Compensation arguments between sales people and their staffing firms can be harmful to both parties involved. They can cause the loss of excellent production sales reps. Also, can cause fiscal losses. To avoid legal actions it’s essential to have a very strong agreement, great records, transparency in dealings, and very clear communication.
1. Illustrate the compensation accurately – Sales commission calculations can be hard to comprehend and bewildering. To avoid confusion, the best way would be to show a typical instance with each calculation. Your sales compensation process should be very very clear.
2. Keep it simplistic. Your calculations needs to be able to be explained on the back of a napkin. All contracts should also be uncomplicated. You’ll want to have a very very clear commission rate plan. This allows the sales people to comprehend what they are supposed to do in order to generate the most incentives. The right behavior in then incentivized.
3 Make the salesman initial each calculation and illustration. Did they know already, or should the salesperson have known? That question is going to be answered in a courtroom and could be the deciding factor in a litigation. Each example and calculation should have the sales reps initial next to it. Also, the calculation has to be clearly stated, as noted before.
4 Describe when a commission is going to be taken away – What are the results if a company’s neglect causes the loss of a buyer? What will happen if a product is bad when it reaches the customer because it was mailed the wrong way? Whose fault is that? And, what happenswhen a product is returned that is malfunctioning, should the rep still get their commission payment? These conditions, as well as many others, should be stated clearly to prevent legal cases. After being explained in detail, the reason why and instances of this incidence should have the sales reps initial next to it. The number one reason for legal actions is taking a compensation away from a repetition. This can be unpleasant to do.
5. When can a customer be given to another sales rep? Firms have different circumstances why they may decide to change a sales representative for a certain client, or group of shoppers. Realigning territory, or given that they feel that a different sales representative can move additional products with a particular buyer are just two of the many reasons. The significant issue is the contract and comprehension of the sales representative. The factors are not critical. We don’t want the sales person to sue or quit over any transfer of a consumer. Any transfers that may take place, must be explained to the salesperson in a timely and professional manner.
6. Contract termination by either person – The instances and rules that govern the termination must be detailed prior to when the work starts, and as in all agreements, must be initialed on each section, when possible. If a salesperson quits or is fired, typically, they’re paid any outstanding compensation due to them. What about potential earnings, like, splits with reps or residuals? Particularly when a rep is let go, this is where law suits occur since there is not a clear comprehension.
7. Commission payment statements need to be exact and professional looking. Use a regular software system, including CommTrack, one to the leading software products on the market, to automate your sales commission method. Every statement has to be accurate, disputable in an easy manner., and crystal clear. What I mean by easily disputable is, there has to be a normal way to dispute whether a commission payment is exact and payable or not.
I wanted to free up the time of the people that tracked commissions, so I developed the commission calculation software that does just that. It takes the hard work out of the equation. Now you have the confidence everyone is being paid correctly.