SOX News

Despite SOX Financial Controls in Sales Organizations Need Assessment: Synygy-Gupton Marrs Study

(Dec 16, 2007)-- A joint study just released by Synygy, a recognized authority in sales performance management, and Gupton Marrs International, pioneer in innovative approaches to performance and risk management, finds that, Sarbanes-Oxley Act notwithstanding, companies still need to assess the financial controls in place within their sales organizations.

The cross-industry survey of twenty-six global companies finds that for most of them the segregation of duties between functions managed by sales and finance is a concern in terms of Sarbanes-Oxley Act compliance. Specifically:

* 81% of respondents say that sales compensation plan documentation is not keeping pace with changes in how compensation is being paid
* 54% are using homegrown systems and spreadsheets or manual methods to calculate sales compensation results and payments
* 65% say that strict processes are not in place or are over-ridden as far as sales making or requesting credit adjustments or data modifications without oversight by finance

“The research reflects what we are hearing in our discussions with sales executives, which is that there is increasing complexity in the management of sales compensation within large companies,” commented Mark A. Stiffler, president and CEO of Synygy. He added that “while there are internal demands for speed in problem resolution, most sales systems and internal processes cannot keep up—leading to a patch-work solution laden with hidden, full-scale risk to the accuracy of a company’s financial results.”

Stiffler also notes that sales executives, sensing the lack of integration between their sales and finance departments and the resulting splintered approach to many financially-oriented sales issues, are increasingly turning to Synygy for integrated sales operations solutions as a means of both limiting exposure to financial risks and improving the effectiveness of sales forces and sales channels.

Andrew D. de Lannoy, managing director of Gupton Marrs, notes, “Revenue recognition, sales performance, and sales compensation practices together comprise significant control risks both internal and external to an organization. The research shows that executives of large companies, perhaps even more than they perceived to be the case, need to be attentive to potential points of exposure in these areas.” de Lannoy says though that awareness of the issue is on the rise, “Executives at companies approaching Gupton Marrs not only see the need to introduce transformed control systems, they see the opportunity to use such systems to improve performance significantly as well.”

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