Zach Spangler

Why Your Commission Process is... Broken

Research
The Short Answer

Why isn't your commission strategy crushing it?

The automotive industry standard for processing commissions... is, well, broken. But don't worry, there's good news. We'll unpack 20 reasons and look at the impact, scenario, and issue, then give you a glimpse of a better future.

Make no mistake - we want you to see 20 good reasons to get started with a better process.

Zach Spangler
Zach Spangler

1 min read

May 22, 2024

Why Your Commission Process is... Broken
The Details

Ever heard of the "big ass spreadsheet"? It's a term we affectionately use to describe those monstrous spreadsheets most dealerships rely on to manage commissions. You know, the ones—with 50 to 100 tabs, or maybe just a few tabs but a multitude of spreadsheets attempting to handle commissions. Having worked with hundreds of dealerships over the years, we've encountered all sorts of spreadsheets attempting to tackle the commission process. While some are more efficient than others, they all seem to hit a breaking point sooner or later.

In this article, we're diving into the reasons why your current spreadsheet commission process is falling apart. Chances are, whoever's handling your dealership's commissions can relate to at least 90% of these issues. We've categorized them into three main buckets: time, accuracy, and visibility. As we dissect these problems, we'll highlight which category each reason typically falls into and introduce a solution—Nimble Compensation—that can alleviate these challenges, allowing your team to reclaim their time and empower them with real-time, accurate commission insights.

Here's 20 reasons why your commission process is broken (and how we handle it):

Lack of Real-Time Earnings Visibility

Scenario: Picture this—your sales team is hustling day in and day out, but despite having access to various reports, they still can't seem to grasp how their efforts translate into earnings. As a result, they often miss out on bonuses, leaving them demotivated and impacting your dealership's overall performance.

Issue: How many times have you heard your sales team say, "I had no idea this was what I was going to make this month"? Despite your best efforts to provide clarity through numerous reports, what truly matters to your employees is their bottom line at the end of the month. The lack of real-time visibility into their earnings can be a significant barrier to their motivation and your dealership's success.

Impact: Visibility, Motivation

"The lack of visibility on variable pay creates a lack of confidence , it creates a sense of BlackBox"

-Aude Cadiot, Revenue Operations Lead

Your Future with Nimble Compensation: Now, envision a future where every member of your sales team can log in at any moment and see exactly how much they would earn if the month were to end today. With Nimble Compensation's real-time insights feature, you empower your team with clear, up-to-the-minute visibility into their earnings. Imagine the boost your dealership would receive from a motivated staff armed with precise goals and actionable insights.

Learn more about this feature: Real-Time Insights

Time-Consuming Commission Processing

Scenario: Your accounting team spends countless hours—weekends and overtime included—processing commissions to meet month-end deadlines. Despite the increasing complexity of commission structures and the growth of your dealership, your spreadsheet-based process remains unchanged, draining valuable time and resources.

Issue: The antiquated commission processing method, stuck in a time warp since the introduction of Excel, fails to keep up with the evolving dealership landscape. Your team is likely spending over two combined working days on commissions alone, hindering productivity and efficiency.

Impact: Time

Your Future with Nimble Compensation: Imagine streamlining your commission processing with Nimble Compensation's automated workflows. By automating repetitive tasks and leveraging intuitive features, you can drastically reduce processing time, allowing your team to focus on more strategic initiatives that drive dealership performance.

Learn more about this feature: Automated Workflows

No End-to-End Review Process

Scenario: Your dealership lacks a formal review process for commission calculations, leaving room for errors and potential fraud. Without proper oversight, discrepancies in compensation calculations slip through the cracks, impacting your dealership's bottom line and eroding trust among employees.

Issue: In the absence of checks and balances, errors in commission calculations can go unnoticed, leading to financial losses and compliance risks. The lack of a structured review process undermines the integrity of your compensation system and exposes your dealership to unnecessary risks.

