increase selling time, keep everyone happy, and build a great work culture. Read a similar article about commission plan design here at this page.
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For many business owners, tracking commissions boils down to creating a spreadsheet, entering data, and calling it a day. This manual entry method has been used for many years across all kinds of industries, but if you’re still creating a spreadsheet for commission tracking by hand, you may be setting your company and your team up for trouble.
When you manually create a spreadsheet for commission tracking, the likelihood of errors increases a lot. Aside from human error, you may also experience issues with the spreadsheet itself. If you’re using software, the software may tabulate the numbers incorrectly if it has been set up for general use. Furthermore, a paper spreadsheet is prone to legibility issues and damage or loss, meaning you could lose your data entirely. What’s the Alternative? Instead of manually tabulating commissions, consider using specialized commission software that has been designed for your industry. This type of software typically allows for customization based on your business’ needs, and you can often enter basic information about each sale to generate full commission reports. Commission tracking is a feature of many commission software titles found today. This takes much of the guesswork out of budgeting as it can show you precisely what you will be expected to pay in commissions based on the time frame you choose in the software setup. Archiving Your Commission Spreadsheets No matter how you create commission spreadsheets, you’ll want to think about how they will be archived. Different industries have different regulations regarding how financial data must be stored and for how long. This may require consultation with your legal department to make sure you comply with industry regulations. You may also have a specific length of time that commission reports must be saved for. This can vary by industry, but a good rule of thumb is to keep records for at least seven years. This may also be a tax liability issue, so speak with your accounting team to learn more about your obligations. Read a similar article about incentive compensation solution here at this page. Is your organization struggling to hold onto employees? You're not alone!
The "Great Resignation" is seeing employees leave en-masse to greener pastures. Your organization can't succeed without a team ready to work and improve your bottom line. But how can you retain employees? This blog will provide some need-to-know tips and go over what to avoid in a compensation plan. Provide Room for Growth Workers want opportunities to grow with your company. Unfortunately, not enough organizations make that easy. The key is to support skill development. Contrary to popular belief, employees are eager to participate in training if it helps further their careers. Consider starting training programs and creating pathways to climb the corporate ladder. Show your team that there's a path to promotions and more responsibilities. Recognize Hard Work Make a habit out of recognizing good work when you see it. Employees are tired of feeling unappreciated. They play a big part in your company's success, so why not reward them. Of course, bonuses and incentives go a long way. But, even internal recognition and discussing successes can make a difference. Offer Flexible Work Arrangements The pandemic showed that workers don't have to spend their entire lives in an office. Multiple surveys show that many workers want to keep working from home. Some are willing to switch jobs to make that happen. If it's possible for your business, consider offering more flexible arrangements. Even part-time telecommunication is a good choice that strikes an attractive balance. Provide a Healthy Work-Life Balance Here's a tip that can make a big difference. Make a habit of respecting work hours. A good work-life balance is crucial to employee satisfaction. Try to set boundaries and don't expect every employee to be available around the clock. Respect their off-time, and your team will thank you later. What to Avoid in a Compensation Plan The best way to increase employee retention is to offer a generous compensation package. But a higher salary isn't always possible. So, you have to be strategic in how you reward your team. Don't make the mistake of seeing the value in commissions. Performance-based rewards can motivate your team to work harder than ever before. Communicate often and make the connection to work performance as clear as day. Another thing to avoid is forgetting the overall job market. See what your competitors are offering. Don't be surprised when employees jump if you're on the lower end of the compensation scale. Finally, avoid making your entire compensation package about commissions. Commissions are great when sales are good, but your team needs guaranteed income to stay. Otherwise, they might go elsewhere for more stability. Consider trying a commission plus salary plan to have the best of both worlds. Also, keep your benefits and other extras in mind. Keeping Your Employees Happy These tips can do a lot to keep your team happy. But the job market is ever-changing. Communicate with your employees and stay on top of their needs. Keeping them happy is the key to employee retention. Read a similar article about analyze commission data here at this page. Budgets are great and all, but what happens when your budget gets busted by cost overruns? Ever business faces cost overrun challenges from time to time, but these events can put a serious dent in your profitability. As an added bonus, they also have the ability to push back deadlines, compromise product integrity and cause your sales team to over-promise and under-deliver. Fun, right?
