Anyone within the financial advisory industry is familiar with spreadsheets, like Microsoft Excel or Google Sheets, for tracking commission management and recording other vital business information and activities. For many independent financial advisers, using spreadsheets to track and manage your sales commission streams is an easy, cost-effective business strategy that has the added benefit of being very user-friendly.
Spreadsheets, however, do come with their limitations. Limitations that become increasingly apparent as you begin to scale your operations and even increase your team, adding sales reps into the mix. For this reason, many IFAs and even advisory organisations are leaving static, manual spreadsheets behind in favour of more robust, advanced commission management software that offers the features and capabilities that enable seamless commission tracking and management.
So why are spreadsheets an outdated way to calculate sales commissions and manage your commission streams as an IFA? And what capabilities do commission management software solutions offer that give them an operational advantage? Keep reading to find out!
Can you track your commission using spreadsheets?
Let’s get this essential question out of the way: yes, you can calculate commissions as well as manage your commission rate and commission structure on spreadsheets.
Spreadsheets like Microsoft Excel provide a range of functions and features that make it easy for tracking and calculating commissions. Using the commission calculator on Excel, you can input and calculate your commissions based on different criteria.
This process involves manually inputting commission amounts, client and sales rep names and commission rates into their own spreadsheet columns and using Excel’s built-in calculator to individually handle each commission rate.
However, as user-friendly as they might be, a spreadsheet also comes with many limitations that can ultimately prevent you from scaling your operations and growing your revenue.
Why spreadsheets are an outdated way to calculate commission
Spreadsheets like Excel might initially provide the capabilities you need, especially when you are launching your advisory service or have limited clients. However, as you take on more clients, expand your service offerings and grow your team, spreadsheets will quickly turn from an asset to a liability. Here’s why!
As your clientele grows, so will your commission streams and rats, as well as complexities. You might even introduce tiered commission structures for different clients. All of these additional data complexities make it harder to manually manage each individual commission stream, especially as your team grows and you need to manage each employee and their delegated commission streams. The repetitive, manual processes will keep compounding, eating into more and more of your valuable time.
Lack of transparency
When commission rates are calculated and managed in spreadsheets, there’s no real-time visibility that provides full transparency into the current state of each commission stream. This lack of transparency makes it difficult to make swift business decisions and for employees to collaborate easily or take accountability as needed.
Greater risk of errors
Using a spreadsheet to calculate and track your commission skyrockets the chance of human error – errors that could end up costing you immensely. As your commission rates and structures evolve and become more complex, you’re going to need to change the formulas you use within your spreadsheets and ensure every rep and employee is using them too. All it takes is a single error to create a domino effect across your commission, revenue and expense tracking.
Your operations will grow in size and complexity over time and, at a certain point, you’re going to hit a ceiling in terms of what features your spreadsheets can offer to handle them. Things like automated calculations, real-time reporting and in-depth analytics and integrations with other tools like a CRM, ERP and payroll systems are not possible within a spreadsheet. All of these limitations will slow down your growth and scaling potential and limiting your revenue.
Commspace: Commission-tracking and revenue management made easy
Compared to manual, static spreadsheets that have limited real-time visibility, accessibility, features and integrations, commission management software is a far superior method of calculating, tracking and managing your multiple commission streams from a single interface.
Commspace, for instance, offers capabilities that enable you to seamlessly manage and grow your advisory business from anywhere in the world, and allow your team the same flexibility. Being entirely cloud-based, Commspace is completely device-agnostic and allows you to track and manage your team and commission streams from anywhere in the world.
It also offers extensive integration capabilities, access control that allows for tiered employee access to different business metrics, advanced reporting and analytics for all (and parts) of your operations, and personalised user support, among a host of other features.