Sales quota management refers to the process of setting, tracking, and achieving specific sales goals for certain periods of time. It is a critical part of sales management and can be used to motivate sales reps, boost and measure performance, and reward sellers who reach their goals.

The best sales quotas are realistic, backed by math, and aligned with company goals. 

And, the worst? 

Reps will say the worst kinds of quotas are restrictive, unrealistic, and therefore demoralizing. Most leaders will agree with the reps while also classifying bad quotas as those that they’ve set too low, which can lead to complacency. 

So, how can you find the right balance between a quota that pushes reps to achieve individual and company targets while ensuring that they’re actually attainable? 

The key is in your sales quota management strategy. 

Below we look at common terminology to set sales quotas, key components of effective sales quota management, and sales analytics to drive selling behaviors. 

Understanding sales quotas: definitions and purpose

First, let’s review the basics of sales quotas.

What are sales quotas? Sales quotas are quantitative goals set for sales reps or teams over a period of time, like monthly, quarterly, or annually.

They are typically expressed in terms of revenue, units sold, new customers acquired, or sales activities, such as the number of new opportunities. Quotas are an important part of sales management because they provide sales reps with clear goals to work towards that help the entire company reach its financial targets. 

Sales managers also use quotas to track their team’s performance and identify areas where they need to improve.

Quotas by role: Quotas typically differ by role. For instance, reps selling to enterprise clients will follow longer quotas with larger quotas. That’s because enterprise deals take longer to close and are usually much higher in value. 

Where an enterprise account executive might have one quota tied to annual recurring revenue, a sales development representative could have two or even three quotas. We’ve seen SDR sales compensation plans that have a quota based on number of demos booked, plus a quota tied to a revenue target.

Meanwhile, account managers usually have quotas tied to gross or net revenue retention — or both.

Quota attainment: A sales quota is the total number that the seller should aim to achieve while the attainment of quota is the percentage of progress toward that goal. This metric is especially useful for sales leaders to review to understand who is overperforming or underperforming on their team.

On-target earnings (OTE): To properly set quotas, you also need to have a solid understanding of on-target earnings, more commonly referred to as OTEs.

This number represents the total compensation a rep can expect to earn should they achieve 100% of their quota. It consists of the rep’s base salary and variable pay. The split between salary and variable pay is called paymix, which in SaaS is often 50:50. 

Additionally, in SaaS, your quotas should sit about 5x higher than your OTEs. However, this number fluctuates between 3x and 8x depending on your organization’s size. (Larger companies that pack a lot of resources and marketing spend behind each deal typically have larger OTE multipliers closer to 8 or 9x.)

How to set quotas

Before you can manage sales quotas, you first need to set them. 

That’s where that OTE multiplier comes in. You can set your quotas by using our recommendation above or finding a healthy quota:OTE ratio using our free calculator. 

You can also work from the top down by taking your company-wide new business goal for the year and dividing it by the number of reps on your team. Then, divide by your quota frequency, which will depend on your sales cycle. 

For instance, a quarterly quota makes sense if your average sales cycle lasts about 90 days. If it’s less than that, shoot for a monthly one. Anything significantly longer than 90 days should be set for annually. 

Just remember to review it. Adjust quotas as you learn more about your business and as the market changes. 

Learn more about how to set sales quotas in this blog.

Importance of sales quota management

Now, let’s talk about the importance of sales quota management.

Sales quota management is the process of setting, tracking, and managing sales goals for individual sales reps or teams. It’s essential for any sales organization, especially for driving results and informing future compensation strategies.

One of sales quota management’s key benefits includes its impact on sales productivity. 

Providing sales reps with clear goals to work toward can help them stay focused and motivated. This also helps to increase rep accountability because they are held to a target that often impacts their earnings potential. 

Additionally, the performance (or lack thereof) of quotas can help forecast future revenue goals, which makes it easier for leadership to plan for future growth and make better decisions around resource allocation. 

Plus, when you align quotas with the company’s overall goals, you ensure reps focus on activities that drive the most important metrics of your business. 

Key components of effective sales quota management

But, to make sales quota management effective, several key components must be considered.

First, you have to commit to evaluating your quotas and possibly adjusting them throughout the year. 

How to evaluate sales quotas

Look for the following sales performance metrics to indicate bad quotas.

Automate quota tracking

Setting up automated quota attainment tracking will make evaluating quotas easier for you and more accurate. 

You can use a sales compensation system like QuotaPath to track commissions as well as attainment progress at the individual and team levels. This can help leadership prioritize where to spend their coaching time, especially if reps are just shy of achieving quota or if a rep is consistently underperforming. Plus, it’ll save your team time and the headache of manually tracking and calculating deals and earnings. 

Automating the process can:

• Improve tracking accuracy
• Provide insights into team performance
• Motivate your team
• Inform better decision-making around resources, sales team strategy and compensation.

Provide reps with visibility to quota progress

You can also use an automated tool to give your reps visibility into their progress.

Studies have shown that when you consistently check daily progress toward a goal, you’re more likely to reach it.

Think about weight loss. 

If you check your weight daily while on a new exercise program and see the small “gains” over time, you’re more likely to stick to the plan until you reach or surpass the target.

The same applies to quota attainment.

When you give your reps visualizations filled with real-time and forecasted progress, they can see how close they are to the goal or how the next deal pushes them over the finish line. This helps motivate them to hit their targets. It also helps hold them accountable by helping them think through, “Am I doing everything I can today to help me reach my goal tomorrow?” And, “If I get a deal in this week, then I only need one more to get me to my goal.” 

Leveraging data analytics for sales quota management

How else can data analytics impact your sales quota management, you ask?

In sales quota management, data analytics can track progress, identify trends, and make better decisions.

One way to ensure the data is updated and accurate is by syncing your customer relationship management (CRM) to whatever automated solution you use to track quota progress. QuotaPath, for instance, syncs with CRMs such as HubSpot, Salesforce, Copper, Pipedrive, and more so that deal data comes directly from the team’s direct source of truth. 

QuotaPath’s insights can help you measure how successful your compensation plan is at driving your reps toward achieving quota. 

This, in turn, drives efficiency across your process.  For example, if you pay a higher commission rate on multi-year contracts that includes quota retirement, you can see how many reps take advantage of that compensation lever. 

Use data analytics for sales quota management to: 

• Track progress: Track progress towards quota attainment. This can be done by tracking individual sales rep performance, team performance, or overall company performance.
• Identify trends: Identify trends in sales performance by tracking historical data and looking for patterns.
• Make better decisions: Data analytics can be used to make better decisions about sales and compensation strategy and resource allocation. 

Here are some additional tips for leveraging data analytics for sales quota management.

By following these tips, you can leverage data analytics to improve your sales quota management process.

To learn more about how QuotaPath can support sales quota management, connect with our team, or log in with a free 30-day trial to see for yourself. 

FAQs:

What are the benefits of automating sales quota management processes?

There are many benefits to automating sales quota management processes. Here are a few of the most important ones:

Increased accuracy: Automated quota management systems can help to ensure that quotas are accurate and up-to-date, which reduces the risk of inaccurate sales forecasts and missed targets.  

Improved efficiency: By automating quota management, you can free up sales managers and reps to focus on other tasks and increase productivity and efficiency as a result.

Improved visibility: Real-time visibility into quota progress helps sales leadership make adjustments, prioritize coaching, and create a culture of goal setting. 

Build sales strategy alignment: Having a source of truth for quota attainment progress helps to facilitate collaboration between sales managers and reps and build alignment as everyone works toward the same goals.

Sales team motivation: Giving reps a system to track their quota progress means they will always be up-to-date on how they’re trending toward their goal. This helps to build rep ownership of their performance while keeping them focused and motivated. 

If you are looking for ways to improve your sales quota management process, then automating it with a tool like QuotaPath is a great option. 

How can companies overcome challenges in sales quota management with SaaS solutions?

SaaS solutions such as QuotaPath can help companies overcome challenges in sales quota management by automating quota management and providing real-time visibility into progress. 

For instance, if you have a sales compensation plan that includes commission tiers based on quota attainment, you need to know when the rep crosses into the next tier to track and pay correctly. That, and how much more they earn upon doing so. A sales quota management system can provide visibility to the rep and leadership to show how close they are to unlocking higher earnings while also automatically tracking the calculations. 

Plus, as an organization scales and additional quotas follow, SaaS solutions can save time from manually calculating and tracking quota management. This makes adding or removing employees, implementing compensation plan changes, and providing transparency to each rep and stakeholder tied to the compensation and quota process easier. 

Overall, SaaS solutions can be a valuable tool for companies that are looking to improve their sales quota management process. By automating the process, providing real-time visibility, and being flexible and scalable, SaaS solutions can help companies to overcome the challenges of sales quota management and achieve their sales goals.

How does quota management increase sales productivity?

Quota management increases sales productivity by enabling teams to set clear goals with progress toward those goals widely visible. It also helps leaders and reps to manage performance, motivate sales reps, and improve sales efficiency.

In fact, we found that companies that use quota management systems are 25% more likely to meet their sales goals. Plus, a study conducted by Salesforce found that companies that use quota management tools are 10% more likely to increase their sales revenue.

QuotaPath’s Auto Commission Rate tool calculates and sets rates on the backend, so you don’t have to. No formula required.

While commission rates are simple to calculate with single-rate commissions, the same can’t be said for multiple rates. 

Variable pay splits, multipliers, and a growing sales team make rate calculations increasingly difficult. Plus, they often call for extensive formulas, which can confuse your reps when they try to understand their compensation plans. 

Today, we’re excited to share that QuotaPath will now calculate rates for you. We’ll show your reps exactly how they are calculated — without requiring math from your end. 

Called Auto Commission Rates, this feature lives in our Plan Builder tool. 

Now, when you add or modify compensation plans using our intuitive Plan Builder, you will start by filling out plan requirement questions, like if the plan contains a single rate or multiple rates and how long quota cycles are.

From there, you will add inputs such as attainment percentages, multipliers, and variable pay splits. These inputs trigger the calculation on the backend by QuotaPath, which removes the need to build complex formulas to calculate earnings. 

That’s it. 

The automatic commission rate feature at the rep level will support an expedited process around plan configuration, increase visibility, and minimize opportunities for errors. I’m excited that QuotaPath continues to enable our team at Muck Rack to execute with enhanced precision and transparency!

— Claire King, RevOps Associate Director at Muck Rack

We’ll do the rest to make the calculations viewable and digestible to your team to foster comp plan understanding and buy-in. 

