Guide to Sales Incentive Automation

75% of sales reps don’t trust they are paid fairly.

This isn’t surprising since 60% of reps take 3 to 6 months to fully understand how they earn variable pay from their comp plans, and 22% of sales reps have at least one commission dispute yearly.

Those who don’t understand how they earn incentives and experience errors in their pay statements are unlikely to be motivated by their compensation plans. Ultimately, this results in reps missing quotas and organizations falling short of their objectives.

Interestingly, leaders identified “too hard to execute” as their biggest challenge regarding sales compensation planning. This is because plans are too complex, unrealistic, and unattainable, according to our report.

Commissions become difficult to calculate, track, and pay, resulting in discrepancies and operational inefficiencies.

However, the same study revealed sales reps trust their compensation plans more when they use commission software. That’s in addition to the gains from leadership streamlining compensation management when they use commission software.

Sales incentive automation involves using technology and commission software solutions to streamline sales compensation management, commission calculations, and disbursement. It eliminates manual processes, increases accuracy, and boosts trust, transparency, and performance visibility.

Below, learn more about how sales incentive automation can make your job easier.

What is Sales Incentive Automation?

Sales incentive automation is the seamless integration of commission software with your sales tech stack to retrieve data required for automated commission calculations. It automates tasks like commission calculations, payout processing, and performance measurement.

Signs that it may be time to automate sales commissions include:

• Error-Prone Calculations: Are you experiencing frequent errors or inconsistencies in your commission calculations due to manual processes? This can lead to frustration and distrust among your sales team.
• Time-Consuming Process: Does calculating commissions and managing incentive programs take up a significant amount of your team’s time? Automating these tasks can free up valuable resources for more strategic activities.
• Growing Sales Team: As your sales team expands, managing incentive programs manually becomes increasingly complex and time-consuming. Automation can help you scale your incentive programs efficiently.
• Complex Compensation Plans: Do your incentive plans involve multiple variables, tiers, or commission structures? Automating calculations ensures accuracy and simplifies managing these complexities.
• Lack of Transparency: Are your sales reps confused or frustrated by the lack of transparency around their earnings? Automating incentive programs can provide real-time visibility into performance metrics and commission calculations.
• Difficulty with Forecasting: Is it challenging to forecast sales performance and commission payouts accurately due to reliance on manual data analysis? Automation can provide real-time insights for better forecasting and decision-making.
• Desire for Improved Sales Performance: Do you want to incentivize specific sales behaviors and drive overall performance? Automating incentives can ensure clear alignment between rewards and desired sales actions.

If you’re experiencing one or many of the above, you should consider upgrading from a spreadsheet.

Key Benefits of Sales Incentive Automation

Implementing automation can streamline operations, boost accuracy, and drive exceptional results.

The advantages of using compensation management software include:

Increased Accuracy in Commission Calculations

Manual commission calculations are fraught with human errors that result in disputes and wasted time. These same processes also limit transparency and rep understanding of compensation plans. Automation eliminates errors from manual calculations, ensuring fair and consistent payouts.

Streamlined Compensation Management

Automation simplifies the entire incentive management process by eliminating manual calculations for commissions, bonuses, and other payouts. Additionally, it streamlines administrative tasks like multi-level approvals for reps, managers, execs, and finance, as well as payouts and reporting, ultimately saving time and resources.

Enhanced Trust and Transparency

Sales incentive automation provides real-time visibility into earnings and performance measurement, fostering trust between sales reps and management. Quota-carrying reps gain an understanding of how they earn commissions including when and how much to expect in their paycheck. Plus, sales managers gain full visibility into their own attainment, even when team members move between teams.

Real-time Forecasting and Attainment Tracking

Compensation management automation generates real-time data insights into sales performance, allowing for better forecasting and course correction. For instance, it provides executive- and rep-level sales commission reporting on pipeline forecast and quota attainment so leadership can visualize their sales team projections. It tracks how your team is progressing to plan and allows visualizations of total earnings, average effective rate, and plan attainment by rep.

Increased Alignment to Business Goals

Automation allows you to connect comp plans to key business metrics and gives visibility to team members so they can connect their work to the overarching goals. This improves sales reps’ understanding of compensation plans for greater buy-in, motivating them to progress toward milestone achievement and drive business goal attainment.

Model and Test Comp Plans

Sales incentive automation enables you to predict how much commission plans will cost your organization according to attainment bands and test future plan changes using past performance data. Compensation reporting and modeling tools allow leaders to measure and model the business value and performance of their revenue teams’ compensation plans.  

The ability to see real-time attainment trends, recognize performance deviations and predict new plan costs allows you to optimize sales team efficiency and build confidence in incentive structures. These automations save time and are more accurate than a series of compensation spreadsheets and reports from your CRM and payroll platforms for scenario modeling.

Reporting on Compensation

Compensation data can inform future comp plans and strategy by measuring the business value and performance of the sales team’s compensation plans and performance. This allows you to confidently optimize your sales strategy, streamline sales processes, and boost performance. For instance, you can spot hidden trends, benchmark performance, identify performance gaps, optimize product strategy, maximize profitability, and reward top team members.

Implementing Sales Incentive Automation with QuotaPath

QuotaPath is a sales incentive automation solution that simplifies compensation management and offers the following benefits.

• Integration with Tech Stack: Seamless data flow ensures accurate calculations and eliminates manual data entry. QuotaPath enables you to easily pull data from various data sources to your payment processing platforms.
  • CRM integration options include HubSpot, Salesforce, and Microsoft Dynamics. Other integrations include applications such as QuickBooks, Xero, Maxio, Oracle NetSuite, and spreadsheets.
  • Easily map your data with new plans using our Mapping Managers, which enables you to build a mapping template once to save, edit, and reuse anytime you need to add a plan.
  • See earning data directly in HubSpot or Salesforce without toggling between systems.
    
• Customizable Compensation Plans: Design flexible plans that adapt to your needs and sales goals as you scale in our system with our plan builder — or use one of our templates.
  
• Optimizing Sales Performance through Automation: Automate tasks and workflows to free up time for strategic initiatives. QuotaPath enables you to surface tasks needed at the rep and admin levels to individual home dashboards and ensure accurate and on-time payouts.
  
• Measuring Compensation Plan Performance: Track key metrics to evaluate your incentive programs’ effectiveness and identify areas for improvement. QuotaPath offers reporting options, including Deal Earnings vs. Deal Value, Attainment Over time, Earnings vs. Attainment, and Top Commission Rates Per Deal.
  
• Encouraging Accountability and Performance: Real-time data visibility motivates reps and fosters a performance and sales accountability culture. For instance, multi-level approvals enable reps to sign off on their upcoming commission checks before they are finalized. This creates ownership and streamlines the approval process for those who conduct final signoffs.

Getting Started with QuotaPath

Sales incentive automation eliminates manual compensation management processes and increases accuracy, trust, transparency, and performance visibility. QuotaPath is an all-in-one sales incentive automation tool that simplifies compensation management from start to finish.

Getting started with QuotaPath is easy. Build your sales compensation plans from scratch or use a free comp plan template from our compensation plan template library. Sync your CRM or data source by selecting your integration, authenticating it, and mapping it. Then, you can invite your team members and start automating your sales compensation management. Get started with a free QuotaPath trial or schedule time with a team member to learn more.