How to Automate Sales Commissions in Salesforce: Start with good Sales Data!

Do you want to automate your sales commissions in Salesforce? 

In our experience, the most overlooked aspect of sales commission automation projects, is the sales data that constitutes the "basis for commissions". What do we mean by the "basis for commissions"? 

Consider these 3 key components of sales commissions:

  1. Sales data
  2. Commission rules
  3. Commission results

The process of calculating commissions goes like this: 
For each instance of a row of  commissionable sales data (#1),  one or many commission rules (#2), will be applied to produce commission results (#3).

So the sales data (#1), is obviously the foundation of the commissions calculation process right? It is literally impossible to process commission rules (#2) and generate commission results (#3) without the correct sales data (#1).

OK, then why is it that so many companies seem to begin commissions automation projects without getting their sales data right for the project first? Perhaps it's just because many people haven't ever managed a sales commissions automation project before. 

So how can you avoid this pitfall and get your sales data right for your sales commissions project before you try to automate it? 

Think about it this way:  Start by imagining a simple commission example. Let's say that for each closed/won Opportunity (#1 basis), our sales rep, Julie, earns a 10% commission on the amount at close date of opportunities she owns (#2 rules), So if Julie is the owner, the Opportunity amount is $10k and the close date is 2/18/22, then Julie will earn a commission of $1,000.00 during the February '22 pay period which she will receive during march when February payments are made (#3 commission results)

So if we look at #2 (commission rules), we can see precisely what we need in our sales data. We need to be able to report out closed/won opportunity amounts, by owner and close date. Simple right? Of course! Remember, this was our simple example... Now here's the problem. What if there's another little commission rule hiding behind the scenes (#2), which states that Julie only earns her commission when the closed/won Opportunity amount is actually paid by the customer?

Now if you repeat the same approach you will quickly identify that in order for your sales data (#1), to be a sufficient basis for the new commission rule (#2) requiring sales to be paid by the customer prior to generating commissions, then you can hopefully see for yourself now that each row of sales data (#1) must now represent the amount that was paid, not the amount that was closed/won. 

Another example would be a commission rule which states that Julie gets a higher commission rate on "new logo" sales over "renewal" sales. Can you see where this is going this time? It means that now every row of sales data will need to contain an attribute to distinguish "new logo" from "renewal". 

So the moral of this story is this: To get your sales data right for a commissions automation project, you should confirm that each condition being called out in your commission rules such as "ARR" "closed/won", "amount paid", "margin", "new logo" etc. can be mapped to attributes that are included within your sales data. Then you'll be ready to implement a commissions automation tool such as our CloudComp Commission Anything™ for Salesforce App to process your rules against your sales data and generate your commissions and payment results.

Remember this simple 1-2-3 of sales commissions automation! If you understand these principals, then you're likely to save a lot of time and expense on your commissions automation project! 

Good luck with your project and feel free to Contact Surfwriter if you would like more information on our sales commission automation tools and implementation services for Salesforce.