Plus, our Plan Verification tool, which enables in-app distribution of compensation plans for rep signature collection, will now include this data to provide reps with a complete picture of their entire compensation plan. 

Get started with a free trial today, or learn more by scheduling time with our team.

About QuotaPath

QuotaPath partners with Finance, RevOps, and Sales teams to manage sales compensation more efficiently. With a library of free resources to inform compensation plan design and strategy and an automated commission tracking system, QuotaPath aligns teams, saves time, and increases earnings accuracy. 

Commission management includes the process of tracking, calculating, and paying commissions to sales reps. It is an essential part of any sales compensation plan with the ability to make a big impact on the motivation and performance of sales reps, as well as those who oversee compensation.

Take Executive Vice President of Revenue Operations Dennis Dube, for example. 

Dennis leads EverView’s 100+ person sales team. Today, they use QuotaPath to set up commission structures and automate commission tracking. 

But that wasn’t always the case.

Before implementing our help, Dennis and his team calculated commissions manually for 80 reps under one of 35 compensation plans.

“At the time, sellers didn’t know how much their paychecks would be until they received those checks,” Dennis said. 

What’s more, a survey revealed that his reps spent two hours per week trying to track and calculate their earnings in Excel. Plus, half of them didn’t understand their comp plans or how they earned commissions.

These survey results, and a text message on a Saturday that read “If you don’t approve a commission calculation within the next hour, then our sellers won’t get paid on time,” led Dennis to QuotaPath. 

“It was then that I knew it was time to get a better system in place,” Dennis said.

What’s more, after adopting QuotaPath, EverView had a record sales year. 

A well-designed commission management system can help to ensure that sales reps are motivated to sell, and that they are compensated on time for their efforts. 

Solutions like ours can also help to track the effectiveness of the sales compensation plan and showcase where adjustments are needed. But maybe even most importantly, it can remove the need for any panic-fueled texts on a weekend for those who oversee commission payments. 

Read on to learn more about commission management.

Commission Management: Understanding the Basics

First, we’ll start with the basics of commission management. 

You should begin your compensation strategy by setting clear goals and objectives that align with your organization’s key north star metrics.

As an example, if gross revenue retention (GRR) is your company’s biggest focus, your compensation strategy should support that across every role. 

In practice, this would look like account executives earning higher commission rates on multi-year contracts and higher bonuses for sales development reps who qualify leads that classify as your ideal customer profile. For account management, you could incentivize GRR by paying higher bonuses or commission rates on early renewals or those that convert from monthly to annually, or annually to multi-year. 

Some other best practices include: 

Free Sales Commission Calculator Template

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Commission Structures

There are several commission structures available to organizations, each designed to drive different behaviors and business outcomes. Here are the most commonly used models:

1. Flat Commission
   Also known as a single rate commission, this is a straightforward approach where reps earn a fixed percentage for every deal closed. It’s simple to administer and easy for reps to understand, but it lacks nuance when it comes to rewarding strategic behaviors or deal quality.
   
2. Tiered or Accelerated Commission
   In this model, reps earn higher rates once they reach certain quota thresholds (e.g., 10% up to 80% of quota, then 12% from 81–100%, and 15% above that). Tiered plans encourage overperformance and align well with growth-stage businesses looking to maximize top-line revenue.
   
3. Revenue-Based or Margin-Based Commission
   Revenue-based commissions incentivize closing large deals regardless of margin. On the flip side, margin-based structures reward reps based on profitability, ideal for businesses prioritizing efficient growth or operating in lower-margin industries.
   
4. Draw Against Commission
   Typically used during ramp periods, reps receive a guaranteed payment (draw), which is later reconciled against commissions earned. Non-recoverable draws offer stability during onboarding, while recoverable draws are treated like advances that must be paid back.
   
5. Milestone or Bounty-Based Bonuses
   Instead of percentages, reps receive fixed dollar bonuses for specific achievements, like bringing in a new logo or selling a strategic product. These are easy to track and can supplement other plans to reinforce key behaviors.

How to Choose the Right Commission Structure: A Step-by-Step Guide

Selecting a commission plan isn’t just a matter of preference; it requires thoughtful alignment with financial strategy, rep behavior, and business goals.

Here’s how to do it:

Step 1: Assess Your Sales Cycle and Revenue Goals

Start with your revenue targets and work backward. Are you focused on rapid ARR growth? Expanding within existing accounts? Boosting cash flow?

• For fast ARR growth: Consider accelerators or new logo bounties.
• For account expansion: Blend in upsell or multi-year contract incentives.
• For cash-focused metrics: Incentivize prepaid or upfront payments.

Step 2: Map Incentives to Deal Types and Roles

Differentiate between roles and motions. An AE closing enterprise deals should be comped differently than an SDR sourcing pipeline.

• AE plans may include multi-tier accelerators and margin bonuses.
• SDRs often benefit from a mix of bonuses for meetings booked and qualified pipeline generated.

Step 3: Balance Motivation and Profitability

While aggressive accelerators can drive revenue, they can also erode margin if not monitored. QuotaPath recommends ensuring total commissions paid on a deal don’t exceed 25% of deal value. Higher rates may indicate comp inefficiencies.

Use reporting tools to monitor your deal-level commission rate and uncover hidden comp costs across overlays (BDRs, SEs, managers).

Step 4: Prioritize Transparency and Rep Engagement

Plans should be easy to understand and track. Real-time visibility into pipeline-to-earnings forecasts empowers reps and reduces disputes. As Thomas Egbert, Head of Finance at Prefect, said:

“The whole point of having generous incentives is to energize the team and not have it be mysterious”.

Step 5: Test and Model Before You Roll Out

Use scenario modeling to simulate outcomes under different rep performance bands. Tools like QuotaPath help forecast commission impact across plans, so finance can see how comp decisions will affect CAC, gross margin, and attainment—before a single dollar is paid.

Streamline Sales Compensation to Drive Revenue Without Overspending

Incentive compensation can be both a growth lever and a financial liability.

For finance leaders, the challenge lies in maximizing the return on every commission dollar, ensuring reps are motivated and rewarded, without inflating the company’s cost of sales.

QuotaPath helps finance teams find this balance by giving them the tools to:

Lower the True Cost of Compensation

When plans are too complex or built in spreadsheets, inefficiencies snowball, leading to costly errors, delayed payments, and rep frustration. By automating plan logic, approvals, and payouts, QuotaPath enables you to reduce administrative burden and increase accuracy, all while staying GAAP-compliant and ASC 606-ready .

Align Payouts to the Metrics That Matter

Paying reps more doesn’t automatically generate better outcomes. Instead, tying earnings to high-margin products, multi-year contracts, or ideal customer profiles helps steer GTM teams toward outcomes that grow the business efficiently. Our platform makes it easy to layer in these levers without adding complexity. More on this below.

Visualize Real-Time Financial Impact

With centralized reporting and CRM-connected dashboards, finance can see commission accruals, deal-level payout rates, and quota attainment in real-time. This visibility means you can prevent runaway comp costs—and spot overpayment risks before they affect your P&L.

Iterate Faster With Scenario Modeling

When revenue slows or priorities shift, waiting until the next fiscal year to update comp plans isn’t an option. QuotaPath’s modeling tools allow finance teams to test new structures against historical data and project their impact before rolling anything out. No more flying blind.

By adopting a platform like QuotaPath, finance can confidently manage compensation as a strategic tool, not just an operational cost.

Key Metrics & KPIs to Track

When finance leaders evaluate the health of their compensation strategy, it’s no longer just about how much is being paid out; it’s about why, to whom, and what outcomes those dollars are driving. The right metrics give you the visibility to manage sales compensation like a business investment, not just an expense line.

Here are the three key KPIs every CFO should monitor regularly:

1. Commission Cost of Sales (CCoS)

CCoS is one of the most critical metrics in your compensation program. It indicates the percentage of revenue allocated directly to commissions. According to QuotaPath data, when CCoS exceeds 30% on a per-deal basis, you’re likely overspending.

Tracking CCoS across reps, deal types, and territories helps pinpoint inefficiencies. It also supports strategic decisions around margin protection, comp plan design, and headcount planning. For finance leaders, this is the north star KPI that ties comp directly to gross profit.

Pro tip: Use QuotaPath’s deal-level commission reporting to uncover where blended comp rates are quietly eating into margin.

2. Forecasted vs. Actual Payouts

Missed commission forecasts can throw off everything from cash flow to payroll operations. With tools like QuotaPath, finance leaders can compare real-time earnings forecasts (driven by CRM pipeline data) against actual payouts to spot gaps, anomalies, or sandbagging behaviors.

This visibility helps ensure accruals are accurate, budgets stay intact, and that comp plan expectations are being met in real financial terms.

3. Quota Attainment & Accuracy Rates

A healthy comp plan should drive consistent quota attainment, without making it too easy or impossibly out of reach. Tracking attainment distribution across the team highlights if your targets are realistic, and whether accelerators or tiered payouts are doing their job.

QuotaPath’s data shows that only 9% of companies currently have 80%+ of their team hitting quota, despite that being the ideal benchmark for sustainable growth. Monitoring this alongside plan “accuracy” (how closely payouts match expected earnings) ensures you’re balancing motivation with predictability.

Common Challenges

Common challenges when it comes to sales commission management include overly complex plans, manual processes, and a lack of compensation visibility across the team. Below, we delve into each one. 

First up is the complexity of commission plans. 

Out of a survey we conducted with 400+ RevOps, Finance, and Sales executives, 30% ranked “maintaining simplicity” as the biggest challenge during the sales compensation plan design process.

That’s because leadership tends to complicate commission plans as companies scale, which leads to errors and disputes. This often leads to misalignment of sales activities, distrust from reps on how they’re paid, and illogical comp plans that double dip on pay or motivate incorrect selling behaviors. An example of this might occur when a company pays a higher commission rate on a product they plan to sunset versus a new product.  

Manual processes also pose challenges. According to data from last year, 60% of businesses still rely on spreadsheets to manage commissions, which can be time-consuming and error-prone. When errors happen, reps are more likely to quit. In fact, we found that 66% of companies reported losing between 1-9%of their salesforce to commission errors every 1-2 years. 

Lack of visibility marks another challenge and one that Dennis’s team experienced first-hand. Sales reps often don’t have visibility into their commissions and how they’re calculated. When they don’t understand how they’re rewarded for performance, how can leaders expect them to perform? 

Another issue that’s popped up over the last decade is compliance. ASC 606 revenue recognition compliance introduced new accounting standards that called for businesses to account for commissions in new ways. This has led to confusion that the use of spreadsheets for manual tracking and amortization scheduling has contributed to. 

