7 Tips to Improve Your Year-End Commission Calculation Process
There is always a lot to handle for the year-end close and there is never enough time. It’s reasonable to expect that you will forget important steps for processes you only complete once a year, but it’s unreasonable when those forgotten steps waste your time and cut into your holiday plans.
Ready to save time this year with a faster and easier year-end commission calculation process? All it takes is making your list and checking it twice… but before Christmas!
The EthoTech team has already made you a list, so you can start your year-end process strong. All you need to do now is follow along with each step when you’re ready, verify that you completed everything, and then relax and enjoy your holidays.
7 Tips to Follow for an Easier Year-End Commission Calculation Process
Follow along with this list of top tips for success with the year-end close in 2022.
1. Collect Annual Data
Your historical commissions data can provide a wealth of knowledge as your business grows and your commission structures evolve – so make sure that you run your reports by year end and keep them to use as a resource for planning future variable compensation plans.
2. Compare Expected Revenue & Commission vs. Actuals
It’s a common practice to evaluate your quotas throughout the year and make adjustments when necessary. At year end, compare how your sales team did against their quota and adjust revenue expectations for the new year accordingly. Clarify your insight when you compare expected vs. actuals before January.
3. Calculate Annual Bonuses
Determine if any of your team members qualify for annual bonuses and calculate those amounts now. Transparency and timeliness in the commission calculation process demonstrates to your team members that you value their hard work.
4. Use Hard Data to Assign New Sales Quotas and Goals
Use your actual performance to craft your company’s revenue budget for 2023. Combine that with the hard data you have on commissions earned per team member to assign realistic sales quotas.
5. Reconcile Your Accounts
Don’t miss the important step of reconciling your commission expense and commission accrual accounts! This will save you time and reduce headaches later.
6. Plan Your 2023 Structure & Assess Its Impact
It’s a good idea to keep trying new commission structures as your team members’ motivations, skills, customer base, and territories evolve. If you are the commission administrator but you don’t make the rules, start collaborating with the Sales Manager now to craft smart updates together. Don’t wait until January.
Don’t forget! If your new structure will impact unpaid commissions such as existing invoices that are waiting for payment, make sure to assess that impact before making any updates.
7. Plan Your Year-End Timing
If you are using Commission Plan, remember that it’s best to enter your NEW rates before any new transactions are entered on January 1, 2023.
Even if you miss entering your NEW commission rates before the new year, you can use this Knowledge Base article to run Commission Plan Utilities to update your commissions. If you are not comfortable completing the steps in the article, do not hesitate to contact EthoTech for assistance. We are here to help.
Our Best Time-Saving Tip: Ask for Help When You Need It
Here at EthoTech, we are committed to making your commission calculation process easier every step of the way. If you need assistance getting ready for the new year, please reach out now and schedule your consulting time.
We look forward to helping you make your list and check it twice, so you can finish your year-end process with time to spare.
Since 2002, companies across every sector have relied on EthoTech for the right tool for tracking, calculating, and paying variable compensation. We provide solutions, integration, and support that is focused solely on integrated variable compensation software for Microsoft Dynamics GP and Microsoft Dynamics 365 Business Central. It’s all we do, and we do it better than anyone.