Product Info - Free Commission Agreements - Software: Sales Rep

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Sample Software Sales Rep Commission Plan Template

iSoftware Sales Rep Compensation Agreement

Revision Date: ii __________

 

This document describes the agreement between iii ______________ _
(“Company”) and iv (“Sales Rep”) regarding terms related to compensation.
Company and Sales Rep enter into this agreement whereby Sales Rep provides sales services to the Company in return for compensation specified in this agreement.

Duration:

This agreement covers the period starting from v and ends on
.
All commissions will be calculated and paid once every month, for the preceeding month. Commissions will be calculated and paid out as part of the next payroll cycle, following the month for which commissions are calculated.

Base Pay:

viSales Rep is due a base salary of vii , payable every viii_______________.

Sales Compensation:

Targeted sales compensation for the full year is ix ________. The sales compensation is not capped.

Other Compensation:

Sales Rep will be paid for all travel and lodging expenses related to sales activities. Auto travel will be reimbursed at the current federal reimbursement rate (Currently $0.45 cents per mile).
Sales Reps will be required to maintain a cell phone as part of conducting sales business. Sales Rep will be provided an allowance of $50 per month for cell phone usage.
Client entertainment expenses will be reimbursed as following:
Meals: Reimbursable with receipts.
Special Events: Must be pre-approved. Reimbursable with receipts.
Expenses will be reimbursed within _30 days of being presented with the receipts and a completed expense reimbursement form.

xSoftware License Sales Commission

Quota:

Sales Rep does not have a quota for this Commission.

Sales Credits:

Sales Commission is paid to the Sales Rep based on revenue of the following products:
xiiAccounting App
CRM App
Supply Chain App
Sales Rep earns commissions on sales where they had a direct responsibility for the sale. Sales Rep earns commissions only when an invoice to the customer is completely paid.xiii
Sales Revenue minus Tax and Shipping charges are credited to the Sales Rep.

Calculation:

Sales credits are paid at the following rates:
Accounting App
$10
CRM App
$9
Supply Chain App
$11

Example:

Assuming Sales Rep completes the following sales-
Invoice1 Accounting App Revenue = $60,000
Invoice2 CRM App Revenue = $30,000
Commissions will be calculated as follows:
Invoice 1
Accounting App
$60,000 x 10%
= $6,000
Invoice 2
CRM App
$30,000 x 9%
= $2,700
Total Commission: $8,700

xivServices Commission

Quota:

Sales Rep does not have a quota for this Commission.

Sales Credits:

Sales Commission is paid to the Sales Rep based on services invoiced such as:
Software Implementation
Training
Sales Rep earns commissions on sales where they had a direct responsibility for the sale.
Sales Rep earns commissions only when an invoice to the customer is completely paid

.xvCalculation:

Sales credits are accumulated and paid at a standard 2% of Revenue.

Example:

Assuming the following services in the month –
Invoice1 Software Implememtation $8,000
Commissions will be calculated as following:
Invoice 1 $8,000 $8,000 X 2% = $160 (Commission)
Commissions will be calculated as follows:
Invoice 1
Software Implementation
$8,000 x 2%
= $160
Total Commission: $160

xivMaintenance Contract Commission

Quota:

Sales Rep does not have a quota for this Commission.

Sales Credits:

Sales Commission is paid to the Sales Rep based on the revenue from the Maintenance & Support contract invoiced:
Maintenance & Support Contract
Revenue is for new contracts only, not renewals. Sales Rep earns commissions on sales where they had a direct responsibility for the sale. Sales Rep earns commissions only when an invoice to the customer is completely paid. xv

Calculation:

Sales credits are paid at different rates for different periods from the contract date. Sales credits at the following periods from the contract date:
Periods         Rate
1 - 12             7%
13 - 24           4%
24 - 36           3%

Example:

Assuming that there were contraccts with the following contract dates:
Contract1 6/1/2008
Contract2 6/1/2009
And there were maintenance contract related payments as follows:
Maintenance Invoice 1 Contract1 1/1/2010 $10,000
Maintenance Invoice 2 Contract2 1/1/2010 $10,000
Commissions will be calculated as follows:
Invoice 1
Contract1
$10,000 x 4%
= $400
Invoice 2
Contract2
$10,000 x 7%
= $700
Total Commission: $1,100

Quarterly New Sales Bonus

Quota:
Sales Rep has a quota requirement of xvii of new sales revenue for the quarter.

