This KPI establishes the average amount of Sales Commission that is paid to you sales team.
When the Sales Commissions are expressed as an average per unit or a percentage of Turnover, they are more useful to handle when comparing your performance with someone else and they can be found within the Variable Expenses of your management accounts.
The values of Sales Commission vary considerably across the country because they are dependent upon salary structures and incentive schemes. However, you will find it useful to measure the trend within your own business in order to keep them under control.
Example:
A) Sales Commissions = R68,208 B) Department Turnover = R7,432,165 C) Vehicles Sold = 784 D) Sales Commission p/unit = R87 (A ÷ C) E) Sales Commission % = 0.9% (A ÷ B X 100)
Discussion:
As an alternative measurement, some reports illustrate Sales Commissions as a percentage of Gross Profit as opposed to Turnover and some reports separate the amounts paid for new and used vehicles.