Top 5 Reasons Cited for Capping Sales Commissions
By Heather Peterson
At its root, commissions serve as a motivational tool to drive sales performance. These “carrots” are the foundation for an incentive system to evaluate a sales representative’s productivity. Sales reps that reach or exceed the goals are rewarded while sales reps that do not meet goals provide a business with insight into performance, projection, people or product issues. Continue reading
by Claudia Bruemmer, Guest Blogger
Tax time is coming up, and we can’t overemphasize the importance of companies big and small being able to accurately report income and expenses to the IRS. Sales Commissions are one area where IRS reporting may be overlooked and invite audits of your sales staff as well as your firm.
Just out of curiosity, how many of you reading this have the means to track and pay sales commissions? Perhaps many of you do, and that’s great ammunition to have on hand if it ever comes to a tax audit. Heaven forbid you should ever be audited – but better safe than sorry. Continue reading
Some companies are faced with the question of whether a 100% commission plan is the best commission plan design for them. There is clear benefit of tying the costs completely to sales and reducing risk to the company. But they wonder if it will attract quality sales people to their firm. Will it allow the sales people to focus on the right deals that may take longer to come to fruition versus focussing on the short term deals? Will it mean a rush to close deals with poor terms or by discounting excessively? Continue reading
Calculating commissions using quota may be a difficult method given the current economy. Depending on the industry your company is in, the economy may be playing havoc with your ability to predict future sales and determine quotas for your sales people. Continue reading
Sales commission plans normally don’t have many rules and regulations. But in certain industries there may be some that you have to watch for and make sure you are not breaking them. Continue reading
It’s March and we’re coming up to the end of the first quarter of 2009. Is your Sales Compensation Plan for 2009 in place? It’s surprising how many well-run, best of breed companies fail to put their sales commission plan in place in a timely fashion or fail to properly communicate how their sales people will be compensated. Continue reading
This week we were talking to a customer who was looking for commissions software to automate their commissions. The customer’s current plans were very simple: they pay a flat commission rate to their sales reps on a monthly basis on any sales, that was invoiced to the customer.
But now they want to move to a commission plan, where the commission will be paid when the customer actually pays the company for the invoice. Actually, they wanted to pay a portion of the commission when the invoice is generated and a remaining portion when the payment is received from the customer. Continue reading