Thankfully, there are some measures you can put in place to prevent cost overruns from ruining a project. Below are some considerations if you’re facing cost management challenges on a regular basis: Plan Your Workday Using Adaptive Measures Adaptive planning is a crucial component in avoiding cost overruns. The adaptive planning approach involves creating schedules that are flexible enough to adapt to changes while still accomplishing the intended original goals. Workday adaptive planning as an approach to business scheduling can help your team to overcome deadline-busting obstacles individually, but it can also help teams and the entire company. When teams utilize workday adaptive planning to schedule out project tasks, communication can become more effective, and where one team has to push something back, another team can be put in place to pick up the slack. Don’t Let Creep Sneak In Scope creep can also decimate your planning efforts if it isn’t monitored. A little bit of leeway here, a few extra assignments there, and before you know it, you’re over your budget and behind schedule. By assigning scope creep monitoring duties to one person or one team, you can push back against creep and keep everyone accountable. While you don’t want to be too rigid so as to become unable to deal with changes, you also don’t want to drift so far off course that a project’s budget gets blown. Your scope creep monitoring team should coordinate with all project teams on a regular basis, and it should be made clear that the scope creep monitoring team has the final say in what needs to be cut in order to stay on budget. Read a similar blog about sales software here at this page. Your sales pitch is a pivotal moment in the sales pipeline as a poorly executed pitch could put the entire deal in jeopardy before you ever have a chance to begin nurturing a lead. This means that taking the time to craft your sales pitch is vital, and you should consider crafting variations of your pitch to meet the needs of various audiences. Pitching product development to a small investment firm may look completely different compared to a pitch delivered to a Fortune 100 company.
Consider Everyone Involved To add to the above, you should also consider all of the roles to which you are pitching. Obviously this pertains more to situations where you are pitching to a group, but it can apply even when you’re pitching to individuals in a target group. You want your pitch to resonate with the individual you’re pitching to, but you also want that person to take your pitch and its ideas back to the group. If you haven’t included bits that resonate with other members of the group, you may find less success. Take Commissions Off of Your Mind You’re also encouraged to ignore incentives that may be top-of-mind when pitching. If you’re focused on the commission you may earn from closing a deal, your pitch is probably going to be skewed one way or another. How sales commissions will change over time based on performance should have no bearing on your ability to craft a pitch for the here and now. Because while you’re busy thinking about how sales commissions will change over time and how you’ll get a big paycheck if you nail this pitch and ultimately close the deal, you’ve probably already lost the deal. In allowing your mind to focus on the money, you aren’t going to place your attention on perfecting your pitch and all of the nuance that goes into a great pitch. The bottom line? Ignore thoughts about changing fortunes, and keep your eyes on what’s going on in front of you. You can enjoy the money when you actually close the deal. Read a similar article about Monte Carlo sales forecasting here at this page. Earning commission is a great feeling. No matter where you are in your sales career, knowing that you were the one to close a deal provides satisfaction like nothing else. Of course, the boost in your paycheck doesn’t hurt either.
If you manage commissions, however, the process of ensuring that everyone gets paid what they are owed can be challenging. This is particularly true if your sales force is composed of a large group of professionals who serve clients across the country or even the world. As a sales team grows larger, keeping up with who is owed what and when becomes difficult, even for the most experienced of managers. On top of that, the time spent documenting commissions, reviewing sales figures, collecting payments from clients and processing payments for your sales team can really eat into your schedule. Software Can Help In order to save time, many sales managers turn to commission software. Time savings is among the best commission software features, and today’s solutions can reduce time spent on commission-related tasks dramatically. Commission software can automate many processes involved in the collection, reporting and payment of commissions, meaning less time spent on data entry and review. Additionally, many of these titles can generate detailed remote-access reports that can be shared with your sales force, your management team, HR and other key departments and people in your organization. This can save you time over manually printing out reports and sending them individually. Finding the Right Commission Software To find solutions that offer the best commission software features, you’ll want to think about what you really want to get out of your experience. Many commission software solutions provide overall management options, but some place a focus on specific parts of the commission management process. You may also want to involve your IT department in the process of selecting a commission software solution. In some situations, your company may need to make back-end changes to accommodate new software, but most commission software easily integrates into existing platforms and systems. Read a similar article about commission contract management here at this page. What determines whether an employee is full-time or part-time? How many hours per week do you need to work to be considered full-time? In the United States, the Fair Labor Standards Act (FLSA) doesn’t prescribe any legal guidelines that dictate whether or not a worker is a full-time employee read more
Whether this is your first time hiring commission-only salespeople or you're looking to pad your team, attracting applicants isn't easy. Commission-only positions are a tough sell, so you have to do everything you can to get top talent.