Impact: Accuracy

Lack of a formal review process

Your Future with Nimble Compensation: With Nimble Compensation's built-in review and approval workflows, you establish a robust end-to-end process for commission calculations. By implementing automated validations and approvals, you ensure accuracy and compliance at every step, safeguarding your dealership's financial health and reputation.

Learn more about this feature: Review and Approval Workflows

Manually Updating Data in Spreadsheets

Scenario: Your team spends countless hours manually updating spreadsheets with data from the dealership management system (DMS), converting reports, and copying information, all in a bid to keep commission spreadsheets up-to-date. This tedious and error-prone process eats into valuable time and resources.

Issue: The manual data entry process is not only time-consuming but also susceptible to errors and inconsistencies. From downloading reports to copying data, each step introduces the risk of inaccuracies, leading to discrepancies in commission calculations and payroll processing.

Impact: Time, Accuracy, Sanity

The feeling of manually updating spreadsheets
Manual entry after manual entry

Your Future with Nimble Compensation: Say goodbye to manual data entry woes with Nimble Compensation's seamless integration with your DMS. By automating data synchronization and eliminating manual data entry, you ensure accuracy and efficiency in commission calculations, freeing up valuable time for your team to focus on strategic tasks.

Learn more about this feature: DMS Integration

Formula Errors

Scenario: Despite your best efforts, formula errors continue to plague your dealership's commission spreadsheets. Whether it's accidental overwrites or hard-coded values, these errors often go unnoticed until it's too late, resulting in inaccurate commission calculations and disgruntled employees.

Issue: Formula errors are a persistent headache for your dealership, leading to both overpayments and underpayments. The complexity of commission structures and the manual nature of spreadsheet calculations make it challenging to identify and rectify these errors in a timely manner.

Impact: Accuracy

Formula errors, formula errors, formula errors

Your Future with Nimble Compensation: With Nimble Compensation's formula validation feature, you can detect and prevent formula errors before they impact commission calculations. By implementing automated checks and alerts, you ensure accuracy and consistency in your commission spreadsheets, minimizing the risk of costly errors and boosting employee trust and satisfaction.

Learn more about this feature: Formula Validation

Printing and Distributing Washout Sheets

Scenario: Every month, your accounting team spends hours printing and distributing washout sheets to notify employees of their earnings details. This manual process not only consumes valuable time but also introduces the risk of errors and delays in communication.

Issue: The reliance on outdated communication methods like printed washout sheets is inefficient and ineffective. From printing and sorting to distributing, each step in the process is prone to delays and inaccuracies, leading to frustration among employees and additional workload for your team.

Impact: Time

How many times have you had to update and reprint a washout sheet? That goes away.

Your Future with Nimble Compensation: Say goodbye to printing and distributing washout sheets with Nimble Compensation's self-service portal. By empowering employees to access their earnings details online, you streamline communication and eliminate the need for manual intervention, saving time and reducing administrative burden for your team.

Learn more about this feature: Self-Service Portal

Managers Using Excel That Are Not Experts

Scenario: Your managers, while proficient in their respective roles, struggle with complex Excel spreadsheets used for commission calculations. Without proper training or expertise, they often make errors or encounter challenges in navigating the intricate formulas and functions.

Issue: Expecting managers to be Excel experts is unrealistic and inefficient. Their time and energy are better spent on driving dealership performance, rather than wrestling with spreadsheets. The lack of Excel proficiency among managers undermines the accuracy and reliability of commission calculations.

Impact: Time, Accuracy

Managers, manage people. Not spreadsheets.

Your Future with Nimble Compensation: With Nimble Compensation's intuitive user interface and guided workflows, managers can effortlessly navigate commission calculations without the need for advanced Excel skills. By simplifying the process and providing step-by-step guidance, you empower managers to focus on strategic tasks and drive dealership success.

Learn more about this feature: Intuitive User Interface

Manually Entering Pay Information into Payroll System

Scenario: Your HR team spends countless hours manually entering commission data into the payroll system each month. This tedious and error-prone process not only consumes valuable time but also increases the risk of inaccuracies and delays in payroll processing.

