Page 174 - Accounting Best Practices

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8–11 Post Commission Payments on the Company Intranet
The best packages also allow for the “what if” modeling of different commission
plan scenarios, as well as the construction of customized commission plans that
are precisely tailored to a company’s needs, and can also deliver commission
results to salespeople over the Internet. The trouble with this best practice is its
cost. The software is expensive and requires consulting labor to develop a data
link between the main accounting database and the new software; thus, it is only a
cost-effective solution for those organizations with at least 100 salespeople.
Cost: Installation time:

8–11 POST COMMISSION PAYMENTS ON
THE COMPANY INTRANET
A sales staff whose pay structure is heavily skewed in favor of commission pay-
ments, rather than salaries, will probably hound the accounting staff at month-end to
see what their commission payments will be. This comes at the time of the month
when the accounting staff is trying to close the accounting books, and so increases
their workload at the worst possible time of the month. However, by creating a link-
age between the accounting database and a company’s intranet site, it is now possi-
ble to shift this information directly to the Web page where the sales staff can view it
at any time, and without involving the valuable time of the accounting staff.
There are two ways to post the commission information. One is to wait until
all commission-related calculations have been completed at month-end, and then
either manually dump the data into an HTML (HyperText Markup Language)
format for posting to a Web page or else run a batch program that does so auto-
matically. Either approach will give the sales staff a complete set of information
about their commissions. However, this approach still requires some manual
effort at month-end (even if only for a few minutes while a batch program runs).
An alternative approach is to create a direct interface between the accounting
database and the Web page, so that commissions are updated constantly, includ-
ing grand totals for each commission payment period. By using this approach,
the accounting staff has virtually no work to do in conveying information to the
sales staff. In addition, sales personnel can check their commissions at any time
of the month, and call the accounting staff with their concerns right away—this is
a great improvement, since problems can be spotted and fixed at once, rather than
waiting until the crucial month-end closing period to correct them.
No matter which method is used for posting commission information, a
password system will be needed, since this is highly personal payroll-related
information. There should be a reminder program built into the system, so that
the sales staff is forced to alter their passwords on a regular basis, thereby reduc-
ing the risk of outside access to this information.

Cost: Installation time: