AutomationCommissionsProduct InfoSpreadsheets

Can Salesforce Calculate Commissions?

By May 14, 2019 No Comments

One of the coolest experiences I had at Harvard Business School was stumbling across a dusty plaque that hung on the wall of one my classrooms–Aldrich 108.  The plaque had an image like this:

It read:

In this room in 1978, Dan Bricklin conceived of the first spreadsheet program. VisiCalc, original ‘killer app’ of the information age, forever changed how people use computers in business.

The image above is one of Dan’s earliest sketches of VisiCalc, the first spreadsheet.  Legend says he used his invention to wow professors and fellow students with the speed, breadth and depth of his analysis.  

Why share this story at the beginning of an article about using Salesforce for commissions?  Well, spreadsheets were one huge step forward in calculating commissions. Salesforce was the next step function improvement.  

The current state of the art is to use Salesforce + Excel.  That’s how most organizations do their commissions.

But we are on the cusp of another seminal change in business software.  In this article, I’ll show you how you could use Salesforce to calculate your commissions and why you should use Spiff.  

Here are the topics we’ll cover in this post:

Brief History of Salesforce

We started this article talking about the invention of VisiCalc, the first spreadsheet.  Spreadsheets are still, in my opinion, the most successful business software ever created.  The second most successful business software, after Excel, is Salesforce as you can see in this data from Okta.

Salesforce started 20 years after VisiCalc, in 1999.  It was a pioneer in Internet-delivered “Saas” software.  It almost completely demolished its largest, non-Saas competitor, Siebel Systems, over a period of 5-6 years.

Salesforce brought all of the benefits of modern enterprise software over spreadsheets.  We don’t have space in this article but you can read more about all of the benefits of commission software versus Excel here.  Salesforce does many things well but it doesn’t handle commissions well.  True, I’m biased. So I’m going to walk you through an example of creating your commission calculations in Salesforce.  

How To Calculate Commissions In Salesforce

Ok, you’ve gotten yourself all set up on Salesforce.  As amazing as Salesforce is, it was probably a pretty heavy lift to get set up.  You, or a consultant, probably spent a lot of time in this part of the app:

Well strap in because building your own commission software in Salesforce is going to be even harder.

Building a commission system in Salesforce will require the following:

  • Building custom commission objects
  • Adding custom attributes to those commission objects–like commission amount
  • Adding custom formulas that automatically calculate those attributes
  • Creating a set of triggers to initiate custom calculations

It’s complicated.  So much so that we built a little guide for you if you are interested.  Just be warned, we worked hard to create a useful guide but we believe it will convince you to look into commission software like Spiff.

Download our How-To Guide:  Using Salesforce for Commissions. The guide will walk you through the steps to create a commission system in Salesforce.  It will help you automate a complex commission rule for an example company. You can use the general principles from the guide to create your own customized commission system.

Using Salesforce for Commissions: Pros and Cons

In the previous section we showed how hard it is to set up commissions properly in Salesforce.  Here at Spiff, we’ve spoken with folks at Salesforce. We believe Salesforce realizes that it’s software isn’t ideal for handling incentive compensation systems.  In the past they have invested in and partnered with other companies that focus on commissions.

Now let’s look at the pros and cons of Salesforce vs. Spiff…

If it were possible, there would be some big pros to building a commission system in Salesforce.  You could save money because you don’t have to pay anything extra for commission software. Your reps would never have to leave the CRM to understand how much they get paid.  You could centralize all of the data about your deals in one place.

That all sounds good.  So what are the drawbacks?

There are several important problems with using Salesforce to calculate commissions:

  1. It’s really hard to set up
  2. It’s practically impossible to update as your commission plans change
  3. It will break easily
  4. It’s hard to audit
  5. It lacks many important features like:
    • Clawbacks
    • Commission optimization and planning tools
    • Motivation prompts for your team
    • Integration with other systems like payment or payroll
    • Accounting automation like ASC 606
    • Team management
    • Quota management

Here’s how we look at the trade-offs.

Spiff:  The New Approach to Commissions

Spiff wants to become the new standard in commission software.  Existing software solutions just don’t work.   Every company does commissions differently.  The typical commission spreadsheet includes:

  • Complex logical lookups
  • NumerousMathematical transformations, and
  • Advanced Excel functionality 

Think vlookups, mins and maxes, tax-plan accelerators, etc.

Salesforce can’t do it.  Business intelligence platforms can’t do it.  Spreadsheets can…but they don’t scale, they aren’t auditable, they aren’t shareable, etc.

Up until now, to automate commissions, companies would enlist software vendors who would essentially build a custom computer program.  But the only constant of commission plans is change. So the program would become out of date within a few months of going live.

Companies need a system that is scalable and easy-to-update that still has all of the customizability and mathematical power of Excel.

To do this, Spiff had to create a whole new class of software.  We like to think of it as the world’s first programming language for business users.  It’s based on only a few simple building blocks.  But you can combine them to create an infinite number of outcomes.  

It’s a lot like Minecraft or Legos….once you understand how to connect a few basic blocks, you can build anything.

We started this entire article by talking about the world’s most successful business software–Excel.  Excel is successful because it made complex math analysis easy for business users. Spiff is the next big evolution in software for business users. And Spiff is just getting better every day.

You can see a bit of Spiff’s power in this video:

Here at Spiff we view it as our problem if you have any trouble adjusting your commission plans.  So we don’t charge ongoing professional services fees. We even update your plans for you in most cases.  Our hope is that over time, you’ll be able to do more and more on your own.  But, if you prefer a long-term relationship where we do most of the work–that option is available too.

Ready to onboard?  Click here to chat in for a demo.  Or request a demo here.

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