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ERP Software vs. Xactly CEA

See how Xactly Commission Expense Accounting (CEA) compares to traditional ERP software when it comes to ASC 606 (IFRS 15) compliance.

4 min read

To account for commissions under ASC 606 (IFRS 15), organizations must have a reliable and logical system of record. This system must be able to effectively manage and track the amount and detail of commissions data required, integrate with existing financial systems, and provide a clear and secure audit trail.

Now that the ASC 606 is in effect for both private and public organizations, many companies have discovered that spreadsheets are inadequate in managing their commission expense accounting (CEA) processes. While many companies intend to use Enterprise Resource Planning (ERP) software—in lieu of Excel or other homegrown solutions—to ensure compliance, these solutions have and will continue to fall short.

To choose the best solution for managing commission accounting processes, companies should consider the differences between using ERP software versus a purpose-built solution like Xactly CEA. There are several key considerations crucial to making the best decision when it comes to automating processes. Specifically, the ASC 606 accounting standard necessitates that your accounting solution meets five critical requirements.

Requirement 1: Access and Track Commissions Costs at a Granular Level of Detail

ERP Software 

Not designed for large commission data volumes
Only provides journal entries at summary level

Xactly CEA

Provides dynamic and granular commission insights
Offers end-to-end traceability and clear audit trails for commissions

Requirement 2: Manage Accruals and Reallocations

ERP Software

No support included

Xactly CEA

Includes advanced accruals and reallocation processes

Requirement 3: Identify and Apply Adjustments Based on Customer, Contract, and/or Employee Changes

ERP Software

No true-up automation
Additional system required

Xactly CEA

Offers automated true-ups
Provides simplified management

Requirement 4: Monitor and Report on Commissions Reporting

ERP Software

No customizable features for commissions reporting

Xactly CEA

Includes built-in customizable reports

Requirement 5: Interoperate with Upstream and Downstream Internal Systems

ERP Software

Intrinsic integration with general ledger only
Difficult to integrate with other systems

Xactly CEA

Integrates with ICM and downstream financial applications
Supports open data model to support ease of integrations

 

 

Managing accounting processes for sales commissions has only become more complex under ASC 606. Although ERP systems can automate revenue calculations, control revenue processes, and ensure traceability—they were not designed to track the extensive details of incentive compensation.

Xactly CEA meets every ASC 606 requirement and ensures easier compliance. To see the complete comparison between ERP systems and Xactly CEA, download the guide: “Commission Expense Accounting Under ASC 606 (IFRS 15).”