Fortunately, all of these challenges can be mitigated with the help of trusted sales and commission tracking software.

Sales Compensation Calculator

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Effective Commission Management Implementation

You’re probably thinking, “Okay, but can automated commission management really address all these challenges?” 

Yes, if implemented correctly.

An effective commission management implementation will typically include the following: 

• Compensation plans that are simple, logical and fair
• Reps have visibility into commission calculations and when to expect payouts
• Sales compensation stakeholders have access and custom views based on roles and responsibilities
• Individual tasks in the commission management system are surfaced with quick access to complete
• Full onboarding delivered in a timely manner
• Friendly user interfaces appropriate for various roles in commission processes
• Insights into sales compensation strategy effectiveness
• In-app collaboration to resolve disputes, address questions, and more
• Ability to save, duplicate, and edit compensation structures to quickly add or remove new teams, sellers, or comp plans
• Forecasting features that enable leadership and sellers to see real-time attainment and earnings progress and future forecasts based on pipeline

Most importantly is leadership’s compensation communication plan of your organization’s  strategy and any changes throughout the year. This will help to build trust and understanding between your team and your sellers.

To see if QuotaPath will work for your organization, chat with our team today. 

Fairness and Transparency in Commission Management

In addition to a successful implementation, your company should base your commission management philosophy off two key principles: fairness and transparency.

What is fairness in commission management? Fairness in commission management means that all sales reps are treated equally and that their commissions are based on their performance. This means that the commission plan should be clear, concise, and easy to understand. It should also be aligned with the company’s overall goals and objectives.

What about transparency?

Transparency in commission management means that sales reps know how their commissions are calculated. This means that they have visibility into the factors that affect their commissions, such as the sales goals, the commission rates, and the calculation methodology.

Both of these pillars are vital to your selling team. 

First, they help motivate and retain sales reps. When sales reps know that they are being treated fairly and that their commissions are transparent, they are more likely to be motivated to sell and stay with the company.

Second, fairness and transparency help to build trust between sales reps and the company. When sales reps trust that the company is treating them fairly, they are more likely to be open and honest with the company. This can lead to better communication and collaboration, which can ultimately benefit the company.

Third, fairness and transparency help to avoid disputes. When sales reps understand how their commissions are calculated, they are less likely to dispute their commissions. This can save the company time and money in the long run.

How to Ensure Your Fair and Transparent

To ensure fairness and transparency throughout your commission management process, create a clear and concise commission plan. Make sure your reps understand how their commissions are calculated and show the math behind your comp plan. 

You should also provide your sellers with visibility into commissions so that they can check to see what they’re getting paid on and peer into the calculations behind each deal to clear up questions on upcoming commissions checks.

Pro-tip: recruit the help of QuotaPath to do so. 

Lastly, include a session on your commission management system as part of your new hire onboarding for employees across RevOps, Finance, and Sales. This will help ensure that they know how commissions are being calculated and tracked, and, of course, how to use it.

See how this Business and Data Operations Manager added an onboarding session to cover their compensation policy and processes using QuotaPath. 

What is a Sales Commission Management System?

A sales commission management system is a software solution designed to automate and streamline the tracking, calculation, and payment of sales commissions. It integrates with CRM and payroll systems to ensure accurate and transparent commission payouts based on predefined compensation plans. By reducing manual errors and providing real-time visibility into earnings, it helps sales teams stay motivated while enabling finance and RevOps teams to manage compensation efficiently​​.

How Does a Sales Commission Management System Work?

A sales commission management system works by integrating with a company’s CRM, payroll, and accounting systems to automatically track sales performance and calculate commissions based on predefined compensation plans. It collects deal data, applies commission rules (such as flat rates, tiered structures, or accelerators), and provides real-time visibility into earnings for sales reps and finance teams. Once approved, the system processes payouts, ensuring accuracy, compliance, and alignment with business goals while reducing manual errors and administrative workload

Key features and benefits of commission management systems

So, what are the main benefits of commission management solutions? We’ve mentioned several throughout the article, but here are the key value adds:

Challenges of Manually Managing Commissions

Actually managing commissions presents several challenges, including:

1. Errors and Inaccuracies – Spreadsheets and manual calculations often lead to miscalculations, overpayments, or underpayments​.
2. Time-Consuming Process – Admins and finance teams spend hours reconciling data, verifying calculations, and approving payouts​.
3. Lack of Transparency – Sales reps often struggle to track their earnings, leading to confusion and potential disputes​.
4. Delayed Payouts – Approvals and manual data entry slow down the commission process, impacting rep morale​.
5. Difficulty in Scaling – As teams grow, managing commissions manually becomes increasingly complex and inefficient​.
6. Data Silos – Disconnected systems (CRM, payroll, finance) create inconsistencies and additional reconciliation work​.
7. Limited Auditability – Without automated records, tracking past payouts, approvals, and plan changes is cumbersome​.
8. Compliance Risks – Errors in commission calculations can lead to tax compliance issues or financial reporting inaccuracies​.
9. Inability to Model & Forecast – Manually managing commissions makes it difficult to analyze trends, forecast costs, or optimize comp plans​.
10. Low Sales Motivation – Unclear or incorrect commission payments can frustrate sales reps and reduce motivation​.

Switching to an automated sales commission management system helps overcome these challenges by improving accuracy, efficiency, and transparency.

Future Trends in Commission Management

Finally, what can you expect over the next few years from commission management tools? We’re already seeing an uptick in AI (think: ChatGPT) language processing to support comp plan design. 

In fact, we’ve introduced our own AI tool for building and translating compensation plans within QuotaPath.

Another trend we’re noticing is with mutli-year accelerators for account executives and account managers.

Multi-year deals tend to be better for the company. With current economic conditions, predictable revenue growth is more important toward profitability.

— Andrew de Geofroy, SVP, of Global Revenue Platform for Quantive

Executed in an AE comp plan, this might look like a standard commission rate of 10% on 1-year deals, with accelerated rates of 12% on 2-year contracts, and 15% on 3-year congrats. On the renewal side, you might see an AM earn 8% on a multi-year deal (or grab a flat bonus for converting an annual customer to a multi-year), versus 4-5% on a 1-year renewal. 

Our third trend relates to SPIFs. 

SPIFs have always been popular in sales to quickly motivate or change a specific selling behavior. More frequently, however, we’ve encouraged (and noticed) companies leveraging SPIFs to test potential changes to upcoming compensation plans.

So, want to see if a 2% increase in a commission rate will impact the number of multi-year contracts? Test it out for a quarter with a SPIF first before adding it into your plan. Maybe you’ll find you need to increase the rate in order for your reps to ask for longer terms. 

In conclusion, the biggest thing to remember regarding the future of commission management is that technology is on your side. 

Make your process more efficient for you and your team  with QuotaPath. 

To learn more, schedule time with our team or start a free trial. 

FAQs:

How does a commission management solution help streamline sales compensation processes?

A commission management solution can help streamline sales compensation processes in a number of ways, including:

• Sales performance management: Companies with sales incentive programs can use commission management solutions for sales performance management. Using attainment leaderboards and forecasted earnings from pipeline, leadership can get a quick pulse on real-time team performance and what’s to come.
  
• Automating commission calculations: A commission tracking solution can automate commission calculation, which can save time and prevent errors when it comes to commission payout.
  
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• Tracking sales activity: By integrating with a CRM, a commission management solution can track sales activity automatically to ensure that commissions are calculated correctly and that sales reps are compensated fairly.
  
• Providing visibility into commissions and incentive compensation: A commission management solution can provide visibility into commissions, commission reconciliation, as well as your sales compensation planning process. This can all help to bolster sales force motivation, rep accountability to track their progress, and fair commission allocation to ensure compensation plans are equitable and fair.
  
• Managing compliance: A commission management solution can help to manage compliance with tax laws and other regulations.
  
  Read: What does ASC 606 revenue recognition mean for commissions?
  
• Reporting and analytics: A commission management solution can provide reporting and analytics, which can help to track the effectiveness of the sales compensation plan and to make adjustments as needed.

How do commission management software handle complex commission calculations?

Compensation technology can handle complex commission calculations by using a variety of methods, including:

• Rules-based calculations: Rules-based calculations are based on a set of rules that are defined by the company. These rules can be used to calculate commissions based on a variety of factors, such as the type of product or service sold, the amount of revenue generated, and the number of deals closed.
• Formula-based calculations: Formula-based calculations use mathematical formulas to calculate commissions. These formulas can be used to calculate commissions based on a variety of factors, such as the sales price of a product or service, the cost of goods sold, and the profit margin.
• Algorithmic calculations: Algorithmic calculations use algorithms to calculate commissions. These algorithms can be used to calculate commissions based on a variety of factors, such as the customer’s lifetime value, the number of leads generated, and the number of sales opportunities created.

The specific method that is used to calculate commissions will depend on the complexity of the commission plan and the needs of the company. However, commission management software can typically handle even the most complex calculations with ease while providing transparent commission tracking.

How can businesses choose the right commission management solution?

When choosing the right commission management solution, you should consider:

• The complexity of your sales commission structure
• Guidance and expertise in compensation plan design
• Size of sales team/user limits
• Budget and pricing transparency
• Ease of use
• Flexibility
• Scalability
• Sales performance analytics and visualization
• Support
• ASC-606 Compliant
• Time to value
• Integration to tech stack

You can try QuotaPath’s commission automation for free by signing up for a free trial (no credit card required).

Customer referrals are your most valuable asset when it comes to conversions and renewals.

Did you know, for instance, that customers referred by other customers have a 37% higher retention rate?

They also spend 200% more than non-referrals and convert at a rate 3 to 5 times higher than any other marketing channel (Annex Cloud). 

But it’s not only the high conversions. 

For many buyers, purchasing processes kick off by asking for peer recommendations from a trusted B2B referral program.

“I start by getting recommendations from people I know who have used a few of the tools we’re looking at,” said QuotaPath RevOps Manager Brandon Smith. 

Then, once Brandon receives the green light from his network, he’ll reach out directly to learn more.

On the other side, you have SaaS businesses on the prowl — and in some cases, desperate — for customers they’re in good standings with who can share their positive experiences. What does this process look like at your company?

For early-stage businesses, it’s often a communication chain: Rep is on a call with a prospect who requests a referral. Rep then reaches out to CSM or AM and asks for names of contacts. AM or CSM, when they finally have time, then confirm a contact they can reach out to. 

Surely there’s a better, more efficient way, right? 

Below, we share a few best practices to grow your customer reference processes. 

Community referrals

Professional communities are a great place to grow and amplify your customer referral program. 

