This is a guest post written by RevPartners, a management and consulting firm that supports scaling companies with RevOps strategy and execution for teams without a dedicated RevOps function.
Spreadsheets? More like deadsheets. If you’re using spreadsheets to manually track sales commission, you’re living in the past, inviting errors, and burning the one resource there never seems to be enough of…time! It doesn’t have to be this way. QuotaPath automates sales compensation, including the commission tracking traditionally completed in spreadsheets.
- Commission tracking, payment, and approval for Finance
- Forecasting and pipe management for RevOps
- Commission visibility and goal setting for Sales
Why use Quotapth’s integration with HubSpot?
- Increased adoption of HubSpot
- Ability to see QuotaPath commission data directly in HubSpot
- Provides a single source of truth for attainment and earnings, in turn creating alignment, accuracy, and a better user experience
So, how does it work?
Two items must be in place before commission tracking can fully automate.
The first? Your compensation plans. Using QuotaPath’s plan wizard, admins can build out each plan in a few steps and map the various rules of the plans accordingly.
Then comes the sales process. Leaders should have a structured, documented, communicated, and adopted sales process in place that determines when a deal classifies as closed/won, and at what points the rep earns commissions.
Having these two tasks completed ahead of time will ensure a smooth, seamless, and beneficial operation!
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Compensation Plan Types
Many comp plans exist for sales reps, but four of the most common include the single rate commission plan, commission with accelerators, commission with bonuses, and commission with multiyear accelerators.
The organization’s go-to-market goals often determine which type of plan the rep earns commissions from.
For instance, if one of the company’s goals involves securing longer contracts, the comp plan usually reflects that by paying more on multi-year contracts. In this case, they’re likely implementing the commission with a multiyear accelerator plan.
Sales leaders’ compensation typically falls into the following three buckets. Team-based commission pays a single commission rate on every deal the team closes.
Team-based commission with accelerators pays a different commission rate on deals the team closes dependent on the teamwide quota attainment.
The third, team-based commission with bonuses, pays single-rate commissions on deals the team closes and a bonus when the team hits quota.
Sales Development Representative (Business Development Representative/Marketing Development Representative)
The three types of SDR comp plan examples we see include the activity-based plan for when a rep earns commissions based on the number of demos set, qualified opportunities created, etc. A revenue-based plan pays a commission on the opportunities the SDR created that an AE later closes. The third combines the former two, paying on both defined activities and revenue generated.
What’s the difference between commissions and bonuses?
Commission: a percentage of some other number (usually revenue) that you earn. Do you receive some percentage of every deal you bring in? If so, that’s a commission.
Bonus: a flat value you earn for doing something. Do you earn some set amount of money for hitting your quota, hitting revenue milestones, or for every meeting you set? If so, that’s a bonus.
Account Management and Customer Success
Account Management and Customer Success teams earn variable pay from usually three types of comp plans. Retention-based plans pay a commission on renewals. Retention and upsell bonuses pay bonuses when accounts renew and when upsold.
Lastly, the retention-based bonus pays a bonus on every account renewed.
When it comes to the sales process, data hygiene is paramount. At a minimum, all sales stages (amount, owners, closed/won) must remain correct and up-to-date. In addition, forecasting quota attainment and potential earnings provide reps instant visibility into the impact of their projected pipeline.
How to automate sales compensation in QuotaPath
Automating commission tracking in QuotaPath is a very straightforward process. However, you may find it helpful to familiarize yourself with some common QuotaPath terms. The “plan” is the name of the compensation plan (e.g. SDR Plan 2022). Meanwhile, commissions, bonuses, and accelerators define as the “paths” that make up the plan.
- Bonus: Paid upon reaching a milestone (attainment % or number)
- Commission: Paid % of closed won revenue
- Accelerator: After hitting a milestone (# or %), paid a higher dollar amount
Streamline commissions for your RevOps, Finance, and Sales teams
Design, track, and manage variable incentives with QuotaPath. Give your RevOps, finance, and sales teams transparency into sales compensation.Talk to Sales
The path to the future is QuotaPath
If you’re still tracking commission manually, step into the 2020s! A better way to run commissions exist and it saves time while ensuring accurate and on-time payouts. For a two-way commission tracking experience, sync HubSpot CRM and get on the right path, QuotaPath!
To learn more about RevPartners, visit revpartners.io.