Issue: The manual entry of commission data into the payroll system is a cumbersome and inefficient process. From transcribing data from spreadsheets to inputting it into the payroll software, each step introduces the potential for errors and inconsistencies, leading to payroll inaccuracies and employee dissatisfaction.

Impact: Time, Accuracy

"We'd finally get commissions calculated to only then have to hand key [100 +] employees into payroll"

-Jon Espenes, Controller

Your Future with Nimble Compensation: With Nimble Compensation's seamless integration with payroll systems, you can automate the transfer of commission data, eliminating manual data entry and reducing the risk of errors. By streamlining the payroll process, you ensure accuracy and efficiency while freeing up valuable time for your HR team to focus on strategic HR initiatives.

Learn more about this feature: Payroll Integration

Manually Posting Journal Entries Related to Compensation

Scenario: Your accounting team spends hours manually posting journal entries related to compensation calculations each month. This labor-intensive process not only consumes valuable time but also increases the risk of errors and discrepancies in financial reporting.

Issue: The manual posting of journal entries is prone to errors and inconsistencies, leading to inaccuracies in financial reporting and compliance risks. From reconciling spreadsheets to inputting data into accounting software, each step in the process introduces the potential for errors and delays, impacting the overall financial health of your dealership.

Impact: Time, Accuracy

Easy automated journal entries

Your Future with Nimble Compensation: With Nimble Compensation's automated journal entry posting feature, you can streamline the process of posting compensation-related journal entries, eliminating manual intervention and reducing the risk of errors. By automating repetitive tasks, you ensure accuracy and efficiency in financial reporting, enabling your accounting team to focus on more strategic initiatives.

Learn more about this feature: Automated Journal Entry Posting

Closing Pressure

Scenario: Your dealership experiences immense pressure to close deals and submit payroll on time each month. This pressure leads to errors and delays in commission processing, as your team rushes to meet deadlines and ensure timely payment to employees.

Issue: The closing pressure imposed by tight deadlines and competing priorities can result in errors and inaccuracies in commission processing. From reconciling data to submitting payroll, each step in the process is susceptible to mistakes and oversights, leading to dissatisfaction among employees and additional workload for your team.

Impact: Accuracy

Your Future with Nimble Compensation: With Nimble Compensation's streamlined commission processing and automated workflows, you can alleviate the closing pressure and ensure timely and accurate payment to employees. By automating repetitive tasks and providing real-time insights into commission calculations, you empower your team to meet deadlines with confidence and efficiency, driving employee satisfaction and dealership success.

Learn more about this feature: Automated Workflows

Employees Changing Pay Plans

Scenario: A common headache for your dealership is managing pay plan changes for employees. Each time an employee switches pay plans, it involves a labor-intensive process of updating spreadsheets and recalculating commissions, leading to errors and delays.

Issue: The manual handling of pay plan changes is time-consuming and error-prone. From updating spreadsheets to recalculating commissions, each step in the process introduces the risk of inaccuracies and discrepancies, impacting employee morale and dealership performance.

Impact: Time, Accuracy

Your Future with Nimble Compensation: With Nimble Compensation's dynamic pay plan management feature, you can streamline the process of managing pay plan changes for employees. By automating the updating of pay plans and recalculating commissions, you ensure accuracy and efficiency in commission processing, empowering your team to adapt to changes seamlessly and drive dealership success.

Learn more about this feature: Dynamic Pay Plan Management

Updating Pay Plans

Scenario: Your dealership frequently updates pay plans to adapt to changing market conditions and business objectives. However, each time a pay plan is updated, it involves a labor-intensive process of reworking spreadsheets and formulas, leading to inefficiencies and errors.

Issue: The manual updating of pay plans is a cumbersome and error-prone process. From adding new columns to updating formulas, each step in the process introduces the risk of inaccuracies and inconsistencies, impacting employee morale and dealership performance.