We, for example, are active in RevOps Co-Op, Pavilion, Women in Sales, and RevOps Alliance. These virtual spaces give us the opportunity to share helpful content and resources and answer questions that relate to our area of expertise: sales compensation.

They also provide the chance for our happy customers to suggest QuotaPath when someone asks for commission tracking recommendations. 

To ensure QuotaPath comes up, our community lead collaborates with our account management team to create a shareable document with every active customer across these professional communities who reported high NPS scores.

That way, when someone asks for referrals, the community lead can send a quick Slack message to those customers and direct them to comment if they feel comfortable. This also allows you to track who you’ve asked to respond so that you can get a healthy mix of referrals.

Additionally, your team can reference this document when you need referrals in other scenarios.  We recommend updating it quarterly to account for new referral contacts, point of contact exits, and churn or poor experiences. 

CRM checkbox

Another way to streamline your referral process is to use your CRM to notate accounts and contacts willing to be referrals. This is also a great way to build out contact lists when you need a wave of positive reviews across sites like G2, Capterra, and TrustRadius. 

You can do this by asking your RevOps or SalesOps teams to build a field that enables your team to put a checkbox on the account record for easy updating and reporting. 

Sales enablement should follow to:
1. Encourage your reps to ask customers if they’d be willing to be referrals
2. Build this step into the reps’ daily CRM hygiene processes

RevOps, this will likely fall to you to update every quarter or midway through the year to ensure references aren’t over-contacted and to keep the list timely. 

Ask for a reference on your customer satisfaction survey

If you want to put in place another avenue to add customers to your referral list, you can plant a question in your customer satisfaction survey.

Some sample copy to consider: 

“Would you be willing to provide your contact information so that we can follow up with you about becoming a referral?”

“How likely are you to recommend our company to a friend or colleague?”

And, if they say “no” to those, you could follow up with this: 

“What could we do to make you more likely to refer our company to a friend or colleague?” This question gives you specific feedback on how you can improve your customer experience and make customers more likely to refer your company to others.

Follow up with customers after they offer a reference

Lastly, remember to follow up with customers after they give a reference. 

This can fall to marketing, the reps, or a member of your leadership team. 

Following up will show that you appreciate their time and that you are serious about using their reference. Send a “thank you” note, swag, or even an update on how you used their referral. The better the experience, the more often your contact will be to act as a continued reference. 

About QuotaPath

QuotaPath partners with RevOps, Finance, and Sales teams to manage sales compensation more efficiently — and more effectively. With a library of free resources and an automated commission tracking system that aligns teams, saves time, and increases earnings accuracies, QuotaPath is the only sales compensation management software with a free trial. Sign up today. 

The following blog explores the sales jobs with the highest commissions.

One in eight jobs in the U.S. (nearly 13%) are full-time sales positions, but only 39% of salespeople plan to go into sales.

Despite what appears to be a reluctance to enter sales, a sales career has its benefits. For instance, salespeople develop many skills they can use in other facets of their life like communication, trust-building, analytical thinking, and problem solving.

These skills easily transfer to other career paths, so accepting a sales role, even temporarily, provides growth opportunities.

Plus, a career in sales is never boring thanks to the ever-changing marketplace. 

Sales offers plenty of flexibility and solid promotional paths. It’s a field that is both challenging and rewarding with high earnings potential.  

Most positions pay a base salary plus commission, often giving reps unlimited earning potential — one of the most enticing aspects of sales.

But not all sales roles are created equal in terms of income potential. High-commission sales jobs typically result in higher total earnings.

If that’s what you’re after, we’ve got you covered with this list of 10 sales jobs with the highest commissions. 

Read on to plan your next sales career move.

Highest commission sales jobs

1. Enterprise Sales/Account Executive

Our first of the sales jobs with the highest commission is the enterprise sales rep. Enterprise sales executives typically work in a business-to-business (B2B) environment and are responsible for managing and expanding their company’s largest customers. 

Since deals with enterprise clients tend to have a higher dollar value, the income potential is much greater for these sales roles. But this earning potential comes at a price: more responsibility and stress from dealing with the business’s biggest and most important clients.

Most candidates for enterprise sales executive roles must work their way up through the ranks to qualify, but someone with an MBA can occasionally get their foot in the door at this level.

— Source

2. Medical Device Sales Representative

A medical device sales rep sells medical equipment to medical professionals like surgeons and physicians. These sales professionals often demonstrate their medical products in doctors’ offices and hospitals. Some reps are even present in the operating room during medical procedures to confirm surgeons are using their devices correctly.

Although medical sales reps aren’t required to have a medical background, they usually need to have a bachelor’s degree, a thorough understanding of the potential impact of their medical device, and the ability to comfortably watch medical procedures.

— Source

3. Printing Sales Representative

A printing sales rep sells printing services and printed materials to businesses within a designated territory. This role involves creating relationships with current and potential customers, writing contracts, bidding on large commercial print jobs, and servicing existing clients. Additional responsibilities of printing reps include maintaining existing active accounts, following up with customers to confirm their level of satisfaction, or assisting with reorders. These reps also create presentations and proposals for business and keep abreast of their company’s new product and service offerings.

Printing sales reps don’t necessarily need any special educational requirements, but those with prior printing industry knowledge or experience are most likely to land the highest commission sales jobs.

— Source

4. Pharmaceutical Sales Representative

Pharmaceutical sales reps visit doctors’ offices, hospitals, and medical facilities in their designated territory. Their goal is to develop relationships with doctors and educate them about the proper use and benefits of the drug and manufacturer they represent with the intent of driving more prescriptions.

Pharmaceutical sales roles are highly sought after. A bachelor’s degree from a leading university plus a high GPA is typically required to break into the industry.

— Source

5. Solar Sales Representative

A solar sales rep sells solar energy systems to residential and commercial customers. Responsibilities include determining if each location is a good fit for solar, creating cost and saving estimates, and responding to customer questions. In this role, reps may also need to develop strategic plans for sales territories, demo equipment, and keep up to date with product changes. Plus, some solar salespeople are required to prospect for leads while others are tasked with calling on warm inbound leads. It’s worth noting that this position typically pays solar sales commission with no base salary.

— Source

6. Territory Account Manager

A territory account manager estimates the potential of increasing sales goals or closing deals in a geographic territory. This role also manages a sales team. Other duties include developing sales plans, monitoring costs, improving customer service, gathering data, and reporting results.

This role requires strong management and communication skills. A bachelor’s degree in business or marketing and proven field sales experience are common requirements of a territory account management position.

— Source

7. Realtor

Realtors are consistently on the sales jobs with highest commissions lists. A realtor sells commercial or residential real estate. They represent buyers, sellers, or both. They help people buy or sell a property and earn a percentage of the sales price as a commission. A selling agent is responsible for things like listing and marketing the property, hosting open houses, and completing closing paperwork. Buyer’s agents help clients find properties, craft offers, and assist people throughout the property buying process until the sale is complete.

The main requirement to be a realtor is completing training and passing a licensing exam in the state where they sell properties.

— Source

8. Sales Engineer

The sales engineer role combines sales, engineering, science, and technology. Companies that sell equipment, mechanical systems, or software products involving complex technologies often employ sales engineers. Sales engineers are typically responsible for assessing the client’s current equipment, mechanical systems, or software stack, understanding the customer’s needs, challenges, and goals, and creating a customized solution.

To qualify for a sales engineer’s role, an engineering bachelor’s degree or higher, or comparable experience, is typically required, due to the technical nature of this position.

— Source

9. Advertising Agent

An advertising sales agent works with potential clients to earn their firm’s advertising business. They typically initiate contact with the prospect to explain the various advertising services offered by their company. After conducting a thorough discovery call, they provide potential customers with quotes, handle paperwork, and make sales presentations to potential and existing clients. This role requires you to establish a good professional working relationship with clients. This facilitates identifying pain points and recommending advertising services that best meet their needs.

— Source

10. SaaS Enterprise Account Executive

A software-as-a-service (SaaS) enterprise account executive is responsible for generating new business within a portfolio of large enterprise accounts. They engage with C-Suite executives within prospect companies that meet their ideal customer profile and are most likely to need their solution. The sales cycle for these deals tends to be 6-12 months long and requires advanced strategic selling skills across a large buying committee. This role is quite demanding and extremely rewarding. That’s why these are some of the highest commission sales jobs available.

Our research revealed that the highest commission sales jobs in this category were Workday and PayCom. And those with the highest total compensation were Snowflake, Workday, and SumoLogic.

Although these aren’t entry-level sales jobs, they are ones to strive for as you advance your career.

— Source

Highest commission sales jobs, roles, and industries

As you can see, there are many different sales jobs with high commissions. The highest paying roles are enterprise account executives in both SaaS and non-software industries, followed by print sales reps. And the highest commission sales jobs from our list are SaaS enterprise account executives followed by solar sales reps. 

Automate sales compensation management and commission tracking with a 30-day free trial of QuotaPath or see it live in a guided demo with our team. 

Out of the 10 common commission structures we see, the commission-only sales job is one of the most polarizing. (Although, don’t get us started on compensation plans featuring cliffs or floors.)

Those who have excelled in a compensation model that only pays sales reps commissions based on the deals they win will tell you how lucrative it can be.

But with no base salary, the success of commission-only sales jobs depends entirely on pipeline strength. A spotty pipeline will equate to spotty success. And with no base to lean upon, reps can find themselves in precarious financial situations. 

I experienced this first-hand in a retail environment selling cell phones as a commission-only sales rep in my early 20s.

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At the time (the business has now switched to include hourly pay), reps earned between $40-$250 per device based on make and model and contract terms, shared across the floor with other reps. Some days, I’d make close to $1,000 a shift. But on other shifts, I might walk out with $20. 

Eventually, I gamed the system a bit to build a schedule at the busiest of stores with the best shifts that I’d try to fill with appointments of my own client base. However, if other reps passed me in the rankings, they had dibs on the shifts and stores. 

I found the eps and flows of predictable income challenging after a year and a half and pursued and moved into a salaried-plus commission leadership role.

Now, in my late 30s and with two kids, I can say with certainty that I would not take on a commission-only sales job again.

After running a LinkedIn poll, it seems most people agree. 

I wouldn’t do it again because I need to plan for a predictable income with my children. That, and I’m also admittedly not great at sales.

But for those who excel in this field or those who want to learn sales fast, some would say there’s no better way to get good at sales than to make your income entirely dependent on it. 

Below, we examine the pros and cons of commission-only sales jobs, what to look for when hiring sales reps on commission-only, plus commission-only comp plans.

