How to Create an HVAC Sales Commission System
- May 31, 2022
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For HVAC contractors, commissions and bonuses are essential for preserving friendly, trustworthy, and financially advantageous employer-employee relationships.
According to our observations, HVAC company owners typically employ them for two key reasons:
Influencing employee behavior by providing rewards for employees who strive towards company objectives, such as raising sales, productivity, or customer ratings, as well as raising attendance rates or work quality.
Securing and keeping top-tier service technicians with previous experience in home sales.
An HVAC owner may encourage various behaviors simultaneously by using commissions. In addition to base pay, they’ll introduce bonuses for specific sales metrics, rewards for getting customer reviews, perfect attendance records, and prizes for following best practices.
HVAC contractors may change their commission and bonus structures regularly to entice and keep top technicians with years of expertise in different situations—or even within the same business. A contractor wants to do everything possible to keep a skilled technician on their team since finding an excellent full-time tech is complex because of all the poaching between HVAC shops.
In the final section of this article, we’ll go into great detail about how an HVAC software program like ZenHVAC can assist contractors in streamlining their operations and drastically increasing efficiency, cutting down on the number of hours that employees spend on payroll each week by dozens if not hundreds.
Check out ZenHVAC in action now. Schedule a call to learn more about how our software can help you expand your business.
Difficulties of an HVAC Sales Commission System
Having a commission pay scheme that isn’t quite as effective as it could be—one that makes employees feel as though they aren’t being fairly compensated or leaves them unsure of their incentives. Naturally, none of that is ideal. However, it is quite another for an HVAC contractor to experience a loss in their company due to their commission structure.
Unluckily, sophisticated commission systems occasionally do precisely that without the precise tools needed to manage them. Due to the complexity of manually organizing and calculating commission income, there are a few ways that this frequently occurs.
Payroll calculation mistakes can become significant financial and legal difficulties over time. We’ve even seen instances where they’ve led to HVAC contractors losing clients.
Keeping track of commissions in a separate spreadsheet can help keep them somewhat organized. Still, it can also mean they must be noticed in bid calculations, leading to estimation errors. This can also end up costing a lot of money. A contractor will undoubtedly underbid and may even work at a loss if they include the commission payment(s) that they will owe their employees in connection with the task in their bid.
Of course, if this becomes a routine, it may get excruciating very quickly
How to Guide Technician Behaviour with Incentives
Whether a contractor ultimately decides to streamline their HVAC sales commission system or implement a software tool that can cleanly and accurately handle a complex incentive structure, they must prioritize what kind of performance they’re trying to encourage and comprehend what they’re trying to do genuinely motivates their employees. It should take at most two minutes to explain to employees how commissions operate.
However, instead of spreading themselves too thin to tick every possible box, we generally advise HVAC contractors to choose the two most important KPIs for them and concentrate their efforts there. Finding their target market is usually easy for business owners. The most common answers are “efficiency” and “sales,” but understandably, preferences differ.
Many HVAC contractors don’t question their workers why their performance-based pay incentives don’t have the desired effect. But based on our observations, it’s the quickest and most effective way to develop a formula that best promotes the kinds of performance HVAC contractors frequently aim to support.
Increase your HVAC Sales Commissions with HVAC Software
We’ve already collaborated with numerous HVAC contractors from all across the nation. And if there’s one thing we’ve discovered, it’s that commissions, regardless of how simple a business’ commission pay system may be, are difficult to track when it comes to bidding work and processing payroll. Therefore, it should not surprise that HVAC contractors increasingly use software programs to ease their commission-related problems.
An HVAC contractor needs a comprehensive, dynamic, utterly adaptable software solution, and painlessly automated—especially when they have more than a few personnel, each of whom has a variety of abilities and duties. The fact is that a lot of the software options available aren’t enough for the job. However, with ZenHVAC, HVAC contractors can ensure that their commissions are consistently tracked and calculated accurately and that their commission system is seamlessly integrated with their job bidding and payroll procedures.
The time HVAC shops spend on payroll is decreased by between 10 and 40 hours each week thanks to ZenHVAC, saving them a tonne of the workforce and overhead.
We’ll briefly go through some of ZenHVAC’s central commission and payroll-related benefits below:
Automated commissions that are customizable
As mentioned above, even many HVAC contractors that have moved a portion of their business administration to software tools opt to track their commissions separately. They frequently employ spreadsheets, which can be error-prone in many potentially expensive ways.
With ZenHVAC, an extraordinarily configurable and fully automated software system, HVAC contractors can seamlessly incorporate their commission monitoring and calculation into the rest of their business.
Contractors have a wide variety of options for configuring their commission computations. The illustration above demonstrates how ZenHVAC combines commission tracking with ensuring that HVAC contractors provide accurate job bids.
Before determining commission, costs like Material, Equipment, and Purchase Orders can be deducted from the total cost of a job, for example, to prevent employees from unintentionally collecting a percentage of overhead costs like that costly air conditioning system or thermostat and reducing net profit.
Management of payroll
It’s crucial to get a software program that can manage complex customization when choosing a software program to assist with HVAC commissions and payroll. However, picking someone capable of handling larger-scale operations is also a good idea.
With the help of ZenHVAC, payroll reports may be produced using the automated calculations included in the program and any external data that has been imported.
Finally, contractors can quickly export ZenHVAC gross pay information to their preferred HR, processing, and accounting vendors
Internal honesty
Employers—not just HVAC contractors—benefit from encouraging employee transparency in various ways. Retaining the best advisers (i.e., keeping them satisfied) is crucial in the HVAC sector, where competition for talented advisors is high.
It also gives technicians a crystal-clear understanding of their company’s objectives, highlighting their incentives with a strategy that keeps the entire organization as we advance—and boosting the bottom line.
Do you wish to observe ZenHVAC in action? To find out how our software can assist you in expanding your business, schedule a call with us.