If you decide that sales commissions make sense for your organization, you’ve done the easy part. Now the hard part: actually defining the commission structure, and then keeping track of it. Many popular accounting and CRM software titles offer commission tracking, and in a pinch, you can always track commissions in a spreadsheet.
When choosing the right tracking tool for your organization, ask the following questions:
Does it integrate with your accounting system? Integration is especially important if you only pay commissions on payments received (as opposed to sales made). If there’s no integration, the commission tool by default requires double data entry.
What happens when you change commission rates? If it retroactively changes the commission rates, all of your historical payment amounts will be off.
Can salespeople see their own progress? Not only is it motivating to see your sales and commission figures rise, but any salesperson worth their salt would be meticulously tracking their commissions anyway. Giving them access to real-time figures saves this duplication of effort.
Can it respect minimum and maximum rates? This is important if you cap commissions.
Does it keep a history? New commission payments shouldn’t overwrite past ones.
Does it handle bonuses? Ideally, it will calculate bonuses on its own based on logic you enter — you shouldn’t have to manually calculate and/or enter bonus payments.