Challenge
- Commission payment was being held up for as much as a day each week which caused challenges with retention of some of the sales representatives and morale generally.
- The business could not scale if the payment process was not improved.
- Risk of revenue leakage if payments are calculated incorretly and running on thin margins did not leave much spare margin.
- Wanted to reduce the amount of time spent on reporting.
- Complex payment structure – depending on their contract sales representatives were being paid different commssions. The commissions were paid over a 6 week period with for example 20% paid in Week 3 and 80% in Week 6 less any clawbacks.
Solution
- Automate the weekly commission reconcilation process. period.
- Set up detailed reporting
- Clawing back money from any of the sales reps was very difficult so everything had to be correct.
Outcome
- Commission preparation time reduced from days to hours.
- Level of supporting reporting and documentation massively improved.
- Reps were impressed and pleased with getting paid on-time and even early
- Revenue leakage identified
- Disputes with sales reps decreased.
- Word of mouth about our payment times increased the number of people wanting to work for us.
- Hundreds of thousands of dollars in unpaid commissions were identified.
- In a tight financial position at one point, plugging the revenue leakage meant the difference between surving and closing their doors.
- Resulted in operational cost savings of $30k per year.