Impact: Time, Accuracy

Your Future with Nimble Compensation: With Nimble Compensation's flexible pay plan management feature, you can easily update pay plans to adapt to changing business needs. By automating the updating of pay plans and formulas, you ensure accuracy and efficiency in commission processing, empowering your team to stay agile and competitive in the market.

Learn more about this feature: Flexible Pay Plan Management

Dynamic Commission Structures (e.g., Master-Apprentice)

Scenario: Your dealership struggles to manage dynamic commission structures, such as the master-apprentice relationship in the service drive. Calculating commissions for such structures involves complex calculations and multiple spreadsheets, leading to inefficiencies and errors.

Issue: The manual handling of dynamic commission structures is time-consuming and error-prone. From managing separate spreadsheets to reconciling data, each step in the process introduces the risk of inaccuracies and discrepancies, impacting employee morale and dealership performance.

Impact: Time, Accuracy

"Whether you're CEO or Sales Director, the sales compensation plan is probably the most powerful tool you have to drive sales strategy".

Mark Roberge, VP of Sales

Your Future with Nimble Compensation: With Nimble Compensation's advanced commission structure management feature, you can easily manage dynamic commission structures with ease. By automating complex calculations and consolidating data into a single platform, you ensure accuracy and efficiency in commission processing, empowering your team to optimize performance and drive dealership success.

Learn more about this feature: Advanced Commission Structure Management

No Change Tracking or History of Changes

Scenario: Your dealership lacks visibility into changes made to commission data, making it challenging to track modifications and ensure data integrity. Without a clear audit trail, you risk overlooking discrepancies and errors in commission calculations.

Issue: The absence of change tracking and history of changes hampers your dealership's ability to maintain data integrity and accountability. Without a transparent record of modifications, it's difficult to identify and rectify errors, leading to inefficiencies and compliance risks.

Impact: Accuracy

Your Future with Nimble Compensation: With Nimble Compensation's comprehensive audit trail feature, you gain visibility into changes made to commission data, ensuring data integrity and accountability. By tracking modifications and providing a clear audit trail, you empower your team to identify and rectify errors promptly, enhancing accuracy and compliance in commission processing.

Learn more about this feature: Audit Trail

Difficulty Reporting

Scenario: Your dealership struggles to generate comprehensive reports on commission effectiveness and performance due to the complexity of data and manual processes involved. Without actionable insights, it's challenging to optimize commission plans and drive dealership success.

Issue: The difficulty in reporting on commission effectiveness and performance hampers your dealership's ability to make informed decisions and drive performance. Without actionable insights, you risk missing opportunities to optimize commission plans and incentivize employee performance.

Impact: Time

Your Future with Nimble Compensation: With Nimble Compensation's robust reporting and analytics feature, you gain actionable insights into commission effectiveness and performance, enabling data-driven decision-making. By generating comprehensive reports on commission plans and performance, you empower your team to optimize incentives and drive dealership success.

Learn more about this feature: Reporting and Analytics

Management Visibility to Earnings

Scenario: Your dealership lacks visibility into employee earnings throughout the month, making it challenging to track performance and provide timely feedback. Without real-time insights, it's difficult to motivate employees and drive dealership success.

Issue: The absence of management visibility into employee earnings hampers your dealership's ability to track performance and provide timely feedback. Without real-time insights, you risk missing opportunities to motivate employees and optimize performance.

Impact: Time

Your Future with Nimble Compensation: With Nimble Compensation's real-time dashboards and reporting feature, you gain visibility into employee earnings throughout the month, enabling proactive performance management. By providing real-time insights, you empower managers to track performance and provide timely feedback, driving employee motivation and dealership success.

Learn more about this feature: Real-Time Dashboards

Managing a Large Number of Employees

Scenario: Your dealership has a large number of employees, each with their own unique commission structures and compensation plans. Managing commissions for a large workforce is challenging and time-consuming, leading to inefficiencies and errors in commission processing.

Issue: The complexity of managing commissions for a large number of employees increases the likelihood of errors and discrepancies. Without a scalable solution for managing commissions, your dealership struggles to maintain accuracy and consistency in commission processing, impacting employee morale and dealership performance.

