When the Accounting Standards Codification (ASC) 606 standard was introduced by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), it upended how financial departments track and account for commissions. Without an established tracking system for commission expense accounting, most finance teams turned to the simplest method: spreadsheets.
But today, these "simple" ASC 606 spreadsheets are anything but. Finance teams are buried in a web of error-prone manual processes, confusing formulas, and version control nightmares. And when auditors come knocking or business scales rapidly, spreadsheet-based revenue recognition system becomes more than just a headache—it becomes a liability.
For organizations still managing commission expenses manually, the process is often fragmented and time-consuming. Teams scramble to gather data from various sources, verify the numbers, make corrections, and update the reports. Every change—like an employee leaving the company or a customer churning—requires a manual update. Not only is this tedious, but it also increases the risk of non-compliance with ASC 606.
The bottom line is that manual accounting processes are tedious, time-consuming, and entirely unnecessary in 2025. It's the equivalent of using a paper filing system instead of a computer.
Moreover, as companies expand, the challenges related to accurate accounting compound. The more diverse and complex your business becomes, the less manageable manual ASC 606 compliance becomes. In other words, spreadsheets aren't scalable. They're a short-term fix in a world that now demands long-term precision.
Commission expense tracking can be quicker, more accurate, and less time-consuming with automation tools. Instead of incurring hundreds of hours of overhead for headache-inducing manual spreadsheet manipulation, novel ASC 606 compliance automation can streamline the process.
The transition from manual to automated commission expense accounting isn't just about technology—it's about transforming your financial treatment process into something repeatable, auditable, and efficient. Tools like Xactly's CEA (Commission Expense Accounting) are specifically designed for this purpose.
Xactly CEA automates the commission expense accounting process with the following features:
When it comes to automated solutions designed for ASC 606 compliance tracking, the most important question for the majority of finance leaders is: what are the benefits? If you are buried in your spreadsheets, trying to keep up with ASC 606 revenue standards, the benefits are likely obvious. However, those in leadership often need a clearer picture of the returns they will get from investing in a new software solution.
Let's take a closer look at the benefits of automated ASC 606 commission expense compliance tracking.
Manual spreadsheets are not only time-consuming—they're a liability. One formula error on your financial statement or a forgotten update to revenue from contracts can throw off your entire amortization schedule. Xactly CEA eliminates the need for manual manipulation by automating key accounting processes, like updates to revenue from contracts with customers, drastically reducing the chance of ASC 606 commission expense accounting errors while saving your team hours every month.
Time is money. CEA users reported saving 2–3 days a month on journal entries alone, and validating commission expense data and running reports is up to 83% faster. That's more time your finance decision makers can spend on strategic questions, revenue stream forecasting, sales incentives, and decision-making—rather than crunching numbers, reconciling reports, and managing ASC 606 financial treatment methods.
Contract costs and revenue streams aren't static—employees churn, deals get restructured, transaction prices change, and timelines shift. With Xactly CEA's dynamic true-up engine, you don't have to manually chase these changes and use time-consuming input methods to track them in siloed systems of information. The system automatically updates commission expense recognition when key variables change, ensuring your books remain accurate without requiring constant intervention.
With CEA, finance teams can finally see the full picture. You get pre-built dashboards and reports that trace every commission dollar from capitalization to amortization, simplifying revenue standard management. Do you need to know what was amortized or capitalized from customer contracts last quarter? Want to compare full vs. modified retrospective accounting models? It's all at your fingertips.
CEA doesn't require ripping and replacing your current systems. Its internal controls integrate seamlessly with your CRM (such as Salesforce), HRIS, CLM, CPQ, and downstream accounting platforms. Regardless of whether you manage one ledger or multiple books across regions, CEA works in sync with your infrastructure.
Whether your auditors prefer the full or modified retrospective approach to ASC 606 revenue standard compliance, Xactly CEA can handle both. This flexibility enables your accounting team to select the financial treatment methods that best align with your company's business model and reporting objectives—without requiring system reconfiguration.
Auditors want details. With CEA, you can provide robust audit evidence, including supporting schedules, roll-forward summaries, and trails of reported information with just a few clicks. Revenue standards, contract assets, and transaction prices, among other critical audit data analytics, are centralized, consistent, and traceable—making preparation less stressful and managing disclosure requirements more efficient.
As your business grows, commission plans often get more complex, which can increase contract liabilities. Different products, transaction prices, sales teams, geographies, and variable considerations result in more rules and increased reporting. CEA is built to scale—whether you're managing 10 sales reps or 1,000—so you don't hit a wall just as your growth picks up speed.
Automating ASC 606 compliance isn't just a check-the-box task. It's a strategic shift that saves time, reduces risk, and gives finance teams space to focus on higher-value work.
If your team is still struggling to keep up with compliance using spreadsheets, it might be time to explore what automation can offer. Whether you're just starting or already aware of the benefits, there's a clear path forward and plenty of reasons to take it.
If you are interested in learning what Xactly CEA would look like at your organization, reach out for a free consultation with our expert solution implementation team. In the meantime, learn more about Xactly’s other applications with this guide to the Commission Earnings Forecasting (CEF) tool here: