Sales Ops
7 min read

5 benefits of abandoning Excel to calculate commissions!

Find out why companies are moving from Excel to commission management software, and how it benefits them!

Axel Poitral
Axel Poitral
CPO @Qobra
December 12, 2022
5 benefits of abandoning Excel to calculate commissions!

Whatever the size of the company, Excel is still too often the "default" solution for managing commission plans.

Indeed, due to its popularity (750 million users worldwide), this tool is generally implemented as standard in most companies. This explains why it is generally used by these same companies to calculate sales compensation.

Yet Excel is hell for RevenueOps & Finance teams, and they are the first to admit it! However, it is not so easy for them to convince the other stakeholders in the company to change their era by adopting a commission management software...

"Why pay for a tool when you have Excel?", "We only calculate commissions every quarter, we don't need a tool! "We have managed to calculate commissions until now, so why change?"...

Let's start from the beginning! What are the objectives of commissioning schemes?

Does Excel meet even one of these objectives?

No! And that is why Qobra was created, to help companies make variable pay a real lever for motivation, performance, attractiveness and loyalty!

How does it work? How is Qobra better than Excel?

This is what we will explain in 5 points in this article.

(PS: Feel free to share this with any commission software holdouts in your company)

1. Calculate the right commission amounts

Apparently simple to use and easy to set up, Excel is not without its faults. In fact, it is very common for an Excel file to contain errors... According to some studies, more than 90% of Excel files contain errors!

📖 For the record...

In 2017, Oracle's sales team sued the company, seeking $150 million in damages for underpaid commissions. In 2019, IBM lost a lawsuit against its salespeople for refusing to pay commissions.

Although it is intended to calculate any operation, Excel needs to be set-up by humans beforehand. And as the saying goes, "the error is human"...

"With Excel, there were some unexplained differences between the theoretical amount of commissions and the actual amount. With Qobra, we were able to solve this problem."

Vladimir Ionesco, Director of Global Sales Performance at Doctolib

In the end, any miscalculation of commissions leads to the company paying out more or less than the actual amount. In both cases, the consequences are disastrous, i.e. immense frustration for the beneficiaries or financial loss for the company.

In addition, the risk of errors means that the teams in charge of commissioning have to check a whole set of data (calculation formulas, beneficiaries, etc.) at each new commission calculation period. This is a very time-consuming task and is therefore often not appreciated. 

So although Excel is an inexpensive or even free solution, the company can very quickly lose out. Moreover, in the event of an error, it is impossible for the company to turn against Microsoft, it must take the blame itself.

And with Qobra?

The commission plans only need to be implemented once and then they apply to all beneficiaries. With Qobra, there is no need to pull formulas and ensure that all cells in a column are accurate and up to date. Moreover, whenever there is an error in a calculation formula, it is reported by the Qobra teams. Finally, all beneficiaries have access to the commission formulas, so if they spot an error, they can report it directly on the platform to their manager.

commission error Qobra
"With Qobra, there is no potential discussion around calculation errors."

Pierre-Gaël Pasquiou, Chief Sales Officer at Welcome to the Jungle

2. Simple access to relevant data

When a company starts its activity, in order to grow, it employs one or two sales people. At this point, commission calculations are usually handled internally by one person through a solution such as Excel. Most of the time, commission plans are quite simple.

However, every business is bound to grow. When the time comes, the number of salespeople increases and commission plans multiply.

"The moment you start having two, three, four, five Sales teams, it's very difficult to know if the commission plan is being followed by the letter between imports from Salesforce, manual adjustments, what is sent to payroll etc."

Vladimir Ionesco, Director of Global Sales Performance at Doctolib

Ultimately, the number of beneficiaries increases, but so does the number of people involved in the commission plans (Managers, Sales Directors, Sales Ops, Finance Manager, Human Resources, etc.). Their role and involvement with commissions is therefore logically different. However, they have access to the same information, so it is very difficult for each of these people to simply access the information that concerns them.

And with Qobra?

Through its solution, Qobra offers access and a vision that is entirely modular according to the different roles in the company (Administrator, Managers, Sales, etc.). Each user therefore has a vision that is entirely personalised and adapted to them.

"Qobra's dashboard gives me a global view at a glance. I can look at the total amount of commissions paid, do a quick check against our actual achievements."

Fabian Q.Veit, CEO at Make

In addition, Excel does not integrate any inter-user communication solution, which makes the management of commissions, which as we have seen, is a subject involving many collaborators, even more complex.

And with Qobra?

Qobra allows each user to communicate directly with their peers. In this way, a salesperson can ask his or her manager questions whenever he or she feels the need. This communication system can be directly linked to Slack or Microsoft Teams.

communication in app Qobra

3. Be linked to peripheral software (CRM, ERP, HRIS, etc.)

As we have just seen, commissions involve many areas of the company, from sales to finance. This implies a connection between commissions and the different software used by these same divisions, i.e. CRM, ERP, HRIS, payroll software, etc. 

"With Excel, we used to update the commissions on a monthly basis, so not at all on a weekly or daily basis, because it took too much time. We had to collect all the different information, whether it was quotas, team changes, then readjust all these elements, update the Excel template, have it validated by the manager and finally communicate it to the teams."

