Can your commission calculations withstand an audit?, By Teanna Spence

Can your commission calculations withstand an audit?

Teanna Spence – Sales Compensation -�

audit2Now that you have a few months of commission calculations under your belt on your new sales compensation plans, how confident are you that the spreadsheets are set up exactly right and those calculations are perfect?

I audited hundreds of spreadsheets over my career and I can honestly say that there is at least 1 error in each of them if not more. Spreadsheet errors are costly.

Funny thing about errors, the compensation analyst�s phone will be ringing off the hook when there is an error that results in underpayment but rarely hears about an overpayment. Often when you confront the rep who was overpaid they say they didn�t realize it!

The biggest challenge is the person who created the sales compensation plan is not always the same one who created the spreadsheet and the person who created the spreadsheet may not be the person who calculates the commissions. There are often rules that are lost in the translation between the plan�s designer, written plan doc and the spreadsheet that is used to calculate commission payment. Sometimes the plan documentation is just a shell and doesn�t spell out all the rules needed for the payment calculation.� Sales MotivatorTM�helps you here. Once the plan designer creates a plan in Motivator, that exact plan is used to calculate commissions. Nothing gets lost in the translation!

The biggest problem with using spreadsheets is there is no auditability. The audit trail is as good as the person who is putting the comments in the cell. We all understand that anything in the spreadsheet can be changed including the formulas, sales data, rate tables, and crediting relationships.

How easily can you prove that your sales data on your commission spreadsheets matches the sales data in your accounting system of record? Can you prove that only one rep got credit for the sale and that it didn�t end up on another rep�s commission sheet by accident? Can you show the relationship between the closing rep and the support and management team to ensure proper crediting? Can you guarantee that the formula calculations in your spreadsheet match the signed plan documentation and that each sale was paid at the appropriate rate?

– See more at: http://www.cornerstonesoftware.com/blog/can-your-commission-calculations-withstand-audit#sthash.ogXvHr6U.dpuf

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