Thanks for reaching out to us - here’s a quick answer to some of your questions, though a longer discussion would be more comprehensive:
1. Who gets credit for the order; sales team at the time of booking or at the date of invoicing?
Historically, many companies associate the crediting and payout events together for simplicity of processing; however, I have seen instances where the sales team gets credit for the sell immediately at booking showing they have “earned” the commission versus being paid. In those scenarios, they would typically have two separate columns on their compensation statements showing both earned for the month and paid for the month given them visibility. That scenario becomes more challenging to show that way if not on just a straight commission type payment per transaction as there could be other tiers or thresholds from an attainment perspective that could drive higher payouts by the time the pay event has been reached. Finally, I have experienced instances where companies go down the middle for some level of compromise and pay 50% of eligible commissions at the time of booking and the other 50% of eligible commission at the time of Invoicing.
2. If there are business challenges with inventory or resources internally, do you give the rep the benefit of revenue early or do you provide an advance on potential earnings if they are in a financial hardship?
If all of the payout is held until some further triggering event such as being paid on the invoicing event that typically has some significant lag behind the booking event, companies will normally provide some kind of advance or recoverable draw based on a percentage of his on target earnings (OTE) that is then netted against those future earnings making the company whole. This allows the rep to receive a standard monthly draw as a % of OTE while not having the company feel like they are just fronting the money given the future payout is reduced by the amount of draw already received for that period of time.
3. If you provide advances on possible revenue, what should a Company provide to an associate during these times? An organization does not want to become a bank but what is the right % to provide overall to an associate via a loan?
Most companies we interact with aim for a draw amount around 20 - 35%, but I have seen some organizations go as high at 40 - 50% in extreme cases. As you stated, the company is not there to be a bank just blindly giving out free money to the sales reps. The terms around a Recoverable Draw, versus a Guarantee, will leave them the ability of netting back to actual earnings with some kind of repayment in certain cases if the rep consistently falls below the draw total. The % of the draw can also be impacted by the pay mix of their OTE depending on how much is base versus how much is variable.