Benefits of sales jobs commission only

First and foremost: no commission caps. 

Since the company eliminates the financial risk of paying for underperforming reps, very rarely do 100% commission roles come with caps. So, the sky is the limit for the rep. Pair that with high commission rates, and the earnings potential is very high. 

Secondly, as mentioned above, 100% commission roles require reps to learn the job fast.

“This type of comp plan works really well if you can stomach some of the risks because you might suck at it for a quarter or two,” said Asher Mathew, Demandbase VP of Go-to-Market Data & Sales Intelligence Cloud. “But it’s the fastest way to learn sales, customer success, and marketing while building your understanding of how to cultivate champions and get a budget allocated to the business initiatives your product supports.”

These roles also typically yield more independence and flexibility to build your own schedule.  

Challenges of commission-only sales jobs

Now for the challenges.

My biggest issue in a commission-only job was the volatility of paychecks. I’d have two consecutive quarters absolutely crushing it followed by a month of poor performance. This can cause stress.

Another challenge is high turnover. Since you’re either making money, or you’re not, the revolving door of reps leaving seems to never end. 

Plus, banks often flag 100% commission jobs as “high-risk” on house loans or refinancing applications.

Lastly, you are completely in the driver’s seat of your income. If you are not willing to put in the effort to build your pipeline, establish relationships, and close deals, then you will not be successful. This type of role works best for self-motivators who don’t cut corners. 

Hiring sales reps on commission only

In general, we see commission-only sales jobs more commonly in industries where the sale of a product or service is highly variable, like real estate or pharmaceutical sales. For example, the sale of a house or a piece of property can vary greatly depending on the location, the condition of the property, and the market conditions. 

In these industries, it is often difficult to predict how much a salesperson will earn in commissions. That’s why so many companies pay a commission-only model.

Plus, “Managing 100% commission-only reps is a beast because the people who will be successful in that sales role are lunatics. You may find a great salesperson, but most salespeople will be a drain on your resources,” said Ali Mirza, CEO & Founder of Rose Garden

However, if you’re looking to hire a salesperson for a commission-only role, here are some of the skills and qualities that successful commission-only reps share in common

• Proactiveness: You’ll need someone always looking for new opportunities to generate leads and close deals. They are not afraid to pick up the phone and cold-call potential customers.
• Persistence: They don’t give up easily. They keep calling on potential customers until they get a yes.
• Communication skills: Reps need to be able to clearly and concisely explain the benefits of their product or service to potential customers. They also need to be able to build rapport with potential customers and answer their questions.
• Negotiation skills: Salespeople who are successful in commission-only roles need to have good negotiation skills. They need to be able to negotiate the terms of a sale and close the deal.
• Self-motivation: Probably the most important quality is self-motivation. They need to be able to set their own goals and work independently to achieve them. They also need to be able to handle rejection and stay motivated even when they don’t make a sale.
• Problem-solving skills: Elite problem-solving skills are imperative. Reps need to be able to identify and solve problems that potential customers may have.
• Knowledge of the product or service: They should have a deep understanding of the product or service they sell.

In addition to these skills and qualities, successful commission-only salespeople are also typically driven, competitive, and have a strong work ethic. 

Plus, they manage their time effectively, set realistic goals, and accept the financial risk of commission-only sales jobs. 

Commission-only compensation plans

Next, we’ll get into commission-only comp plans, which are generally the easiest to build.

“Due to the simplicity of a commission-only compensation plan, you forgo a lot of risks — when your salespeople succeed, revenue increases; when they fail, you lose nothing,” wrote HubSpot.

When you create 100% commission comp plans, you’ll follow similar steps to your standard comp plan building process with a couple of key differences.

First, if your organization chooses to not offer a base salary, you will want to increase your commission rate substantially.

For instance, the standard commission rate in SaaS is 10%. But SaaS companies most frequently create on-target earnings that consist of a base salary and variable pay, with a 50/50 pay mix. 

More SaaS Compensation Trends Data

“The commission rate should be up to 2x that of normal rates,” said QuotaPath Chief of Staff Graham Collins, who has conducted over 500 comp plan consultations.  

With that in mind, think 18%-20% on sales. 

Secondly, you should avoid decelerators and commission floors. These measures require the rep to achieve a certain amount of sales or revenue before becoming eligible for commissions. 

How to build a commission-only comp plan

Step 1: Determine on-target earnings and quota. For most sales roles this will consist of variable pay and a salary. In this case, you will set a target total commissions number and pair that with a quota that is 5x-8x that number. 

You could also work top-down by starting with the company-wide annual recurring revenue goal.  Then, divide that by the number of salespeople, then again by the average contract value. Divive it a third time by the quarter or months depending on your quota frequency.

Step 2: Set your commission rate. This might fall anywhere between 5% to 45%, according to HubSpot. Keep in mind, the more responsibilities your reps have throughout the customer journey, then the higher the commission rate. 

Step 3: Decide when you’ll pay commissions. At the start of service? At the time of contract? For commission-only roles, 

Step 4: Define your clawback clauses. If commission-only reps hustle deals in only for them to dissolve shortly after, one way to deter this from happening is to build clawbacks into your commission policy. 

Step 5: Factor in onboarding and ramp times of new hires and set up a draw program. This will help offset the delay in commissions as they grow more confident in your sales process. 

Step 6: Create a compensation policy that outlines the process and get rep signature to show understanding. 

Commission-only compensation plan example

To help you build a commission-only comp plan, we’ve sourced two examples.

The first comes from Asher, who used our free Compensation Hub resource to build out a template according to his business metrics. 

His example includes a base rate of 25% and an accelerated rate of 37.%5 that kicks in once the rep archives 100% to quota. 

Other variables include:

• OTE: $150,000
• Annual quota: $600,000
• Average contract value: $20,000
• Deals per pay periods: 7.5

You can use a template of his plan to plug in your own business variables. 

HubSpot also put together the following plan: 

Broken down, that’s a quota of $500,000 for the year with a 20% commission rate applied to every deal, for an OTE of $100,000 take-home for the rep.

That means the rep would aim for $125,000 in revenue per quarter or $41,666 per month. 

Conclusion: Sales job commission only, you in?

So, what do you think now? Will you join the 6% of sales reps per our survey willing to accept a sales role? Employers, will you exchange less financial risk for less profit per deal? 

If “no” to the latter, you can explore other commission structures that make the most sense for your business.

For additional support in building sales compensation plans, check out our free library of adjustable sales comp plan templates. Once you develop a plan that’s simple, logical, and fair, sign-up for a free 30-day trial in QuotaPath to automate sales compensation management and prepare commission payments. 

You can also skip the trial and connect with our sales team. Learn how QuotaPath can run your commission processes more efficiently while motivating and building accountability across your team by scheduling a demo. 

QuotaPath is pleased to introduce our new brand, website, and refreshed product experience. 

This new brand is the culmination of many interviews with customers, prospects, partners, and team members, and represents our company’s growth and vision for the future. 

When QuotaPath first launched in 2018, individual sales reps leaned on our platform to track commissions accurately and forecast their potential earnings.

“Our initial goal was simple: Make sales compensation easy to understand for reps,” said QuotaPath Co-Founder and CEO AJ Bruno. “However, in partnering with our customers over time, it became clear that our focus on reps needed to expand to everyone impacted by sales compensation, including those responsible for plan design, commission calculations, and payouts.” 

As such, we introduced new tools, dashboards, and features to better support leaders from Revenue Operations, Finance, and Sales throughout the entire sales compensation process. These included custom compensation plan templates, self-serve integrations to CRMs and invoice systems, holistic views of the most valuable compensation data for reps and comp managers, and in-app collaborative tools to streamline the management process and save time. 

Our new brand reflects our product’s maturity, and our vision for the future: to rally revenue teams around shared goals through an effective variable compensation process.

“QuotaPath’s brand refresh, under the leadership of our CMO Sara Strope and Director of Brand Melanie Taube, reflects a much clearer point-of-view in empowering RevOps, Finance, Sales leaders and reps to be intentional and accountable for their team’s compensation needs,” said AJ. 

QuotaPath: Smart commission management

In previous years, QuotaPath was known as the sales commission tool “built by sales teams for sales teams.” We highlighted the fun, celebratory feelings reps hope to feel on payday. 

But paydays can also lead to frustration when expectations aren’t met.  

From the rep who celebrates a bump in commissions after surpassing quota, to the RevOps director quadruple-checking commission calculations just hours before payroll is due, and the accountant tasked with issuing a clawback, money is emotional. 

Our new brand reinforces our dedication to all the stakeholders impacted by commision management and acknowledges the importance and complexity of emotions felt about compensation. This new brand also spotlights our sales compensation expertise. 

Our core attributes

Four core attributes will guide every expression of our new brand.

Smart
QuotaPath is a smart solution to a complex problem.

Confident
We’re confident in that because we craft thoughtful experiences and content driven by data.

Mindful
We’ll listen, understand, and empathize.

Approachable
We’re your collaborative partner by offering candid and genuine help while doing our best to avoid jargon. 

New brand elements

Color palette

Our color palette balances familiarity with freshness. The deep green is an homage to money and spreadsheets. We recognize spreadsheets are a powerful, comfortable tool for revenue operations and finance teams, and you can upload and export spreadsheets from QuotaPath. Our bright lime green and lemon yellow show confidence, and modernity. The orange and blue used as secondary colors reflect our close connection to HubSpot.

Type

Simula (by Justin Sloane at Sharp Type) is a serious yet personable serif. Our new design system relies heavily on type as we frequently share insights, data, and guidance.

Illustration

Our new illustration style was inspired by scientific drawings, reflecting the principles of instruction and innovation.

Photography

Our photography captures authentic human emotion and reflects the collaboration between individuals. 

Product

We applied our new brand elements to our product, and the result is astounding. The new color palette and iconography bring clarity to essential compensation views. Key tasks and charts shine thanks to the lighter backgrounds and updated iconography. Go ahead, start a trial and take a look.

Have a look

Check out our new website. Sign up for a trial and experience our product.  Follow us on LinkedIn.

Or meet us in person!  We’ll be at HubSpot’s INBOUND and at SaaStr the first week of September. 

About QuotaPath

Sales compensation should rally your revenue team.

We see teams overcomplicate sales compensation pretty regularly. Balancing your core financial targets with the interest of your sales team is tricky. 

Our founders created QuotaPath in 2018 to partner with you on your compensation strategy and remove complexities that slow your revenue team down.

Through our sales compensation management solution and comp plan design expertise, we rally GTM teams through purpose-driven comp plans, commission visibility, and streamlined workflows.

