As the platform powering your sales processes, record commissions inside Salesforce does have its benefits (we do play devil’s advocate towards the end of the guide). In some organizations, it’s not just the sales team – service agents, marketers, and other roles can also work on a quota basis.
Getting commission management right will not only improve your operations (plan administration), data quality (for reporting) but it will also motivate and incentivize your teams.
Can Salesforce calculate commissions? While Salesforce does not have a commissions module, you can do commission and compensation management in Salesforce. You have two options:
- Apply some admin magic (formulas to calculate commissions, configuring Salesforce like this).
- Invest in a third-party app.
The second option is clearly more scalable. This guide will cover some options to help track Salesforce commissions by using third-party providers who have nailed down the processes required.
Salesforce Commissions: What To Look For
When starting your research, you’ll come across multiple different terms. Here are some definitions, in case you’re not familiar with them:
- Sales Capacity Planning: “A type of financial model that helps plan your company’s top line by using sales rep performance to forecast future bookings” (source).
- Quota Allocation: How sales managers set the target financial goal (quota) for individual sellers and/or teams – and how that’s communicated to those individuals/teams.
- Territory Alignment & Optimization: The process of redistributing or reallocating territories among salespeople. These can be geographical regions, accounts by industry, and more. Optimization involves ensuring that each territory is covered with sufficient resources for the potential revenue it can deliver – and rectifying gaps where coverage is insufficient (read more).
- Compensation Management: Determines “employees’ appropriate pay and benefits…uses financial and nonmonetary benefits to attract recruits, reduce turnover, spur performance and boost employee engagement” (source).
- Commission Expense Accounting: The amount that appears on an income statement, representing the commissions paid during the same period that the related revenue was earned.
- Forecasting: All about likelihood – in this context, forecasting could relate to how much commission expenses will cost the organization (according to the likely quota attainment) when the next payroll is processed.
- Coaching Quota Attainment: Enables managers to support their salespeople to hit their target by spotting a lag in performance early and proactively advising on how to fix the situation.
- Objectives Management: Clearly defined objectives (e.g. commission) that steer the organization in the right direction, agreed to by both management and team members.
With those features and functionality in mind, here are some questions you can ask yourself during your investigation phase, in order to identify a suitable solution more easily:
- Does it need to be Salesforce approved? Solutions that are listed on the Salesforce AppExchange marketplace have been through a thorough security review, and therefore get Salesforce’s vote of confidence.
- How far into the commission management process do you want to go? You can think of the end-to-end commission management process as plan – execute – optimize. All of the featured providers cover the “execute” phase, others extend to the “plan” and/or “optimize” phases. Not every solution’s scope will cover the bullet-pointed list you read above.
- Do you want mobile app access?
Salesforce AppExchange Commission Management
If someone says “Salesforce” and “commissions”, seasoned professionals will reply with: “Xactly”.
Over the years, Xactly has been front and center in the space, with a fully-fledged set of features covering the “planning”, “execution” and “optimization” phases, end-to-end.
Xactly claim to give their customers a “unique data set” to work with. They have attracted big-name customers such as Hyatt Hotels, DocuSign, Cox Automotive, and Proofpoint (featured on their AppExchange listing).
Other Salesforce Commissions AppExchange Options:
- Easy Incentivizer, a commission calculator app | AppExchange
- Commissionly, “Intelligent Commission Payments Made Simple” | AppExchange
- Leaptree, Salesforce Native Sales Commissions Management, at a low price point | AppExchange
- CloudComp, Salesforce native | AppExchange
- QCommission | AppExchange
More Salesforce Commission Management Options
These vendors are some of the best in the market. While they weren’t built specifically with Salesforce in mind, each offers a solid integration to Salesforce (connectors or accelerators, to allow you “plug in and play”), ensuring a smooth data sync.
- CaptivateIQ, named the emerging favorite Compensation Management Software leader in 2021 | Website
- Anaplan, corporate performance management software aimed more towards finance teams for heavy-duty financial planning | Website
- Quotapath | Website
- Spiff, a “new class of commission software” | Website
Should Commissions Be Managed in Salesforce?
An interesting thought was flagged following this guide being published, which led to us asking the question: Is Salesforce actually the right place for managing commissions? Organizations will typically tie commissions management into their invoicing tool, as “a lot can happen between Opportunity “Closed Won” and the invoice [being paid]”.
So, before diving into managing commissions with Salesforce, question whether your Salesforce has access to invoice data, either via a Salesforce-based ERP (like Rootstock), or an integration with off-platform ERP. Ot
It makes sense for sales teams to record commissions, which means that it also makes sense to add commission management to your Salesforce org. Between the two options (in-house admin “magic” and third-party solutions), an app is more scalable and therefore easier to implement.
A commission management app is great for streamlining operations, ensuring data quality, and incentivizing the team, and there are plenty of options to choose from.
Does your org record commissions? Let us know in the comments.