Why Commission Calculations Are Especially Hard in the Building Materials Industry

Unlike software or services, building materials companies sell physical products tied to real-world delivery, installation, and returns. That reality creates commission challenges that finance teams often end up managing manually, even at significant scale.

If you’ve ever said “we export from the ERP and then clean it up in Excel,” this will feel familiar.

1. Commissions Are Tied to Orders — Not Clean Transactions

In building materials, commissions are usually earned per order, job, or unit sold, not on abstract revenue numbers.

But orders aren’t static:

They get partially shipped

They’re split across multiple delivery dates

They’re adjusted mid-job

They’re sometimes canceled or returned after the fact

For finance teams, that means commission eligibility often depends on operational reality, not just booked revenue.

When calculations rely on static snapshots, errors creep in quickly.

2. Returns and Credits Complicate Everything

Returns are not edge cases in building materials — they’re normal.

Materials get over-ordered, damaged, or returned after job changes. Credits may show up weeks after the original sale, often after commissions have already been paid.

This creates tough questions:

Should commissions be clawed back?

Should credits reduce future payouts?

How do you explain adjustments clearly to reps?

Many teams handle this manually, tracking adjustments in spreadsheets and reconciling them month over month — a process that’s time-consuming and error-prone.

3. Partial Shipments and Install-Based Sales Create Gray Areas

In many building materials organizations, commission eligibility depends on:

Shipment completion

Installation milestones

Job completion status

That means:

One order may generate multiple commission events

Finance must decide when something “counts”

Sales and finance may interpret rules differently

Without a system that tracks commissions at the line-item or order level, finance teams are often forced to make judgment calls — which can lead to disputes.

4. Commission Logic Often Lives Outside the ERP

Most mid-to-large building materials companies already have an ERP system.

But commission logic usually lives somewhere else:

Excel spreadsheets

Custom macros

Email-based approvals

Tribal knowledge held by one or two people

This creates risk:

Knowledge gaps when someone is out

Inconsistent calculations

Limited audit trails

Stressful payroll cycles

Finance teams become the last line of defense — catching issues manually before payroll runs.

5. Sales Reps Want Answers, Not Just Numbers

When commissions are complex, reps don’t just ask “what did I get paid?”
They ask “how did you calculate this?”

Without a clear breakdown:

Disputes increase

Trust erodes

Finance spends time explaining instead of closing the books

Clear, order-level explanations reduce friction on both sides — but they’re hard to provide when calculations are stitched together manually.

What Finance Teams Are Moving Toward

We’re seeing building materials finance teams modernize commission processes in a few consistent ways:

Calculating commissions per order or unit, not just monthly totals

Automatically adjusting payouts for returns, credits, and changes

Keeping commission logic centralized and documented

Providing clear, auditable explanations for every payout

The goal isn’t sophistication for its own sake — it’s accuracy, predictability, and control.

Making Commissions a Finance-Controlled Process Again

For many building materials companies, commissions have quietly become one of the most manual parts of the monthly close.

Modern tools like EasyComp are designed specifically for this reality:

Built around order-level data

Flexible enough to handle returns and partials

Designed so finance — not spreadsheets — controls the rules

Clear enough that reps can self-serve answers

The result?
Fewer surprises, fewer disputes, and a calmer payroll cycle.

Want to learn more? https://www.easycomp.ai/request-a-demo

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By Jose Fernandez
https://www.linkedin.com/in/joseluisfernandez/

About The author
‍Jose Fernandez is part of the team behind EasyComp.ai, building infrastructure that helps companies run sales compensation without spreadsheets, confusion, or delays. He believes incentive systems should be easy to operate—and crystal clear to the people who earn them.

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