The following blog is a guest post from Vonage.

Working with technology has become the new norm, no matter what sector you work in. The right technology can be a driving force behind an excellent team, assisting with marketing, generating leads, and much much more. 

But did you know that your business’s software, apps, and other technologies may be outdated even if once considered state-of-the-art? If you want to remain ahead of the competition in your chosen field, you need to adapt to changes in technology and utilize the best tech. This is where Revtech stacks come in. 

A Revtech stack is a collection of technologies that help businesses to transform their operations and processes. Using a Revtech stack, you can improve how your business interacts with customers and collects data. This article will explore what a Revtech stack is and how it can transform your business. 

What is Revtech?

Revtech stands for Revenue Technology and is used by a revenue operations team (RevOps). It is an updated approach to marketing and sales, using a digital platform combining fantastic software like machine learning, AI, and cloud-based software. Although you may have heard of AI and cloud software, machine learning is a growing industry which is currently in high demand.

Machine learning is a branch of computer science mixed with AI. It focuses on algorithms and data, learning from documented trends and sales performance. This allows it to make informed recommendations for your business while minimizing risk.

Revenue Technology can modernize the way your business works. You can also implement Revtech alongside other modern working methods, such as using a VoIP (Voice over Internet Protocol) phone system. This comparative guide on VoIP or landline explains everything in more detail. 

RevOps

If your business is unaware of RevOps, it’s time to get acquainted. A RevOps team can assist your business in reaching revenue targets that align across customer success, marketing, and sales.

They can also help build a Revtech stack that correctly aligns with your business’s values, vision, and needs. Once you know how to successfully grow your RevOps practice, you can benefit from better results across the board. 

What is a Revtech stack?

A Revtech stack is a collection of technologies enabling businesses to modernize their processes, operations, and business models. A Revtech stack can include software, hardware, automation tools, and cloud-based solutions (which are explained in more detail below). 

When used properly, a Revtech stack can improve efficiency, increase productivity, and provide a more satisfactory experience for each customer. By using a Revtech stack, your business can also streamline operations and reduce costs. 

Technologies used in a Revtech stack

The technologies you use in your Revtech stack will depend on the nature of your business and how you want to revolutionize it. Some of the most common technologies found in a Revtech stack include:

• Automation tools: An automation tool is a highly beneficial application for your business. Automation can be used in many ways, no matter your industry. With an automation tool, employees can complete repetitive tasks quickly and with little chance of error. Once these tools have been programmed, they will perform tasks in the background. Automation tools can include robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML).

• Cloud-based software: The cloud is another important technology that your business should utilize if it doesn’t already. With cloud-based software, your business can access data from anywhere, at any time. Cloud technology has many uses, including cloud-based virtual phone systems. If you want more information on this type of technology: Vonage answers what is a virtual phone system. 

• Collaboration tools: A collaboration tool is exactly what it sounds like, a way for your teams to communicate and collaborate effectively. There are many different collaboration tools available, so which you choose depends on the needs and size of your business. 

• Customer relationship management (CRM) software: CRM can help businesses manage customer relationships. With a CRM, you can view customer data and have everything you need in one platform. CRM also integrates with other platforms, such as social media.

All of these technologies can be used to improve the way your business works. 

To build the perfect Revtech stack, you’ll need to know how to start a RevOps team. You can either hire specialists in the field or RevOps or look at your team’s existing skills to see if they could fill a role in your new team. 

How your business can benefit from using a Revtech stack

Now you understand more about how a Revtech stack works and what technology is used, it’s time to focus on what a Revtech stack can do for your business.

1. Reduced cost

Your business can use a Revtech stack to reduce labor costs and increase efficiency by automating tasks and streamlining business processes. Additionally, cloud-based solutions can reduce the need for expensive hardware and software licenses. 

By cutting costs, businesses can invest in other areas, such as marketing or instant support services. Employees, management, and customers depend on you to keep business operations running smoothly. By using the money you save by not needing to expand your team, you can focus on improving how your business manages and resolves issues. 

Using an On-Demand Assistant such as RealVNC, your team can start a support session with a customer in a matter of seconds. This will improve customer satisfaction and ensure better reviews for your company, generating more leads and website traffic. 

2. Improved efficiency

One of the fundamental benefits of a Revtech stack is that it improves efficiency. Automation tools can complete repetitive tasks that are usually done manually. From data entry to invoicing and inventory management, automation tools will turn arduous tasks into a simple click of a button. 

Through automation, employees can focus on more important tasks requiring human expertise. Furthermore, by automating repetitive tasks, businesses can improve accuracy and reduce human error, ultimately delivering a better product or service.

3. Increased productivity

Employees are more likely to feel unproductive and tired of their job role when constantly carrying out repetitive tasks, rather than stimulating ones. With automation tools completing tasks faster than humans and with fewer errors, businesses can complete more work in less time. This allows employees to carry out valuable work, allowing them to learn, grow, and achieve. 

Completing tasks quickly offers more room for business development and growth too, which is essential if you want to upscale but don’t have the budget to employ more staff yet. Increased productivity also leads to increased revenue and customer base.

4. Real-time data

A top trend within revenue operations at the moment is the need for clean data. By using the right revenue technology, you can improve data hygiene practices, ensuring that any sales data is efficient and organized. No business wants to deal with inaccurate, incomplete, or duplicate data, especially regarding sales data. This leads to revenue loss, client misunderstandings, and cold leads.

A good business knows how to use its data to improve processes, increase revenue, and ultimately deliver a better customer experience. With the help of a Revtech stack, your business can view data in real-time. 

Managers and employees can then make more informed decisions based on recent numbers, as working on data more than a few hours old won’t give the same results. Real-time data can therefore support businesses in identifying current problems and opportunities. 

5. Future-proofing

A Revtech stack, which includes a PIM solution (Product Information Management), can help future-proof businesses by centralizing and managing product information, automating tasks, improving efficiency, and providing real-time data for better decision-making, ultimately delivering a better user experience and increasing productivity and revenue. With the use of cloud-based solutions, your Revtech stack can scale with the needs of your business, allowing you to add or remove resources as needed. 

By embracing new technology, businesses can stay relevant and adapt to changes in the market as they happen. Another clever way to future-proof your business is by registering your domain name. For example, if your business is situated in Malta, you should look at getting a .mt domain registration. Being one step ahead in every aspect makes for a successful business.

6. Better user experience

Finally, a Revtech stack can provide a better user experience. Your business can deliver customers a better product or service by streamlining processes and reducing errors. By utilizing cloud-based solutions, your business can also provide customers with access to real-time data. This makes it easier for customers to track orders, view invoices, and chat with support.

If you haven’t got one already, you should consider using a telephone system so customers can reach you quickly. There are different types of telephone systems available that can fit within your RevOps strategy. Implementing a reliable telephone system aligned with your RevOps strategy not only enhances customer loyalty, retention, and trust but also ensures prompt accessibility for customers seeking quick assistance.

Revtech: The future of sales

A Revtech stack is a crucial component of any modern business. By modernizing company operations and processes, your business can improve efficiency, reduce costs, increase productivity, and provide a better experience for each customer or service user. 

Customers are at the heart of everything we do as a business, so using technology that can provide an improved customer experience and more accurate data is the way forward to a better way of working. 

About QuotaPath

QuotaPath rallies teams around their financial goals by providing a source of truth for sales compensation, including automated commission tracking, in-app collaborative tools for compensation design and commission discrepancies, and more. Learn more today.

To say we know sales compensation is an understatement.

We’ve held hundreds of sales compensation plan consultations and automated plan management and commission payments for thousands of plans with QuotaPath. 

We’ve seen some incredible results from plans that drive the right selling behaviors, and we’ve also seen some that are so wildly complex that even the people who designed them struggle to explain them.

What separates the good from the bad?

In our experience, the commission structures that perform the best follow our sales compensation philosophy:

Every single sales compensation plan should be: simple, logical, and fair.

When your plan doesn’t adhere to the above, you’re likely to add unnecessary complexities while risking losing your team over compensation discrepancies. 

So, how do you design a plan from the ground up or edit an existing one, while sticking to a model that’s simple, logical, and fair?

Start by ensuring your plan answers these three questions:

• How much? (on-target earning and pay mix)
• For what? (quota amount and quota frequency)
• How to execute? (commissions/bonuses)

Below, we go through each question in the sales compensation design process.

First, answer how much

Regardless of the role you are building the plan for, account executives, sales directors, and business development reps, the first question you must answer is how much? 

This means setting fair and logical on-target earnings (OTE) and pay mixes. 

The OTE represents the total compensation a person in that role will make should they achieve 100% attainment. This number includes the base salary and the variable pay. The biggest challenge around setting OTEs is that they are often unrealistic. Meaning, companies lure amazing sales talent through the door with hefty OTEs that, in actuality, only 10% of the team is reaching. To check the health of your OTE, use our Free Quota:OTE Ratio Calculator.

Meanwhile, pay mix marks the ratio of base salary to on-target commission. So, if half of a rep’s OTE is base salary and the other half is variable, that means the pay mix would be 50:50. 

We won’t tell you how much your OTEs should be, but we can tell you that the most common pay mix for a sales rep in SaaS is 50:50. 

For determining your OTE, we recommend following trends based on industry, region, experience, and title. You can check out Betts Recruiting’s compensation guide for the most recent industry-wide numbers. 

Additionally, you can reference ZipRecruiter, Salary.com, and Built In for up-to-date salary and OTE averages for common commissionable roles in tech. These numbers change based on audience input but it will give you a pretty good baseline. 

Once you have your OTE set, you’ll then determine your pay mix.

Below, we’ve sourced some of the most commonly used pay mixes for various sales roles.

Second, answer for what 

Now you’re ready to address the second question your comp plan must answer: for what? 

You will do so by determining the quota amount and quota frequency. 

The first thing to remember when setting a quota is that there is no “one way” to do so. However, typically organizations will create one using some or all of the following methods:

• Guessing
• Quota:OTE ratio
• Historical performance
• Financial model

Our Chief of Staff Graham Collins wrote an excellent blog on how to set SaaS quotas. Here are the key takeaways.

1. Quotas should be equal to some multiple of their OTE.

This could be 3x the rep’s OTE or 8x and will depend on the size and stage of the company. Our rule of thumb? 

Set a quota 5x that of the rep’s OTE.

This will ensure that the sales the rep brings in outweigh the cost of keeping the rep on your team.

2. Consider your sales cycle length and company stage.

To ensure that your quotas are reasonable, use data and benchmarking reports from companies that match your size and sales cycle from your industry. You should also talk to peers, mentors, and your friends at QuotaPath.

