When you're job searching time is always an issue, especially if you're unemployed or in a bad job that you really need to move on from. In addition, you don't want to waste your time weeding through old job listings that are out-of-date and already filled read more
Wednesday, March 3, 2021
The Ins and Outs of Sales Commission Agreements
If you run a business that depends on a successful sales team, it's likely that you have a commission agreement in place. If you’re just getting acquainted with this process, make sure you know the ins and outs of sales commission agreements, so you can’t be held liable for any disputes or disagreements. By clearly outlining your terms, you can be protected.
Outline the Type of Commission Agreements
Regular employees and independent contractors need to have different agreements in place. Make sure you outline the distinctions and use the proper agreement based on the type of employee you’re working with. This is primarily to ensure you’re following the proper tax guidelines. If you have an employee, it’s up to you for withholding taxes, but when it’s an independent contractor the onus is on them.
Make Your Plan
Your commission agreement should clearly outline your commission plan so that you’re covered in as many scenarios as possible. This way you and your sales team member have a clear understanding of how commission works and there’s no confusion. Here’s what you need to outline for them:
- The method of commission: Do they get salary plus commission? What percentage do they get per sale? Make sure that the sales rep understands how commission is calculated.
- When they get commission: Explain when they get commission and what time commission is paid. Do they get their commission every month? Every sale? It’s important to explain this so they’re not questioning where their money is.
- Explain what happens if their sale doesn’t go through or if there is a refund issued.
- Explain how commissions work in case of termination or if the employee quits.
These are some of the most important things to consider, but make sure you run through all the possible scenarios based on what your business sells. You want this agreement to be as airtight and concise as possible.
Use Commission Systems to Help
Making a commission agreement and resolving disputes can be arduous and time-consuming. By having the right sales team management tools, you can make this process much easier.
If you are looking for a commission reporting software, visit this website.
Subscribe to:
Posts (Atom)