As 2017 draws to a close, you’ve probably got a lot on your mind. The holidays, gifts, travelling to visit family, that ski vacation you’ve been planning, and…..yes, incentive compensation.
That’s right, it’s time to get your incentive comp plan for 2018 ready.
Like most comp managers, you will probably re-evaluate the plans and processes that drove their sales teams (or drove them crazy) in 2017. This year, however, also consider the operational and process pieces of your sales compensation strategy. Those are strategic too.
As plan changes are being configured for the new year, use the opportunity to take a step back and see how you can optimize your end-to-end incentive compensation process within your CallidusCloud system.
Here are three crucial areas to look at to maximize your impact in 2018. We’ve organized them into three handy categories: Collect, Communicate, and Control.
Collect: Optimizing data feeds and collection
When considering how incentive compensation calculations are made, take a look at the various data feeds that are needed in the system to start processing calculations. Ask the following questions:
- How do you get all the pieces of compensation-related data into the tool?
- How much time do you spend on formatting and loading your data?
- Are you able to automate some of those transformations?
- Do you have many different data sources that you’re trying to bring into one?
- Are there any data sourcing issues?
Communicate: Enhancing effectiveness of reports
If a report is published but no one finds it useful, does it make a difference? Don’t let your reporting be like the proverbial tree falling in the forest that no one hears—use them as an opportunity to get buy-in and drive from others in the organization apart from the incentive compensation team.
Evaluate the effectiveness of your reports with the following questions:
- Are your current set of reports effectively communicating how the plans are calculated?
- Do you receive many inquiries about how you arrived at a commission or bonus amount?
- Are there requests for new features or enhancements for reports?
- Do key stakeholders find your reports useful?
- How long do payees spend looking at reports? What is the open rate for reports?
Control: Improving auditability of sales comp transactions
With new rules to be enforced in 2018, such as the new financial standards from ASC 606, corporate accountability will be in the spotlight in this new year. Consider audit-preparedness in terms of incentive compensation with the following questions:
- How do you ensure traceability within your incentive compensation tool?
- How are manual payment adjustments captured?
- Do you have requests tracked in repository or in email?
- Have requests gotten lost in the shuffle so that they need to be made multiple times?
- Are approvals tracked in a system with sign offs?
Are there challenges that you face today in these areas? Probably. In fact, it may be more complicated right now to change the operational aspect of compensation plans than the complexities within the compensation plans themselves.
Consider consolidating data feeds or cleansing your data, taking advantage of CallidusCloud Standard Commission Reports and looking at options to make incentive compensation transactions more trackable. As you build out your processes for complying with the ASC 606 or IFRS 15 standards, consider moving off spreadsheets and automating your process with a complete revenue recognition solution.
Look out for our second blog in this series on optimizing incentive compensation in 2018 from a more granular perspective as we dive into questions to ask from a calculation and crediting standpoint.