Companies Prepare For New Wave of Pay-Tracking Software

A new generation of software that uses pay-tracking technology and incentive-payment applications promises to help management find mistakes that often escape audits and other means of error detection.

Mistakes in bonuses and commissions can add up quickly. For example, there have been media reports that as much as $4 million in phony sales commission was pocketed by more than a dozen employees at WorldCom before the company was forced into bankruptcy.

Technology companies that plan to market pay-tracking technology include Advanced Information Management, Callidus Software, Centiv, Kadiri, Motiva and Synygy, as well as Oracle, SAP, Siebel, and PeopleSoft.

ZDNet describes how the software works as follows:

  • Companies purchase the software and customize it to reflect their internal rules and the structure of their commission and bonus programs.
  • The software grabs sales and other performance data from a company's ordering system or HR system and calculates the commission.
  • The payment data is fed into the company's payroll system. Along the way, the software generates reports for managers that can also be used in audits to catch errors and cheats.

In addition to catching mistakes, the applications can be used for planning purposes, so management can understand the financial effects of new incentive-pay rules before instituting them. The software also helps deter shadow accounting by sending frequent updates to employees via the Web or e-mail, so the employees don't have to spend hours calculating and tracking commissions on their own because they don't trust their company to get it right.

A key risk of adopting the software is that it can be a challenge to set up, leading at least one company to give up after six months of trying to make the system work.

-Rosemary Schlank

You may like these other stories...

Cybersecurity is no longer the domain of an organization's IT staff. It's moved to the boardroom, and in a big way. Accountants and financial managers may have been thinking it's just the province of the tech...
You probably don't want to think about how many times you access the File menu in Excel 2010 or 2013. Personally I think Excel 2010 has the best possible File menu arrangement, other than having Print Preview grafted...
Following other recent high-profile hacking events, investigators discovered yesterday that hackers broke into the draft work paper files of several famous CPA firms. Revealing images of the scantily clad documents have been...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.