Sales Credits:

Sales revenue can be product or service sales. Sales have to be made to brand new customers. Sales Rep earns commissions only when an invoice to the customer is completely paid.xviii
Sales Revenue minus Tax and Shipping charges are credited to the Sales Rep and compared to the Quota.

Calculation:

Sales credits are accumulated and compared against the quarterly quota. If the quota is exceeded, Sales Rep gets a quarterly bonus of $5,000.

Example:

Assuming Sales Rep has a quarterly goal of $500,000.
If Sales Rep makes $450,000 in Quarterly New Sales, then Sales Rep does not get any bonus.
If Sales Rep makes $550,000 in Quarterly New Sales, then Sales Rep gets the bonus of $5,000.

President’s Club

On achievement of 125% of the annual quota for the main sales commission incentive, Sales Rep will join the President’s club. President’s club members will be invited to the annual sales meeting trip held in the first quarter of the next year.

Draw

During the first three months of employment with the company, the Sales Rep is provided a recoverable draw of $2,500 per month. The draw balance will be recovered as soon as possible from future earnings.

Cap

There is no cap on any payouts to the Sales Rep.

Termination of Employment

On voluntary or involuntary termination of Sales Rep employment with the Company, commissions will be paid on transactions dated prior to the termination date only. Any amounts owed to the Sales Rep will be according to employment regulations after withholding taxes and other dues.

Other Terms

1. Sales Rep agrees to follow all Federal and Local laws while engaged in providing services to the Company during the period of this agreement.
2. Sales Rep shall not engage in any other employment during the term of this agreement. Company reserves the right to require Sales Rep to terminate any such other employment at Company’s sole discretion.
3. Sales Rep shall use the most ethical practices while engaging in any sales activity.
4. Sales Rep agrees to protect all confidential material including prospect data, sales data, and client information belonging to the Company and shall take all reasonable care in making sure that such confidential material is not disbursed to anyone outside the company.
5. This entire agreement shall be governed by the laws of the State of _ .
Company     Sales Rep

_________     _________

By                By

_________    _________

Name            Name

_________    _________

Date              Date

i Any part of this document can be changed or overridden based on your needs.
ii This date will give us information as to when this agreement was written and distinguish it from similar other agreements.
iii Fill out the company name here.
iv Fill out the sales person’s full name here.
v Enter the start and end date for the sales commission plan effective period. Most companies use the calendar or fiscal year start and end dates for these values. Some companies may not have an end date specified.
vi Alternatively you can remove this section or phrase it such as “Base Salary is specified in a separate employment agreement.
vii Amount of base every payable period.
viii Weekly, Bi-weekly, Twice-monthly, Monthly, etc
ix If there is a targeted compensation for the full year, it can be entered here. Alternatively, this whole section can be removed.
x This incentive encourages higher levels of software license sales, by paying higher commissions when the quota is exceeded.
xi Enter quota amount here. It could be setup to be a monthly or quarterly quota. It is also possible to not have a quota at all.
xii Replace with appropriate products or product families. Alternatively, replace products with customers or types of business.
xiii Alternatively commission can be due on invoicing or shipping of goods or other events.
xiv This incentive provides commission to the Sales Rep on maintenance and support contract sales.
xv Alternatively commission can be due on invoicing or shipping of goods or other events.
xvi Commission rate can either be a flat rate or be based on a tier.
xvii Enter quota amount here. It could be setup to be a monthly or quarterly quota. It is also possible to not have a quota at all.
xviii Alternatively commission can be due on invoicing or shipping of goods or other events.

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