Commission Automation ROI: How Much Are Spreadsheets Costing You?

Running commissions in Excel feels "free." You already have the software, and your team is already on payroll.

But manual commissions levy a heavy tax on your business in three specific ways: Administrative Bloat, Error Rates, and Opportunity Cost.

To help you quantify this, we built the Siplify ROI Calculator.

In this guide, we'll walk through exactly how to use the calculator to model your own potential savings.

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1. Calculating "Administrative Efficiency"

The first section of the calculator asks for your Team Size and Hourly Rates.

Your Inputs:

• Number of Sales Reps: (e.g., 25 payees)
• Monthly Admin Hours: (Our benchmark suggests ~40 hours for every 50 payees).
• Admin Hourly Rate: (Fully loaded cost of Finance/Ops staff, e.g., $50/hr).

The Math:

Industry research shows automation reduces admin time by 80%.

• Formula: (Monthly Hours × 80%) × Hourly Rate × 12 Months
• Example: Saving 32 hours/month at $50/hr = $19,200/year in pure labor savings.

2. Calculating "Commission Accuracy" (The Big Number)

This is the number that usually shocks finance leaders. Manual spreadsheets have an industry-average error rate of 5%. Automation brings that down to 0.5%.

That 4.5% delta is cash leaking out of your business in overpayments.

Your Inputs:

• Average OTE per Rep: (e.g., $150,000)
• Variable Comp %: (Usually 50% of OTE)

The Math:

• Formula: Total Variable Comp × 4.5% Error Reduction
• Example: For 25 reps at $150k OTE, you are paying out ~$1.875M in commissions. A 4.5% savings is $84,375/year straight to the bottom line.

3. Calculating "Recovered Selling Time"

It's not just Finance's time; it's Sales' time. Forrester Research estimates reps spend 2 hours per month "shadow accounting"—checking your math instead of selling.

The Math:

• Formula: (Reps × 2 Hours) × (Rep Hourly Rate) × 12 Months
• Example: For 25 reps earning $78/hr (based on OTE), recovering those 50 hours a month is worth $46,875/year in productivity.

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The "CFO-Ready" Output

When you combine these three numbers, the total cost of the status quo is often >$150,000 per year for a mid-sized team.

The calculator doesn't just give you a number; it generates a 4-Page CFO-Ready PDF Report.

1. Executive Summary: The big headline savings number.
2. Detailed Breakdown: Each category with the exact calculation formula.
3. Benchmarks: Sources for the 5% error rate, 80% time savings, etc.
4. Business Case: A pre-written justification for investment.

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Frequently Asked Questions (FAQ)

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Related Reading

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