Tracking business performance is a top priority. As a CFO, I think that no department affects performance more than sales. Which is why CFOs understand the importance of tracking and monitoring sales metrics in order to keep a close eye on the pulse of their company’s financial situation. But how this data is made available to CFOs today can mean a make or break difference to the organization.
To make decisions in real-time – and do our part to keep the business on track – we, as finance leaders, need easy and instant access to data that is up-to-date, accurate, and comprehensive. The total cost of sales commissions can have a big impact on your books. Having this data readily available delivers tremendous value.
According to a 2016 survey of finance executives published in CFO Magazine, 94 percent say the ability to dynamically plan “in the moment” is critical to react in a fast-changing business world. No one in finance wants to find out about unplanned compensation expenses after the close of the quarter.
You Can’t Rely on Yesterday’s Sales Metrics
No CFO wants outdated or inaccurate numbers. For public companies that operate under the watchful eye of Wall Street, relying on the wrong figures can ruin a quarter – or worse. Everyone is looking to you for an overall picture of the organization’s health and growth. However, sales compensation – and the metrics associated with it – is more fluid than in any other department in your business. Sales organizations typically operate with commission-based pay structures.
Because these often vary by sales role, product line, or level of quota attainment, payment models can be highly complex – and fluctuate on a daily basis. It’s estimated that 85 percent of companies still use spreadsheets to monitor and manage sales compensation. Manual, time-consuming and error-prone, spreadsheets don’t adequately support a CFO’s need for insights when it comes to sales metrics.
Automated Processes Increase CFO Confidence
With the ability to view sales information in real-time, CFOs gain immeasurable value. We’re able to make decisions more confidently when we know that they’re based on the very latest data available. Xactly automatically updates all sales compensation data and provides visibility across the entire organization. Finance departments can instantly access and view compensation data – broken down by individuals, by customers, or by territories.
They can look back at compensation data historically to get the most complete picture possible. They can also see the impact of incentive compensation on team performance. With accurate and up-to-date records on sales performance metrics, CFOs can make smarter business decisions. They can quickly and easily:
- Improve forecasting accuracy by seeing what’s still on the books
- See if they’re on track with commission budgeting
- Increase confidence in the accuracy of their compensation calculations
- Gain better insight into quota attainment
Combined, these capabilities can make it easier to achieve earnings-per-share accuracy by eliminating unpleasant and unexpected financial surprises. With powerful analytics, you can get even deeper insights into sales metrics.
By benchmarking your compensation plan with competitors, or having the ability to model different scenarios, your organization can optimize your plan design and drive better performance. Sales commissions can be complex. An automated system makes it simpler to organize, summarize, and report on compensation data in meaningful ways for the business.
With the ability to quickly go back and properly look at data across different systems, CFOs can alleviate risks. With real-time insights and analysis, we have the ability to mitigate unforeseen expenses, close books more accurately, and make strategic choices for the business. To learn how modernizing your sales compensation plan can benefit your organization, contact Xactly.