3. Be ready to adjust.

You should adjust your quotas regularly to account for changes in the market, economy, and your own sales process. Plan to regularly review and adjust quotas to ensure that they remain challenging but achievable (fair) for your team.

Third, answer how

The last question you’ll answer is how? Meaning, how will you execute the above? The answer is in designing triggers, rates, and bonuses that get your team to OTE. 

Check out these simple, logical, and fair comp plan examples below. 

Account executive comp plan examples:

• Single Rate Commission
• Commission with Accelerators
• Commission with Multi-Year Accelerators

Sales development rep comp plan templates:

• Qualified Opportunity Bonus
• Qualified Opportunity Bonus & Closed Won Commission
• Demos Completed Bonus

Account manager comp plan resources:

• How to design an account manager commission plan
• 3 commission pay examples for Account Management & Customer Success

Sales Leadership compensation package resources:

• What to include in your VP of Sales compensation package
• Sales manager compensation plans
• 5 sales compensation plan examples to get you started

Build your comp plan

You should have a solid foundation to begin building your new compensation plans. Should you need additional help, or if you want to see how QuotaPath can bring clarity and automation to your sales compensation process, please reach out to our team to schedule a chat.

You’re also invited to sign up for a free 30-day trial with QuotaPath, where you can design a plan using one of our customizable templates or build a unique plan directly in-app. Once you’ve built a plan, then you can sync your CRM and invite team members to your workspace to automate commission tracking. 

The demand for sales enablement is growing rapidly.

According to Korn Ferry, the practice of sales enablement in sales organizations has practically doubled since 2017.

So, it’s not surprising that Gartner expects sales enablement budgets to increase by 50% over the next five years.

This growth is being driven by consistently shifting buyer preferences that require sellers to continually adapt and change the way they sell. Otherwise, companies risk falling behind the competition as the buyers’ journey becomes increasingly self-service with less sales involvement.

Enablement arms reps with the right tools, training, coaching, and content to effectively engage with buyers earlier in the sales process and influence buying decisions.

But this is just the tip of the iceberg.

Let’s take a closer look at the practice of sales enablement and the role of sales enablement manager.

What is sales enablement?

Korn Ferry’s sales enablement definition is “a strategic, collaborative discipline. It’s designed to improve sales results by providing consistent information, training, and tools that allow sellers and their managers to add value to every customer interaction.”

Establishing a sales enablement practice benefits sales teams by increasing sales revenue, improving client acquisition for the sales team, and creating more selling time for sales reps.

According to the State of Sales Enablement Report, organizations with sales enablement processes or practices in place for two-plus years report a 7% improvement in win rates and up to 14% better quota attainment. These organizations are also 48% more likely to experience high buyer engagement and 10% more likely to have greater rep engagement which reduces sales rep turnover.

Implementing a sales enablement practice involves providing reps with:

• Strategic sales content: Content intentionally created for different buyer roles and scenarios making it easier for reps to stand out in the competitive landscape and grab buyers’ attention.
• Tailored sales plays: Structured guidance on how to approach various selling situations based on the specific buyer and their needs.
• Optimized cross-functional communications: Better communication across customer-facing teams creates a seamless buying experience while unifying internal teams.
• Continuous training and coaching: To optimize sales rep performance and knowledge.
• An effective tech stack: To streamline sales processes and increase efficiency.

That’s what sales enablement is. Now, let’s look at the person who executes this practice.

What is a sales enablement manager?

A sales enablement manager is one of the core members of any effective enablement team. This person is responsible for implementing programs and initiatives that allow customer-facing teams to successfully execute key elements of their roles, especially in terms of sales and revenue.

The responsibilities of a sales enablement manager typically include :

• Initiating the creation and implementation of relevant training, content, sales messaging, processes, materials, and tools to support the sales or revenue team.
• Supporting product launches by preparing and empowering sales reps to understand and sell your products or services.
• Handling foundational and continuous learning programs for sales. This includes aspects like training content creation, scheduling, delivery, and deployment.
• Tracking and analysis of sales enablement content, courseware, and platforms.
• Supporting the buying and selling processes throughout the buying journey from lead generation through its conclusion.
• Supporting the sales leadership team and frontline sales managers in performing management and coaching activities.
• Managing and coordinating sales enablement projects and activities.

Sales enablement managers commonly possess characteristics like:

Data-driven to gauge initiative results

Tech stack tool mastery to easily select the best tools for their team

Project management to facilitate handling multiple projects and initiatives concurrently

Keen knowledge and understanding of the Buyer’s journey to easily recognize changes and keep selling processes and motions aligned

Excellent communicator for easy cross-function collaboration and developing trust and behavioral change

Astute trailblazer to facilitate adapting sales to the evolving marketplace and buyers

Effective collaborator since they work across multiple revenue teams

Efficiently organized so they maximize their resources and make the most of their time.

Sales enablement managers are essential for developing support and momentum for initiatives that drive sales rep behaviors and outcomes.

Sales enablement manager salary

How much do sales enablement managers make? Great question. The average total earnings for sales enablement managers in 2023 vary depending on the information source, the geographic location, and the individual’s experience level.

According to ZipRecruiter, sales enablement managers earn an average of $110,915 a year.

Glassdoor pinned the salary a bit higher. Their data showed that a sales enablement manager’s average total annual earnings are $114,015 a year. This is based on an average sales enablement manager salary of $96,568 per year plus additional pay of $17,448 in the form of a cash bonus, commission, and profit sharing.

Meanwhile, salary.com’s aggregated data put a sales enablement manager salary at $105,047.

Lastly, the Sales Enablement Collective’s (SEC) Sales Enablement Salary Report 2023 showed that the average base pay for sales enablement managers responding to their survey earned $114,908 per year plus bonuses or commissions.

How has this salary changed over the years? The SEC’s 2022 report found that sales enablement professional salaries increased by 10.9% from 2021 to 2022. Plus, 75% of the 2022 respondents indicated they received some sort of bonus or commission in addition to their base salaries.

Sales enablement manager comp plans

If you’re curious how to approach a sales enablement manager compensation package, the SEC’s 2022 report included the most common breakdowns:

• Base/OTE dispersion of almost 75:25
• 25% variable, with a ratio of 50% personal and 50% business performance
• Bonus split 50/50 between quarterly revenue targets and personal objective-based incentives (MBOs), payable quarterly
• An employee stock plan
• 10% guaranteed restricted stock units (RSU)
• 10% of base salary paid quarterly if objectives are achieved
• An 8% bonus every year
• 20% of total comp is variable pay
• Uncapped commission if reps hit quota

Geographical differences in sales enablement manager salary

Sales enablement managers’ salaries vary based on geography. For example, sales enablement professionals are paid more in North America than elsewhere in the world, according to both SEC salary reports. 

What’s more, according to ZipRecruiter, the top 10 highest paying cities for sales enablement manager jobs included Berkeley, CA topping the list, followed closely by Daly City, CA, and San Mateo, CA. The top three beat the national average by 22.7 – 27.9%. Plus, there was a variance of 12% in sales enablement managers’ salaries between Berkeley and the 10^th city on the list, San Diego, CA.

Sales enablement manager jobs and experience

To get a better understanding of the available job market for this role, we sourced the same platforms above. Our search revealed that ZipRecruiter currently has 756 sales enablement manager job postings, the most among the platforms we queried.

Skills and experience commonly required include:

• 4-5 years of sales or sales enablement experience: Gives you a deep understanding of sales processes and their relationship to the buyers’ journey.
• Experience with training content development and delivery: Facilitating effective sales training.
• A strong understanding of go-to-market motions and how enablement fits in: To be able to actively participate in the creation and implementation of GTM strategies and know your role in the process.
• Excellent written and oral communication skills: to be able to effectively communicate with team members across the organization.
• Expertise in using and learning a range of software, including Salesforce and LMS platforms: To efficiently use software, effectively build and maintain the best tech stack for the sales team, and teach the sales team how to use it. 
• Proven success in time management and meeting deadlines: To juggle the many demands placed on a sales enablement manager.
• The ability to learn complex and technical subjects very quickly: To easily keep pace with the ever-changing technologies involved.
• Strong collaborative and interpersonal skills: To work well with a large number of cross-functional stakeholders.

How to become a sales enablement manager

Considering a job as a sales enablement manager? To secure a position in this role it’s best if you have a bachelor’s degree and several years of sales or marketing experience. 

You don’t need a specific type of degree, but one in business or marketing can boost your chances.

Sales enablement managers often start out in a sales rep role and ascend to a supervisory role. Others transition into a marketing role, or a sales training or operations position.

Additional skills that will increase your odds of attaining a sales enablement manager position include:

• Excellent organizational skills
• Effective communicator
• Being self-motivated
• The ability to multi-task
• Familiar with a variety of software and technologies
• Experience creating content

If you’re missing some of these additional skills, don’t let that stop you from pursuing the role. Connect with enablement managers in your network and learn how they got into their roles. Plus, if you’re a rep right now, see if you can collaborate on enablement projects to start building out your experience and enablement portfolio.

Boost sales rep performance with sales enablement

A sales enablement manager is one of the core members of any effective enablement team. They are critical for creating support and momentum for programs that drive sales rep behaviors and outcomes.

The average sales enablement manager’s salary is between $96,568 and $114,908 plus a bonus or commission. You only need a bachelor’s degree and several years of sales or marketing experience, plus some key skills to become a sales enablement manager. There are no role-specific degrees or training requirements to get started. Although, you could earn certification from this HubSpot Academy Sales Enablement Training Course. 

About QuotaPath

QuotaPath automates sales commissions to bring standardization, visibility, and efficiency to your variable compensation process. Motivate your revenue team by providing real-time insights into sales compensation, forecasted earnings, and attainment. Trust the data is accurate by syncing directly from your CRM and providing a source of truth for Sales, Finance, and RevOps. Start a free 30-day trial with QuotaPath, or schedule a demo with a team member.

Learn how to comply with ASC 606 revenue recognition when it comes to sales commissions.

To keep financial records complete, accurate, and comparable, companies follow five core accounting principles. These include: the revenue principle, the expense principle, the matching principle, the cost principle, and the objectivity principle.

When compliant with these principles, companies put themselves in the best position to succeed with investors, valuations, buyers, and more.

But, these principles — and standards to help companies meet the criteria — often change as markets evolve.

One newish standard that is of particular interest to us is ASC 606, which the Financial Account Standards Board (FASB) created ASC 606.

