Sales Compensation Blog

One of the most common unproductive tasks sales people are frequently compelled to do is their own commission calculations and accounting. This practice, often called shadow accounting, is an entirely wasteful process that uses valuable hours that salespeople should spend selling.

It boils down to an issue of trust. Does the rep trust the system that the company has in place? Does the rep understand the commission agreement in place? Can the rep "see" what will be paid out in the future? You can eliminate this need for 'shadow accounting' by making incentive structures less complex and build trust in your plans. When sales reps trust the plan, they feel that the commissions that they are being paid are accurate. Therefore accuracy is not the issue, the belief that the plans could be inaccurate is the issue. You can start by asking this question: When the sales rep gets their plan document to start the selling year, is that document understandable, concise and clear? If you have used Best Practices when building your plans, people will be able to see where they can make their money and not have to dig through the plan. The plan document will be able to communicate these ideas simply if there are fewer than four measures that they will be paid on contained in the plan. The easier is the goals of the plan are to understand, the greater the trust and consequently more time will be spent selling and achieving both individual and company goals. When a plan is simplified, the fear that there are errors disappears and the "shadow accounting" problem soon dissipates.

Christopher Mason
Director of Sales