Aude Cadiot, Revenue Operations Lead at Spendesk

However, to date, Excel does not offer the possibility to connect to one of them, and therefore requires manual management between the various teams. This manoeuvre therefore leads to a high risk of error and a considerable loss of time.

And with Qobra?

Our software integrates with all CRM, data warehouses and ERP systems on the market (Salesforce, Snowflake, Google BigQuery, PostgreSQL, Hubspot, etc.). In addition, the company always has the option of making manual adjustments.

Qobra integrations

 

4. Display readable and transparent data

"With Excel, they actually had no real-time visibility... It created a lack of confidence, a BlackBox feeling."

Aude Cadiot, Revenue Operations Lead at Spendesk

Most companies that manage their commissions in Excel do not provide access to their beneficiaries. Instead, they announce the amount of their commissions at the time of payment, without showing them the details of the calculation. However, this lack of transparency leads to mistrust and frustration among salespeople as they have no way of knowing whether their commission amount is accurate. In the end, this lack of transparency leads to conflicts and wasted time, but it also leads to demotivation and turnover.

According to a Qobra & Modjo study on commissions in France, 68% of employees who use Excel or Google Sheets to calculate and manage commissions are not satisfied. In contrast, 85% of employees who use commission calculation and management software are satisfied.

And with Qobra?

Qobra users can consult all the values of each commission plan (without being able to modify them) in full transparency, autonomy and detail. They also have access to their current and past commissions.

"Qobra allows us to have better tracking over time, not to accumulate historical errors and for each Sales person to know the commission they earned 3 months before, the month before, and to have visibility on everything." 

Clément Bouillaud, Director of Operations at Partoo

On the other hand, some companies choose to give their sales staff access to the Excel spreadsheet, but in this case, most of them have difficulty finding the information they are looking for and understanding the details of their commissions. This is especially true when there are multiple and complex commission plans. As mentioned earlier, Excel is a spreadsheet and not a commission calculation program, so its appearance is consistent with its primary use. 

Excel is not a tool that rhymes with transparency and readability, two characteristics that are essential when talking about money, especially commissions. Furthermore, without real-time access to their target achievement, salespeople have no visibility and are therefore not really encouraged to sign customers.

According to a study carried out by Qobra and Modjo on variable compensation in France, only 30.1% of employees using Excel or Google Sheets exceeded their targets in 2022, while 61.9% of employees using commission calculation and management software exceeded their targets.

And with Qobra?

Thanks to its carefully designed user experience, Qobra provides its users with important information at a glance (amount of commissions, percentage of achievement, etc.). This experience and design contributes to their performance, as they are more likely to consult their goals regularly.

Dashboard Qobra
"I know that having that visibility there on a deal that can be signed is going to give me motivation to go out and get more deals and to go, to keep performing."

Matthieu Saroli, Enterprise Account Executive at Didomi

5. Building effective commissioning plans

Because it was not originally designed to handle commissions, Excel does not provide any advice or support to its users on the subject.

It is therefore up to the management, sales, finance or HR teams to build or review their own commission plans (plans, rules, objectives, amounts, bonus accelerators, etc.). This can be a difficult or even impossible task, depending on the teams' knowledge of the subject.

Moreover, once the commission plan is defined, they have no feedback on its relevance. This is because Excel does not identify the most effective compensation plans through sales performance reports.

"With Excel, there is a grey area that is created where in fact you are not really sure that the commission model and the bonus are being applied, which raises a real question of post performance evaluation versus motivation."

Vladimir Ionesco, Director of Global Sales Performance at Doctolib

In general, commission managers are not familiar with the practices of companies of the same size or in the same sector. This is a key factor in attracting, motivating and retaining employees. According to a Primeum, comment-remunerer.com and MeteoJob study, 88% of company directors and sales managers think that their variable pay system should be improved.

And with Qobra?

During implementation, Qobra's teams personally guide each company in setting up or reviewing their commission plans to ensure their relevance before deployment. Then, from the platform, it is possible for managers to generate a report in one click (key KPIs, team performance, commission amounts, etc.).

"Before Qobra, there was a clear inability to fully track the link between performance and bonus, and therefore to make, and operate on, the right operational and commercial decisions."

Vladimir Ionesco, Director of Global Sales Performance at Doctolib

The final word...

As you will have understood, Excel is often an "easy solution" for managing variable pay plans and calculating commissions. However, it quickly becomes obsolete in the management of commercial performance as the company grows. 

At this point, equipping yourself with commission calculation software such as Qobra is therefore relevant and allows the company to play on the attractiveness, motivation and retention of its talents.

To ensure that you select a relevant solution for managing and calculating employee commissions, it is essential that the following criteria are met:

  • Flexible and adaptable to the growth of the teams, and to each role in the organisation (Administrator, Finance, managers, sales, etc.)
  • Transparent and readable
  • Fluid and collaborative
  • Sustainable and secure
  • Connected to other company tools (CRM, ERP, HRIS, payroll software, etc.)
  • Support team available

Many companies of different sizes and sectors (Spendesk, Doctolib, Make, Payfit, etc.) already trust Qobra's teams to manage and calculate the commissions of their employees!

Want to know more?

Our teams are at your disposal to assist you in managing your variable pay plans.

Sommaire

Axel Poitral
Axel Poitral
CPO @Qobra
December 12, 2022