Excess salary and overtime
Time paid for work done twice or by the wrong person: visible in payroll, never labelled.
Finance
The commercial cost the P&L never shows.
Go-to-market efficiency is read from S&M spend and CAC payback, rarely from the time and revenue lost along the way. The largest costs are the ones no budget line was built to record.
From the seat
Each line has a business case. The way the team works has none.
In a company like this, the CFO signs next year's commercial budget in November: more sellers, a new tool, a higher marketing line. Each item has a business case. What none of them has is the cost of the way the team already works: the quarter a new seller spends below quota, the deals rebuilt at the handover, the discount given in the last week because a promise was not kept. Those costs are real, and they sit inside salaries and lost revenue, so they never appear as a line.
The budget can be right and the return still fall short, because what is spent is not where the money goes. The leak is the cost the accounts were never designed to show.
The levers
On five lines, finance signs the spend and never sees the loss.
Each has a figure finance approves and a second figure it never meets. The second is paid in people's time and in revenue that did not arrive.
- 01
CAC payback and the magic number
The plainest test of the commercial organisation is what a euro of sales and marketing returns in new recurring revenue: the magic number, and the months of CAC payback behind it, read by cohort and by channel. Where the ratio worsens while the budget grows, the money is going into the way the team works, not into the market. A budget that passes line by line can still fail this test as a whole.
What we check: sales and marketing spend against new recurring revenue, quarter by quarter, and which lines moved the ratio.
- 02
Realised price and discount leakage
List price is a policy; realised price is what the sellers did with it, and in professional services what the partners did with the day rate. The gap between the two is discount leakage: a discount budget nobody approved, spent in the last week of each quarter to make a number. Governance means a rule for who may discount how much, and a record of why.
What we check: realised against list by seller, segment and week of the quarter, and the approvals behind the largest gaps.
- 03
Forecast variance and its causes
A forecast that misses by a known amount for a known reason is a tool; a variance that changes size and reason each quarter is a risk the balance sheet does not carry. Finance reads the miss. It rarely reads what produced it, because the cause sits in stage definitions and in the manager's week, outside its records.
What we check: forecast against actual over eight quarters, the reason given each time, and whether it was the same deals slipping.
- 04
Compensation against margin
A compensation plan tells the sales team what the company wants; where it pays on bookings, it gets bookings, discounted and sometimes never collected. Commission paid out on deals that leave in year one or never reach gross margin is spend the plan rewarded, and the unit economics never recover it. Finance signs the plan in December and meets its cost a year later.
What we check: commission paid against the gross margin and first-year retention of the deals it was paid on.
- 05
The cost no line records
No account was built to record what a quarter of ramp, a reopened deal or an unowned renewal costs, so the largest cost in the commercial budget has no line and no owner. The Diagnosis prices it from interviews and from your records, per head and per year. Priced, it becomes a line the budget can act on.
What we check: the records finance already holds that let the hidden cost be priced per head: cost rates, headcount and turnover by team.
What it costs
Four costs, and the accounts carry two.
Two sit in payroll and spend, paid every month and never labelled. Two are what did not happen, and those are usually the larger part.
Spend that bought nothing
Tools, travel and discounts that did not produce what they were approved for.
Revenue not won or not kept
Bookings that did not land and renewals that did not hold, because of how the work was organised.
Markets not opened, and risks taken
Segments never entered, and decisions taken on numbers nobody trusted. Both are paid for later, and neither is budgeted.
The evidence
What growth costs, and what goes uncounted.
Four published figures, sourced and dated, from the market and from the research the method stands on. Yours is built from your own cost rates and headcount.
- 01
$2.00
Of sales and marketing spend per $1 of new-logo ARR at the median; $2.82 in the bottom quartile.
Benchmarkit, 2025 B2B SaaS Performance Metrics Benchmarks, p. 17, N=73
- 02
4 in 5
Sales and finance leaders who have missed a quarterly forecast: "4 in 5 sales and finance leaders say they have missed a quarterly sales forecast", over half of them two or more times.
Xactly, 2024 Sales Forecasting Benchmark Report, 405 North American sales and finance leaders, vendor survey, 10 July 2024
- 03
About 16 months
CAC payback for top-quartile software companies, which has "plateaued at ~16 months", against about 12 months before 2020. That is the best quartile; the median waits longer to earn back what it spent.
ICONIQ, State of Software 2025, operating data from 127 software companies (n=21 for 2025), p. 23, September 2025
- 04
EUR 20,000 to 70,000
Of hidden costs per person per year, depending on the type of company, across the organisations where ISEOR's method has been applied: more than 1,854 companies in 42 countries.
ISEOR, foreword to Innovation commerciale: tous vendeurs dans les organisations, EMS, 2017, p. 23
As the company grows
The line the cost hides in moves as the company grows.
The hidden cost is small and visible at the start, large and invisible later. What changes by stage is which line it hides in.
Where to start
The Diagnosis prices what the accounts leave out.
Diagnosis
€15,000 flat · two months from the day we get access
The five lines above, read from interviews with the commercial teams the budget pays for and from the records finance already holds: cost rates, headcount, pipeline, realised price. At the end you hold the hidden cost of the commercial organisation in your own numbers, and the order in which to recover it. Operation follows if you want the fixes made: €50,000 more within 30 days of the Diagnosis briefing, €65,000 if the two are booked together.
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FAQ
Before you approve the next commercial budget.
How is a hidden cost different from waste?
Waste is spend you can see and cut. A hidden cost sits inside salaries, time and revenue that did not arrive, so it never appears as a line. The Diagnosis gives it a figure.
What do you need from finance?
Cost rates, headcount and revenue by team are enough to price what the interviews and records show. Nothing leaves your control, and the list is agreed before the work starts.
Is this a cost-cutting exercise?
No. Hidden costs are converted, not cut: the time and money go back into work that produces revenue, which is what moves CAC payback and the magic number.
How is the figure checked?
Every cost is built from your own records and rates, and the people who did the work validate what was found before the figure reaches the board pack.
Get started
Start with one budget line you already doubt.
Choose one line of the commercial budget: what it buys, what it loses and which records would show it. If the line holds, you keep it, with the reason written down.