If you’re the person everyone’s looking at to nail down next quarter’s sales comp expenses, you know how quickly “just plug in the numbers” turns into a headache. Sales compensation is tricky: plans change, quotas shift, and payouts aren’t as straightforward as you’d like. If your company uses Varicent to manage comp plans, it can make forecasting a lot easier—but only if you know where to look and what to ignore.
This guide is for finance, sales ops, or comp admins who want a straight answer: how do you actually use Varicent to forecast sales comp expenses, and not just hope for the best?
Step 1: Get Your Current Comp Data into Shape
Before you even open Varicent, check your source data. Garbage in, garbage out. If your territory mapping is outdated or your plan assignments are wrong, no tool can fix that for you. Here’s what matters most:
- Accurate roster: Make sure your rep list is up to date. People come and go; your model needs to reflect that.
- Plan assignments: Double-check that each rep is actually on the right comp plan in Varicent.
- Crediting rules: Confirm how deals are credited—no one wants to explain double-paying on a deal because of a messy rule.
Pro tip: Don’t waste time cleaning up every old field. Focus on what actually drives payouts: quotas, rates, accelerators, and eligibility.
Step 2: Understand What You’re Forecasting—And Why
Not all “forecasting” is the same. Are you trying to:
- Budget for total comp payouts next quarter?
- Model the impact of changing quotas or plan design?
- Predict overages or risk of blowout payouts?
Be honest about what you need. Some users get stuck running every Varicent report just because they can. Save yourself the trouble. Decide which question you need to answer, and build for that.
Step 3: Pull Your Historical Performance Data
Varicent stores actual payout and attainment history. This is your foundation. To get a baseline forecast, you’ll want:
- Attainment data: How did reps perform vs. quota by period?
- Payout data: What did those results pay out, by plan?
- Historical anomalies: Did anything weird happen last year (e.g., a massive deal, territory shift)? Flag it.
You can pull these as standard Varicent reports—usually called “Attainment by Rep” or “Compensation Summary.” Export to Excel if you need to slice and dice.
What to ignore: Don’t get lost in the weeds with every plan component. Focus on the main drivers—base, variable, kicker plans. Unless your org is truly bizarre, the edge cases won’t move the needle much.
Step 4: Build or Import Your Forecast Scenarios
Here’s where Varicent starts to pay off—if you set it up right. There are two common ways to model forecasts:
4a. Use Varicent’s Built-in Modeling
Varicent has a “Modeling” or “Scenario Planning” module (sometimes called What-If Analysis). Here’s how to use it without losing your mind:
- Duplicate your current plan: Don’t mess with live data.
- Adjust your variables: Tweak quotas, rates, or headcount as needed. You can model rep-by-rep or in bulk.
- Upload forecasted attainment: If you have a sales forecast, import it. Otherwise, use historical averages or a modest growth assumption.
- Run the scenario: Let Varicent calculate payouts as if those numbers happened.
4b. Export Data and Model in Excel
Honestly, if you’re only doing a single forecast or want more control, exporting to Excel can be faster. Varicent is great at storing data, but Excel is better for “what if I tweak this?” questions.
- Export plan details, rep lists, and payout formulas.
- Use your own logic to apply forecasted sales to each plan.
- Sum up projected payouts by team, role, or whatever you need.
When to choose which: If you need to repeat forecasts often or share them with execs, stick with Varicent’s built-in tools for auditability. If it’s a one-off or your scenario is weirdly custom, Excel is your friend.
Step 5: Sense-Check the Output
Don’t trust the numbers just because they look official. Here’s what to check:
- Are total payouts in the ballpark of last year? If your forecast is double or half of last year for no good reason, something’s off.
- Any reps showing crazy payouts? Look for outliers—often a sign of a broken quota or plan assignment.
- Do the numbers align with headcount plans? If you’re forecasting for 50 reps but have 60 on the roster, fix it now.
Ask a colleague to sanity-check your numbers. Fresh eyes spot mistakes fast.
Step 6: Present the Forecast—Clearly
No one cares about the technical magic behind your numbers. Execs want clear, actionable summaries:
- Show totals by month/quarter and by major team or segment
- Highlight assumptions: “This assumes 5% quota growth, 2 new hires, and no plan changes.”
- Flag risks: “If attainment exceeds 120%, total payouts could spike 15%.”
Skip the 12-tab spreadsheet unless someone asks. Summarize the key numbers and keep backup detail handy.
Step 7: Keep a Simple Audit Trail
Varicent is good for auditability, but only if you’re disciplined. Save each scenario with a clear name (“Q3 2024 Forecast with +2 AE Hires” beats “Scenario 7”). Attach or save a brief summary of your assumptions and any manual tweaks.
What to skip: Don’t bother with fancy dashboarding unless people actually use it. Most execs just want the headline numbers.
What Actually Works (and What Doesn’t)
What works:
- Using Varicent’s modeling tools for repeatable, “official” forecasts.
- Exporting to Excel for custom, one-off scenarios.
- Starting from real historical data, not made-up numbers.
- Clear documentation of your assumptions.
What doesn’t:
- Trusting the system to be up to date—always verify your input data.
- Getting bogged down in every comp exception or tiny plan tweak.
- Overdesigning dashboards no one reads.
Final Thoughts: Start Simple, Iterate Often
Forecasting sales comp expenses is half math, half educated guess. Tools like Varicent can help, but only if your data and process are solid. Start simple: get your roster right, use realistic assumptions, and double-check the results. Iterate each quarter as you learn what works (and what bites you).
You’ll never forecast sales comp expenses perfectly—but with a good process, you’ll be less wrong each time. And that’s usually enough to keep finance happy.