more-arw search

Q&A Forum

Paying Commission Past 60 Days

John Miller's Profile

Does anyone know of or ever heard of a commission salesperson NOT getting paid on paid invoices past 60 days?

The company got paid but doesn't want to pay the salespeople if it is paid past 60 days. Technically couldn't a company mark invoices paid 60 days or longer even if it was sooner?

If that was the case lots of salespeople wouldn't be getting paid especially since many companies usually don't pay within 30 days or longer. And if salespeople are supposed to be collectors why does the company have an accounting department?

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

What is documented about the practice?

Some commission plans will:
-hold back a % of the commission until the invoice is paid, then pay the residue
-claw back commission previously paid if the invoice becomes uncollectible

If the company in question is simply denying commission on late paid invoices, what behavior are they aiming to correct, what behavior are they aiming to encourage?

Technically they could mark an invoice as paid late even if paid sooner simply by delaying the cash application against the invoice. But that would make extra work for the AR people and it would smell like an unfair management practice. Maybe even an unfair labor practice if you could prove it - but check with a local labor law attorney in your state!

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Len makes excellent points surrounding what policy say. In my experience with commission based employee's if you don't pay them what they sold you won't retain them.

Typically sales people sell and accounting collects. I would tell the sales people to ask for a job description and the policy.

In my past job our sales associates always got paid up front, however if the company received a charge back from a sale; that charge back would flow through to the sales person, but we never held commission for lack of an AR payment.

185 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.