What is ASC 606? It’s an accounting standard that dictates which accounting periods businesses should attribute revenue and expenses. This revenue recognition principle applies to any company with recurring costs. 

So, businesses that offer goods and/or services under a written agreement must pay attention to this rule. Because failure to comply puts you at risk of incurring substantial fines and an unexpected audit visit.

Aside from the non-compliance risks, adhering to ACS 606 helps businesses gain a better picture of their financial health. Establishing this practice is especially important for startups wishing to raise money by approaching investors or applying for bank loans.

When did ASC 606 become effective? The FASB introduced this new revenue recognition principle in 2014. The rule applied to public companies in 2018, followed by private businesses.

Then, the FASB added Subtopic 340-40 to ASC 606 and became effective for fiscal years after December 15, 2017. Under this subtopic, Other Assets and Deferred Costs: Contracts with Customers, it’s necessary to implement ongoing reporting and record-keeping of costs incurred while securing or fulfilling a contract with a customer. These costs include advertising, travel expenses, and sales commissions.

To comply with ASC 606, we recommend following the five steps below.

Steps to be compliant with ASC 606

Before we dive in, understand that the complexities of revenue recognition vary slightly based on the specific goods and services sold. In SaaS, where subscription-based sales are most common, ASC 606 compliance grows an added layer of complexity. 

For subscription-model businesses,  comply with ASC 606 revenue recognition by following this 5-step approach. 

Step 1. Identify the contract with a customer

First, identify the contract. In terms of ASC 606, a contract marks an agreement between two or more parties and requires:

• Approval by all parties
• Definitions of the obligations of all parties and verify they are committed to executing the agreement
• Identifying the goods or services being supplied
• Detailing the payment terms
• Showing that the contract or deal is commercially substantive, predicating that the future entity cash flows will change
• That it’s based on the likelihood that payment will be received by the vendor for the goods or services being transferred

Step 2. Identify the performance obligations in the contract

Next, you’ll want to outline the performance obligations in the contract. In the context of a contract, we define performance obligations as promises made in the agreement between the vendor and the customer. Under ASC 606, businesses must itemize what the rule refers to as “distinct” performance obligations. What makes each performance obligation “distinct” is being of value to the customer as a standalone item,  independent of other goods and services in the contract.

Step 3. Determine the transaction price

Now, you’re ready to determine the transaction price, which is the agreed-upon price the vendor expects the customer to pay in exchange for the goods or services is the transaction price. This figure excludes sales tax or other third-party variables. You must also consider the value of all cash and non-cash compensation and factor in any discounts or other pricing modifications designated in the contract.

Step 4. Allocate the transaction price

Then, you’ll allocate the transaction price. This is the step where the total transaction price is divided and attributed to specific performance obligations under the contract. This can be particularly difficult to determine for recurring payments under a subscription-based transaction where the performance obligation is continuous.

Step 5. Recognize revenue when the entity satisfies the performance obligations

This next step is the most important as it pertains to sales commissions. In Step 5, you should aim to recognize revenue for performance obligations as your team completes them. This typically occurs when the contract starts or when you receive payment. In the case of a single performance obligation, you should recognize the revenue in the accounting period when the order is fulfilled — not when the customer places the order.

However, for a continuous performance obligation, such as a year-long subscription to a software service that’s paid monthly, you will recognize each monthly payment during the accounting period when the funds are received.

How QuotaPath’s Ledger can help with recognizing and reporting commissions correctly

The five steps above will help you remain compliant. You can manage amortization schedules manually, via spreadsheet, or you can recruit the help of a smart solution to do it more accurately and efficiently. 

QuotaPath Ledger allows your accounting team to consistently capitalize and amortize commission expenses in compliance with ASC 340-40. 

Ledger provides the flexibility to recognize commission expenses according to your scheduling requirements.

With Ledger, you simplify month-end closing processes, keep up with all the details as they arise, and eliminate errors. Plus, you gain the ability to create easy-to-read, audit-ready reports quickly.

Start complying with ASC 606 revenue recognition

Failure to comply with the revenue recognition principle carries risks like fines and surprise audits. Aside from risk avoidance, proper revenue recognition enables businesses to gauge their financial health. Although this is valuable for all businesses, it is particularly important for startups that want to raise money.

Are you ready to simplify ASC 606 revenue recognition? Try QuotaPath for free for 30 days, get familiar with Ledger, and integrate with Stripe or QuickBooks for seamless implementations.

The following blog includes free commission calculators to help you manage and track deals.

Regardless of how attractive a compensation plan may be, it won’t motivate salespeople unless they understand it.

The ability to accurately calculate their actual and forecasted earnings gives sales reps a clearer understanding of how their comp plan works. It’s also a great way to help your sales team learn how to optimize their earnings.

Armed with this information, salespeople can set personal and professional goals that inspire them even more than the money itself.

This is important because there are two types of motivation to keep reps motivated:

• Extrinsic motivation: To work harder for a higher commission rate and a particular outcome.
• Intrinsic motivation: Taking action to fulfill a personal desire or goal.

Most salespeople are motivated by some combination of these two. 

So, it’s important to give them the tools necessary to show how they’re trending toward extrinsic and intrinsic factors. For instance, by showing how deals in the pipeline amount to actual earnings for the rep, you create concrete gains or losses. That way reps can see and understand the personal impact of winning or losing the deal. 

 According to Thomas Egbert, Head of Finance at Prefect, this is a must.

“Now that I’ve seen that reps have visibility into how their pipeline translates into earnings, and how powerful it is to be able to forecast deals, I’d absolutely consider this feature a requirement,” said Thomas, who implemented QuotaPath with his team.

This visibility also empowers reps to own and optimize their potential earnings.

A, “Our reps realized they could run scenarios and see how much they could earn from our monthly kickers.,” said Joe St. Germain, VP of Sales at Blackthorn.

This led to big pushes from reps as they moved to maximize the accelerators set by Joe fully. QuotaPath’s ability for reps to run “what if” scenarios also broke down how much they would need to book monthly to lock in an extra 2 percent per deal toward the end of the year.”

That’s the type of clarity, accountability, and motivation you can foster with QuotaPath’s sales incentive platform. But if you’re not ready to begin a 30-day trial to automate commission calculations, we offer free compensation tools that you can immediately adopt. 

Commission calculators

Commission calculators simplify tracking and computing sales compensation earnings per sale or period, quotas, commission rates, and on-target earnings (OTEs). These templates help sales reps figure out where they stand while giving leadership a starting point to build comp plans.

We created a couple of free commission calculators to make your life easier:

Sales commission calculator (for reps)

This easy-to-use commission spreadsheet streamlines the process of tracking and calculating sales commissions. It only takes 4 inputs and 3 simple steps to see how much an individual sales rep has earned.

Here’s how it works:

• Download your free sales commission calculator.
• Input your Base Salary, Commission Rate, Quota, Quota Frequency, and On-Target Earnings on the ‘Home’ page of the spreadsheet.
• Navigate to the ‘Deals’ tab to input your deals.
• View your total sales and commissions on the ‘Monthly Totals’ tab to track the attainment of your monthly goals and commissions.

For example:

Judy has a base salary of $50,000 with a monthly quota of $40,000 and a 10% commission rate, so her OTE is $98,000.

She enters her deals into our handy commission calculator to make sure she’s on track to hit quota:

1st deal for $20,000 = $2,000 commission

2nd deal for $8,500 = $850 commission

3rd deal for $12,500 = $1,250 commission

4th deal for $6,500 = $650 commission

On the ‘Monthly Totals’ tab she can see that her total sales for the month are $47,500 and she has earned total commissions of $4,750. This might also qualify her for an extra bonus or accelerator.

All Judy had to do was enter a few figures — no complex computations required.

Sales compensation calculators (for leadership)

Our free Sales Compensation Calculator consists of three calculators in one. It simplifies the process of determining sales quotas, commission rates, and on-target earnings (OTEs).

Each of the three calculators uses the same five variables of quota, commission rate, variable compensation, base salary, and OTE. When you input three variables the other two are calculated for you.

Sales Quota Calculator

When you use the sales compensation calculator to generate a sales quota, you need to input the base salary, OTE, and commission rate. 

The application subtracts base salary from OTE, resulting in the variable compensation value. It then divides variable comp by the commission rate to determine the annual quota. 

Next, it divides the annual quota by 12 or 4 depending on whether you requested a monthly or quarterly quota.

Commission Rate Calculator

The Commission Rate Calculator is the second of the three calculators in the Sales Compensation Calculator. 

How to find a commission rate with the calculator: Start by providing base salary, OTE, and quota, then select yearly, monthly, or quarterly from the dropdown.

Variable compensation is calculated first by subtracting base salary from OTE. Then we divide variable comp by the quota figure you entered to generate an annual rate or divide it by 12 or 4 to result in a monthly or quarterly commission rate according to your selection.

On-Target Earnings Calculator

The OTE calculator is the third calculator in the Sales Compensation Calculator. You need to input base salary, commission rate, and quota to find OTE. We multiply the quota by 1, 4, or 12, based on whether you specified yearly, quarterly, or monthly quotas. 

This results in the variable compensation figure, which we then add to the base salary to generate your OTE.

Commission tracking with QuotaPath

Although simplicity is essential when creating a comp plan, you sometimes need to go beyond a single rate commission plan. 

Adding new compensation plans or scaling your sales organization adds complexity to your comp plan. That’s when it’s time to consider automating the process of tracking and calculating sales commissions in lieu of manual processes.

It’s easy to get started with QuotaPath. Sign up for a 30-day free trial. 

Then complete three simple steps:

1. Build your sales compensation plans.
2. Sync your CRM.
3. Invite team members.

Our Home feature guides you through the onboarding process to get you up and running and will flag for you a priority of tasks once you’re up and running.

Then you’re ready to use QuotaPath to automate commission calculation and tracking.

Start using a sales commission calculator

Sales reps are only motivated by their comp plan when they fully understand it. 

Enabling them to run what-if scenarios inspires them to set personal goals that further fuel their motivation to achieve greater success.

Commission calculators can help sales reps gain a better understanding of their full earnings potential and see how they can reach both their quota and personal goals.

Additionally, commission calculators lend a hand to leadership looking to simplify the process of determining sales compensation calculations like sales quota, commission rate, and OTE.

When it’s time to scale your sales force or go beyond a single rate commission, manual methods simply aren’t effective or accurate. That’s when it’s time to automate the process of tracking and calculating sales commissions. See how easy it is to automate sales comp calculations. Sign up for a free 30-day QuotaPath trial. Or, schedule time with our team to see how our solution can support your compensation models.