Impact: Time, Accuracy 

Spreadsheets don't scale well. Software does.

Your Future with Nimble Compensation: With Nimble Compensation's scalable platform, you can efficiently manage commissions for a large number of employees and ensure accuracy and consistency in commission processing. By providing a centralized system for managing commissions, you streamline operations and reduce the risk of errors, driving efficiency and success across your dealership.

Learn more about this feature: Scalable Platform

No Alerts to Major Inaccuracies

Scenario: Your dealership relies on manual checks to identify inaccuracies in commission calculations, leading to delays and errors in payroll processing. Without real-time alerts, your team may overlook significant inaccuracies, leading to financial losses and compliance risks.

Issue: The absence of alerts to major inaccuracies in commission calculations hampers your dealership's ability to maintain accuracy and compliance in payroll processing. Without real-time insights into discrepancies, your team risks financial losses and reputation damage from compliance issues.

Impact: Time, Accuracy 

Your Future with Nimble Compensation: With Nimble Compensation's real-time alerts feature, you can proactively identify and address major inaccuracies in commission calculations, ensuring accuracy and compliance in payroll processing. By providing real-time insights into discrepancies, you empower your team to take timely corrective actions, minimizing financial risks and driving efficiency in commission processing.

Learn more about this feature: Real-Time Alerts

Duplicating Spreadsheets for Work Next Month

Scenario: Each month, your team duplicates spreadsheets from the previous month to calculate commissions for the current month. However, this manual process is time-consuming and error-prone, leading to inefficiencies and inconsistencies in commission processing.

Issue: The manual duplication of spreadsheets for calculating commissions increases the risk of errors and discrepancies. Without automated processes for updating spreadsheets, your team spends valuable time on repetitive tasks, impacting productivity and accuracy in commission processing.

Impact: Accuracy 

Your Future with Nimble Compensation: With Nimble Compensation's automated template feature, you can streamline the process of preparing commission calculations for each month. By providing pre-configured templates for commission calculations, you eliminate the need for manual duplication of spreadsheets, saving time and reducing the risk of errors in commission processing.

Learn more about this feature: Automated Templates

Reformatting Reports from DMS to Excel

Scenario: Your dealership faces the challenge of reformatting reports from the Dealer Management System (DMS) to Excel for commission calculations. This manual process is time-consuming and error-prone, leading to inefficiencies and delays in commission processing.

Issue: The manual reformatting of reports from DMS to Excel introduces the risk of errors and inconsistencies in commission calculations. Without automated processes for data integration, your team spends valuable time on repetitive tasks, impacting productivity and accuracy in commission processing.

Impact: Time, Accuracy 

The moment when you realize you've been using the wrong version of a spreadsheet... (you're not alone.)

Your Future with Nimble Compensation: With Nimble Compensation's seamless data integration feature, you can automate the process of importing data from DMS into Excel for commission calculations. By providing seamless integration between DMS and Nimble Compensation, you eliminate the need for manual reformatting of reports, saving time and reducing the risk of errors in commission processing.

Learn more about this feature: Seamless Data Integration

Nimble Compensation: Transforming Commission Management

Nimble Compensation was specifically designed for dealerships to tackle these challenges head-on. 

From real-time insights and automated workflows to seamless data integration and dispute resolution, Nimble Compensation provides a holistic approach to commission management. With Nimble Compensation, dealerships can optimize commission structures, enhance employee motivation, and achieve greater efficiency and success. I hope you see that we get you. We think you'll get us.

Next Step

Ready for a change?

If you're tired of wrestling with spreadsheets and want to revolutionize your commission process, schedule a discovery call with us. Let's transform your commissions from a headache into a strategic advantage for your dealership.

Friends don't let friends do commissions in spreadsheets
Share this resource
Nimble Compensation CTA screen clipping

See a better way

Ready to kick back and spend more time with family and less time with formulas?

Checkout these Related Resources