Frequently Asked Questions

Draw is always applied against final commission calculated. You first have to calculate the commission amount as if there was no draw, then the commission amount has to be compared to the draw to see if it falls below the draw amount. If it falls below, the difference is given as a loan to the rep and recovered in future from the rep.

Example:

Draw = $3000 a month.
If calculated commission is $2,500, then you would ‘loan’ $500 so that the check cut is for $3,000.

The idea is that the Draw provides a livable income for the rep involved, especially during their learning period. That is why it is calculated after commissions.

We have seen firms pay commissions to sales reps on various events such as, on order, on invoicing, on shipment and on payment. Sometimes they also pay on a combination of these events. The choice of the event to pay on typically depends on the company’s business.

If the sale has a very low chance of getting cancelled and falling out, then paying on order makes sense. Otherwise invoicing is the better event to pay commissions on because, at this point you have the order and customer is being billed for the product/service. Most companies pay commissions on invoice.

Some companies have problems with collecting revenue. In this case, it may make sense to use the salesperson to help in the collection process, by paying commissions on payment. The other reason companies pay commissions on payment is to keep the salesperson involved with the customer until the product/service is delivered and the customer is satisfied. You should choose the most appropriate event based on your business needs.

“If you pay commission on receiving payment from customer, how long should you wait until paying commissions?”

In general, the closer the payment is to the sale, the better connection the salesperson will make between their effort and the reward. Administrative convenience dictates paying commissions once a month, but many companies pay commissions twice a month or even once a week.

ur product can calculate gross profit in the following ways:

1)  by using the average cost for the item;
2)  by using the fixed cost for the item;
3)  by getting the cost from the Purchase Order associated with the invoice;
4)  by getting the cost from the Estimate associated with the invoice;
5)  and some combinations of the above

Volusion:

• can integrate to QuickBooks 
• can export data as .CSV files

QCommission can directly integrate to QuickBooks and pick up date loaded into QuickBooks by Volusion. This could work if you are using QuickBooks. You could export the data as CSV files and we can do some configuration work to import those files into our commissions solution.

Our commission solution is very flexible and should calculate most commission plans.

We have a solution that can calculate the payments to the tutors, after reducing by your cut.

The payout amounts in detail can be reported to the tutors in form of a statement sent through email. The actual payment amounts by tutor, can be provided as a file (or can directly update Accounts Payable, if you are using QuickBooks) . But it does not directly update Paypal.

Draw is always applied against final commission calculated (to our knowledge). You first have to calculate the commission amount as if there was no draw, then the commission amount has to be compared to the draw to see if it falls below the draw amount. If it falls below, the difference is given as a loan to the rep and recovered in future from the rep.

Example:
Draw = $3000 a month.
If calculated commission is $2,500, then you would ‘loan’ $500 so that the check cut is for $3,000. The idea is that the Draw provides a livable income for the rep involved, especially during their learning period. That is why it is calculated after commissions.

 

There isn’t anything like a standard rate of commissions that is generally available. Commission rates tend to vary by industry, by region of the country, by type of sales role expected. The best bet is to discuss with individuals who do a similar role for the specific kind of products you are interested in selling. It maybe a type of draw. This is where a firm will agree to pay a certain minimum amount every period, regardless of the commission a salesperson earns. If the salesperson earns less, they will provide additional amounts up to the minimum amount. If earned commission is higher then the guarantee will be ignored.