Paying sales reps on invoices raised or paid is a common commission structure in staffing, recruitment, and IT service industries.
This means you are probably looking at your invoice software and spreadsheet to match deals with invoices and calculate commissions. Manually doing this is time-consuming, and we understand that.
You can use a commission tracker to automate the entire process with a simple integration. Read on to learn more about how to simplify paying commissions on invoices.
2 ways of paying commissions on invoices
Let’s understand the two common ways of invoice-based commissions:
Completely pay commissions on invoices paid/raised
In this model, commissions are only paid out when invoices are raised/paid. This ensures that commissions are based on actual revenue received, protecting the business from paying out commissions on potentially uncollectible invoices.
It aligns the interests of the sales team with the company's financial health, as they are incentivized to ensure clients pay their invoices promptly.
Partially pay commission on invoices paid/raised
The hybrid model splits the commission payment into parts. A portion is paid upfront when the deal is closed, and the remainder is paid when the invoice is issued/settled.
This structure balances the need to incentivize sales staff with immediate rewards while maintaining a safeguard by tying the final commission payout to the actual receipt of payment. It motivates the sales team to close deals and also to follow up on collections.
Calculation of commission on invoice raised/paid on a spreadsheet
Managing commission calculations manually through spreadsheets can quickly become overwhelming. Here are some common challenges:
Tracking invoice payments in a whole another software
You have to check the invoice software and match the invoices with deals. Keeping track of which invoices have been paid and which haven’t is a nightmare, especially as the volume of transactions increases.
Sometimes, invoices are not paid in full. Customers pay it partly or in installments. Tracking payments and calculating proportionate commissions is difficult to do on spreadsheets manually.
Time-consuming data entry reconciling invoice software and CRM
When tracking invoices, you also have to enter the necessary details in your CRM and spreadsheets for the calculation to occur. Entering data manually is tedious and time-consuming. It also increases the risk of human error.
Lack of real-time updates
Spreadsheets don't update in real-time, as most of the time, it is a manual effort, meaning you don’t have access to the most current commission calculations. This can lead to longer payout cycles as the calculation takes too long, consequently demotivating RevOps members and sales reps.
How a commission software simplifies paying on invoices raised/paid
A commission software automates and simplifies the commission calculation process. Here’s how it can transform your business:
Automate calculation with high accuracy
With ElevateHQ as your commission software, we can easily set up your commission plan. The best part is that we invest in training you to independently work on our software to make changes and manage commission rules, logic, and everything else.
Because the calculations run in an automated manner based on the integrations and do not manually enter data, the accuracy is 100%. This way, you can easily avoid underpayment and overpayment during commission payouts.
Easy Integration with spreadsheets, CRM and invoice software
Commission trackers often integrate seamlessly with your existing invoicing and payment systems. You can also integrate them with your CRM, and commission trackers can pull data from there. This ensures that as soon as an invoice is raised or paid, the commission calculations are updated automatically.
With the integration, you can choose how often the sync should happen, for example, real-time, every 4 hours, 2 days, etc. This particularly helps when invoices are paid in parts. It will sync and automatically calculate commissions as per your logic.
With real-time updates, commission trackers provide immediate insights into commission status and payments. This transparency helps keep sales teams informed and motivated.
Download custom and detailed reports
ElevateHQ offers comprehensive reporting features, allowing you to generate detailed reports on commission payments, outstanding invoices, and overall sales performance.
Instead of downloading reports from multiple tools and reconciling them, you get comprehensive reports from our commission software, which allows you to manage end-to-end operations.
Integrate your invoice software with ElevateHQ and automate calculations
Implementing a commission tracker can be a game-changer for companies that pay sales commissions on invoices raised/paid. By automating commission management, you don’t have to get bogged down in administrative tasks.
Commission software can significantly reduce the inefficiencies of manual calculations. With the right tools, you can simplify your commission management, enhance accuracy, and empower your sales team today.
