In today’s world, every sales personnel is driven by incentives. For a company, managing such incentives and sales commissions for all professionals is a time-consuming task. This problem can be efficiently solved by NetSuite Incentive Management, which serves as a one-stop solution to manage complex multi-tiered commission plans. It is a tool that helps businesses create, check, and pay sales commissions systematically. It includes various levels and criteria such as sales targets, number of items sold, types of products, and special bonuses. With NetSuite, sales teams can view their commission details through automated reports, ensuring the incentives and determination to achieve business goals.
What is Incentive Management, and Why is it Crucial for Businesses?
Incentive management is a plan of action where managers check employee performance, analyse metrics, and reward staff based on their goals and achievements. Incorporating a systemised management of incentives will motivate the employees to work harder towards sales targets. Here’s why a good incentive management tool is critical for business:
1. Commitment: A happy and rewarded employee is always more committed to the organisation—proper management of rewards and incentives results in increased employee commitment.
2. Retaining Talent: A good incentive management system ensures that the personnel is adequately rewarded for their contributions, it helps in retaining talent which proves beneficial to the organisation in the long run.
3. Enhanced efficiency: Increased efficiency on the part of employees reflects in the performance of the organisation. Incentive management ensures that the employees are satisfied.
4. Aligning goals: Incentive management systems help align the goals of the organisation to those of the employees, each employee is driven to work harder in order to receive their incentives.
Make the Right Choice with NetSuite Incentive Management Software
NetSuite Incentive Management is a one-stop solution that allows firms to generate, track, and pay sales commissions. It simplifies the process of creating commission plans with multiple criteria such as sales targets, amount of goods sold, product kinds, and special bonuses. Here are the standout features of NetSuite Incentive Management:
1. Centralised Management
It makes the management of commission programs easy by offering a unified interface. It acts as a one-stop solution for all issues concerning commission payments and plans.
- Various levels of management, such as executives, sales managers, and finance managers, can play a role in managing the commission schedules on a single interface. It provides flexible measures in ascertaining the commission payable.
- Quotas may be set at monthly, quarterly, or annual levels. One may set monitors such as total sales or quantities sold against the product/service, measure the profitability of the product, and even define criteria based on requirements.
2. Sophisticated Rules
It supports complicated commission structures relating to different incentives for individuals on the basis of their performance. These may include the linear scale, where payment is made according to the total order value. Otherwise, it may follow the marginal scale, which divides parts of the total order value into various steps using a target factor scale.
- It easily calculates and ascertains indirect commission payments due to managers and executives from the top to the ground level.
- It allows the process of setting up schedules that apply to the sales personnel and their managers. If the orders completed by the sales personnel are qualified, their incentive is reflected in their manager or other organisational hierarchy as followed by the organisation.
- Split commissions are also available, where a single commission payment can be split between different individuals/parties.
3. Approval Processes
Commission approval processes may be flexible and customisable and may be initiated when a sales order is approved, or an invoice is cleared. There is a provision for manual overrides during the commission approval process.
- The users can specify that certain payments require the approval of departments like accounting and inventory management or specific individuals like the sales manager. As soon as the compensation gets approved, payment can be made in NetSuite through accounts payable or automatic integrated payroll processing.
- There is a convenient policy for overpayment and underpayment, where all additional debits and credits are resolved in the next cycle.
4. Comprehensive Reporting
It provides accurate statistics on given activities through comprehensive reports and dashboards. Information such as sales trends, performance to quota, and specific compensation statistics are easily accessible to support sound decision-making.
Read More: NetSuite Reporting Capabilities
5. Partner Commissions
The functionality of NetSuite Incentive Management includes partner commission calculation and reporting. Workers and partners alike are able to receive payment at the same sales transaction:
- Partner commissions can be determined using unique criteria for more flexibility, or they can be determined using the same parameters that apply to workers, such as commissions on sales, volumes, profitability, and more.
6. Forecasting and Analytics
It assists sales professionals in predicting how much they are going to earn today in the next month or coming months.
- Give salespeople access to commission reports with summary details linked to their sales dashboard and sales force automation (SFA) activities, as well as the ability to estimate their profits.
- Make channel compensation administration easier by letting partners view their sales commissions online in the Partner Center.
- Using role-based, real-time dashboards and reporting, make sure that sales, sales operations, and finance can keep an eye on sales trends, quota performance, achievement distributions, and summary and detailed remuneration.
Benefits of NetSuite Incentive Management
Here are the benefits of NetSuite Incentive Management:
1. Automated Commission Calculation: The system figures out commissions on its own. It uses schedules linked to sales orders or invoices. This cuts down on manual work and reduces the possibility of errors.
2. Flexibility in Commission Plans: You can build complex commission plans with multiple schedules and rules. This gives you room to shape and roll out commission plans according to the requirements of your organisation.
3. Easy Design and Tracking: The system helps you craft, check, and run sales commission plans. It handles tricky multi-level structures and deals with payment based on specific criteria.
4. Customizable Commission Rules: You can adjust commission rules to fit your needs. You might base them on when the sale happened, what was sold, which part of the company made the sale, how much was sold in total, or how much profit each order made. This makes sure commissions match your business needs.
5. Flexible Commission Calculation Methods: You can choose diverse ways to determine commissions. These may include linear scale, marginal scale, target factor, or no scale at all. This allows companies to match their commission setup to various sales targets.
6. Management of Indirect Commissions: The system easily calculates indirect commissions based on the team’s performance and integrates incentives.
7. Split Commission Capabilities: The system divides commissions among multiple people involved in a single sales deal, ensuring everyone receives a fair commission.
8. Comprehensive Reporting and Analytics: NetSuite Incentive Management has an efficient reporting mechanism with thorough data analytics that covers sales, ops, and finance. Salespersons can get an insight into their performance and the performance of their organisation. Such analytics play a crucial role in future planning.
How to Set Up NetSuite Incentive Management
Here the steps to start using NetSuite incentive management (Compensation module) follow these steps:
1. Enable the Feature:
- On the menu bar, go to Setup > Company > Setup Tasks > Enable Features (Administrator).
- This feature is found under the Employee subtab; find the Employee Commissions feature and turn it on.
2. Configure Commissions Preferences:
- Logging in to the system as an Administrator, navigate to Setup > Sales > Sales Management > Commissions.
- This choice is here to set the preferences for how and when commissions should be paid to the employees.
- These settings apply to any commission scheme that you may have set up in your NetSuite account.
3. Create Employee Commission Schedules:
- Access Forecast > Commissions > Employee Schedules > New (Sales Manager). Employ commission schedules describing how the commissions are to be computed.
- These rules can be compiled on a total sales basis, percentage of the quota achieved, the number of articles sold, total revenue or gross profit/ margin.
4. Create and Assign Commission Plans:
- Navigate to Forecast, then Commissions, and then to Employee Plans, where you will find the new choice that has a Sales Manager assigned to it.
- Schedules are also divided into commission plans in which you set your agents. Commission plans can come with many schedules, and there can be several sales reps in one plan.
Conclusion
With NetSuite Incentive Management, organisations can avoid the hassle of complex incentive payment calculations. It ensures that commission procedures are well dealt with through central control, measures, and rules and are backed by sufficient statistics. It improves timely performance, increases employee motivation, contributes to collaboration, and promotes sustainable development. Keeping in mind the modern requirements, NetSuite Incentive Management serves as an effective tool for employers by allowing them to manage their incentive payments systematically and efficiently while ensuring employees’ satisfaction.
