Impressive Productivity Gains with LWT Enterprise Commissions Software

streamline your commission processing with LWT Enterprise Commissions

Commission processing is often viewed as a black art – or a black hole. It doesn’t need to be. It’s at the heart of the industry but is often peripheral to conversations about system and process capabilities and improvements. Is it a case of out of mind, out of sight, or is it placed in the “too hard” basket? There are some key features that are considered “standard”.

Conduct a quick environmental analysis: what are your customers telling you? What are your competitors doing?

Key Requirements

You’ll need to be able to process commissions efficiently and accurately.

Fully scalable processes will allow you to grow both your sales channels and your sales volume. Business models, channel networks and payment structures need to be fully configurable. Your systems and processes should support flexible remuneration models which provide a real point of difference for your recipients. You should be able to deploy new models immediately, rather then requiring months of development.

You also need to be able to stay in control of your processes, through user permissions and clear separation of duties.

Calculating Your Commission Productivity Ratio

To get a feel for how healthy your commission payment processes are, you can calculate your Commission Productivity Ratio (CPR). Simply divide the number of transactions processed by the number of staff hours it took to process them.

Look at this information historically, and as staffing levels change and/or transactional volumes change. Does your CPR decrease as your volumes grow? If so, then your process may not be efficient. You can then take this one step further: by looking at your staff costs you can quantify the bottom line impact on any improvements you make in terms of measurable cost savings

We have calculated CPR’s for a number of our clients. While the CPR is more useful as an internal benchmark, it is interesting to see what can be achieved. Here’s an example:

We implemented a new commission system for a well-known aggregator. Their Commission Productivity Ratio was 21.0 initially. On implementing the new commissions system, the CPR improved to 56.1. As transactional volumes and sales channels grew over time, the CPR continued to increase to 171.3. This represents an immediate productivity gain of 167%, with a 714% productivity increase over time. The aggregator experienced both an increase in transactional volume and a decrease in processing staff hours.

Benchmarking

While the overall CPR gives you a broad-brush indication of the health of your commission payment process, you can then work to generate benchmarks for each individual process; for example data import and validation, processing calculations, generating and distributing commission statements, making payments. These individual processes can then be further analysed and refined. Focussing on the root causes of manual payments and adjustments will also show process failures and suggest areas for improvement which will have a direct impact on recipient satisfaction.

These refinements will in turn improve your overall CPR and reduce processing costs over time.

For more information, email cpr@loanworks.com.au

Overview | Key Features | Is This You? | Productivity | Track Record