How to Track Sales Commissions

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Commission reports track individual and company progress.
Commission reports track individual and company progress. (Image: Photos.com/Photos.com/Getty Images)

A company that fails to track its sales commissions fails to motivate its sales force properly. A motivated sales force not only boosts profits but also keeps business owners or shareholders satisfied. Customers who deal with motivated salespeople derive a positive image of the company, because they are given the impression that their business is valued. A model of a commission tracking procedure is adaptable for all companies who pay commissions, from Joe's Used Cars to Wal-Mart. This tracking procedure also allows for the tracking of the lead sources that were used to attain the sales.

Things You'll Need

  • Computer
  • Microsoft Excel software
  • Bulletin board

Designate a specific deadline when all sales included in the commission report must be submitted. Enter the sales into a computer. A Microsoft Excel spreadsheet is a recommended report form as it allows for cumulative calculations. Daily results are added to create a weekly result. Weekly results are added together to create a monthly result. This allows for the identification of daily or seasonal trends.

Create an additional column to track closing rations. A closing ratio is the number of total sales attempts divided by the number of total sales. Additional bonuses may be awarded according to closing ratios percentages. Enter these results on an hourly or daily basis, according to your needs. This allows for comparisons between salespeople, as well as overall sales comparisons from day to day.

Create additional columns to enter lead sources. Track the percentage of sales that originated from leads provided from direct mail, referrals, television advertisements and the Internet, for example. If an improvement is needed in the results of a particular lead source, consider offering additional commission for sales made from that source. Create additional columns to compare the number of sales that were closed via personal visits with those closed over the telephone. This will aid in identifying salespeople who excel in each of these situations and those who need additional training in either area.

Publish the commission report on the company website. Also, post a hard copy on a company bulletin board. This promotes a competitive environment and keeps the company's sales success (or need of improvement) visible. Refer to the report in sales meetings to recognize high achievers. Use it during counseling sessions to point out the opportunities each salesperson has for improvement.

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References

  • "Making Millions in Direct Sales"; Michael G. Malaghan; 2005
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