Not sure where to start? We have you covered. Do the Prep Work First things first, do your homework. Before you even send out a job listing, prepare for your new hire. Figure out the compensation plan, invest in a feature-rich commission management tool, and ensure they have everything they need from day one. Do you have training lined up? What about the office space? Those details matter and can impact an applicant's perception of your company. Be Honest About the Details Don't beat around the bush once you get applicants in the door. Honesty is the best policy. No one wants to hear vague answers about incentives or pay. Be transparent and be clear about what the job entails. Provide the Tools They Need to Succeed There's nothing worse than being a disorganized mess. The last thing you want is to make mistakes and errors on the first commission payout. To avoid any hiccups, give your team the software they need to keep track of all their sales and commissions. A commission management tool can go a long way. Not only does it help them monitor performance, but it can reduce errors and provide real-time reports. Be Upfront About the Sales Process Every business has a unique sales process, and applicants need to know what they can expect. Whether they'll spend their day cold-calling or following up on established leads doesn't matter. Be upfront about how they will make their sales. Some people have strengths in one technique but are awful at another. Please don't drop your new hires into a situation they will immediately fail. Discuss training, talk about any scripts you might have, and provide tips to give them some insight into the process. Encourage Applicants from the Jump Finally, don't forget to be encouraging from the start. Set the stage and create the right power dynamic. Instead of listing off a slew of demands, try to enable them to take control of the position and instill a sense of ownership in their success. Commission-only employees need motivation and support. Their performance ultimately determines their success, but they need to know that they're in an environment designed to help them reach their full potential. When you follow these tips, applicants will feel confident vying for a spot on your team. Read a similar article about ADP integration for commission tracking here at this page. ASC 606 is a major update to accounting standards that was enacted in 2017 for public companies and 2019 for private companies. ASC 606 primarily deals in revenue recognition and how to make it more consistent across companies and industries. In this blog, we’ll summarize the five steps of ASC 606.
Identify the Contract A signed contract is not required under the new ASC 606 standards. A contract can be enforced if these essential parts:
Identify the Performance Obligation This means to identify the promise in the contract to transfer goods or services to the customer. The goods or services should be distinct and easily identifiable. You can consider something a good or service in a contract if:
Determine the Transaction Price This is what the customer will owe to the entity, whether the payment be in cash or in a non-cash form. Allocate the Transaction Price The transaction price should be allocated if the product is software-as-a-service, or SaaS. Since payment is recurring and continuous, there is an ongoing performance obligation. The seller can split this amount to be recognized as revenue upon each delivery. Recognize Revenue Revenue is recorded and recognized in the ledger. Learn More in an ASC606 Webinar As you can see, ASC 606 is exceedingly important to accurately recognize revenue. Accounting teams have been doing this for years now, but it helps to make sure all of your teams are informed and up to date on what ASC 606 means for companies and how it affects them. With an ASC606 webinar, you can learn how ASC 606 impacts businesses, the hidden traps you should be looking out for, and you can learn how sales ops can help your accounting team adhere to these standards more easily. Sign your team up for an ASC 606 webinar if you want to stay ahead of the curve this year. Read a similar blog about future of revops here at this page. Are you exploring potential sales commission structures to compensate and incentivize your employees? If so, you have many options to investigate. Commissions are more complex than most realize, offering flexibility based on the nature of your company and the product or service it provides.
In this blog, we'll provide the basics of the most commonly used sales commission plans. Straight Commissions Here's the most straightforward plan. In it, your company pays for sales commissions and nothing more. What your employees take home depends on how much they sell. It's an easy-to-understand plan that even a rudimentary tool for reporting commission payments can record. Territory Volume Commissions With this plan, geographic locations come into play. You might have a team that works in one defined area for sales. If the entire group collectively meets the sales volume goals over a specified period, they split the commission. Tiered Commissions With a tiered commission, your employees can earn more if they exceed sales goals. Generally, you'll set a rate for one revenue bracket. For example, you might offer five percent up to a total of $100,000 in sales. If your employee exceeds that, they move into the next bracket, which could be seven percent on sales up to $200,000. Revenue Commissions This option is standard for organizations with larger goals than just total profit. Salespeople earn a specific percentage of the revenue. For example, someone working in auto sales might make three percent on the total sales price of a vehicle. Gross Margin Commissions If you choose to use this plan, it pays to have a tool for reporting commission payments. It's more complicated, as it takes expenses into account. Here, your employee would earn a specific percentage on the gross margin alone. Say, for example, that they sell a $150,000 vehicle that costs $100,000 to make. They would only earn commission on the gross margin of $50,000. Residual Commissions Residual commissions are typical for companies that deal with ongoing accounts. You see it often for insurance or SaaS products. Employees earn a commission each month as long as the account continues to remain open. Base Salary Plus Commission If your business experiences high and low sales periods, this plan could be beneficial. In addition to the set commission rates, you provide a base salary. In many cases, the base pay would only cover a portion of an employee's income, such as 60 percent. Which Commission Plan is Right for Your Company? There's no single right choice in the commission structure. Every business is different. Consider how these options align with your operations and choose one that benefits your business and your sales team. Read a similar article about loan commission management here at this page. |
AuthorEmily Clarke writes about business software and services like commission tracking platforms, softwares etc. Archives
March 2022
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