Should you pay commissions once the deal closes or wait until the invoice is paid?

According to our 2023 Sales Compensation Trends survey, 64% of companies pay out commissions upon the deal closing versus 20% at the time of invoice payment.

That number shifted to 47% at the time of deal closing and 35% at invoice if the company generated less than $25 million in annual recurring revenue. 

But with a harsher market and a higher risk of companies not fulfilling payment obligations, it’s time to rethink commission payment periods.

We realize there are a ton of factors to consider when setting payment terms. (Industry, size of the opportunity, stage of the company, and even new hire ramp time.) So, to help work through those factors, we asked five RevOps and Sales leaders for their takes.

Here’s what they said. 

Natalie Love — Depends on the stage of the company

Natalie Love, Senior Manager of RevOps at 15five, has experienced both commission payout methods.

“When we were an earlier stage company and more manual in our billing and collections processes, we paid upon collection,” Natalie said. “This incentivizes the sales rep to help with collections and ensuring payment.”

However, once they scaled and added automation to their accounts receivable processes, they transitioned to pay on the closed deal. In doing so, they were able to incentivize deal velocity and speed-to-close.

And, to ensure a successful launch of customers, they added a clawback clause.

Carl Ferreira — How you book revenue should dictate payment terms

Meanwhile, Carl Ferreira, Director of Sales at Refine Labs, said the timing of commission payments depends on how your company books revenue.

“Big contracts might have extensive processes, accounts payable departments, and net 90 terms,” said Carl. “If I’m working and selling for SAP, then I shouldn’t have to wait for 90-plus days and another 30 days for the payroll cycle for commissions.”

Reversely, in an early-stage startup, where free cash flow might be limited and the product is more transactional, paying on collection makes sense, Carl added. 

At Refine Labs, Carl said his reps receive commissions in the next possible payroll cycle for deals closed won.

“If a deal implodes and never pays, then we issue a clawback. Although, that’s never happened,” Carl said. 

Jonathan Slagle — New biz at start date and renewals at invoice

Nearpod Senior Commissions Analyst Jonathan Slagle has worked at two organizations that handled this differently.

One company, for instance, paid on the “effective date,” or the start date.

“For new business, this aligned pretty closely with the close date, but for renewals and upsells tied to their renewal, it could vary by a couple of months or more,” Jonathan said. 

So, to account for auto-renewals that triggered or closed extra early in their CRM but were not effective for revenue or case purposes until later, they held payout until redeemable. 

“This was at a startup that had a higher frequency of contested autorenewals and invoice ghosting, so the effective date was used to reduce clawbacks and help align commissions with cash flow while not making the reps wait until actual cash flow,” Jonathan said. 

At another organization, where the risk of churn post-invoicing was much lower, everything became payable on the close date of the sale. 

Winson Liu — Churn risk isn’t a factor

The risk of churn keeps coming up. But On Deck Founder Fellow and RevOps leader Winson Liu offered an alternative view.

“I’d argue that paying reps based on close date doesn’t reduce churn risk, nor does it make churn risk higher,” Winson said.

Rather, customers churn due to account operations, whether that’s owned by accounting, the AE, or the CSM.

“It’s all about how the company overall manages the handoff from signed contract to payment to implementation to product adoption and usage,” Winson said. “At least to me, it’s not a conflated situation.”

Shalhevet Engelson — Paying on invoice limits payment terms creativity

Can payment upon the invoice lead to internal dissonance for the rep? This leader thinks so.

“If you pay reps based on the invoice date, you’re incentivizing reps to be less flexible on payment terms with customers and that might put your reps in a sort of Catch-22,” said Shalhevet Engelson, RevOps Specialist at DealHub.

That’s especially timely in today’s economic climate which has pushed sales teams to get creative on how they structure deals.

“That flexibility leads to more wins and more revenue,” Shalhevet said. “If reps don’t get paid until the invoice, they might want to be flexible with the customer in order to close the deal more easily, but they also might not want to be flexible because they want to get paid sooner.”

So, how have you set up your sales commission payment terms?

As you can see, like most topics with sales and sales compensation, there are no absolute rules. However, there are some organizational indicators that signal one way might be better than another.

Previously, we’ve recommended paying your reps as quickly as you can. However, if you’re hoping to solve for cash flow in 2023, re-defining your payment terms can help address that.

Need additional help with sales compensation management and commission tracking? Schedule time with our team today. 

From learning how to cold call prospects to finding ways to shorten the sale cycle, sales reps have a lot on their plate. But there’s one concern that supersedes them all — compensation. And with that, comes pay mix.

In sales, compensation is made up of base pay and extras, such as bonuses and commission. Together, those elements make up your pay mix.

What is pay mix?

Pay mix is the ratio of base salary and on-target commission. This might be confused for on-target earnings, but it’s slightly different.

Now you may think Pay mix sounds like something you’d eat at a party, but it’s even more important. This ratio outlines how a sales rep gets paid. You’ll most often see it represented in a percentage format. One half of the ratio is the base pay, and the other half is commission and bonuses, also known as incentive compensation. When combined, the two form your on-target earnings (OTE).

Remember that pay mix is about more than defining compensation. The right mix can help the company achieve its own goals, too. Commission pay drives salespeople to increase their demos, connect with more customers, and keep a sharp eye on their performance. In other words, a good pay mix means more selling! Fair base pay ensures the team feels taken care of while they sell your newest product.

Calculating pay mix

It’s easy to calculate pay mix. On-target commission divided by OTE equals the percentage of your pay tied to the commission. Base salary divided by OTE equals the percentage tied to base salary.

For instance, if your on-target earnings are $100,000 and your base pay is $54,000, your pay mix is 54/46. Usually, it’s expressed as base salary first, then on-target commission, but it’s important to confirm that’s the case!

What’s the average pay mix?

According to our 2023 Sales Compensation Trends Survey, the most-used and industry-recommended pay mix in SaaS consists of 50/50, or 50% base and 50% commission and bonus for sales roles.

Other industries may have a different default pay mix. The numbers may also shift, depending on position and/or experience. A sales executive is more likely to have their pay mix weighted toward base pay, while a rep traditionally relies more on incentive pay.

Marketing is a good example of an industry with a higher base. In real estate, agents have no base salary and rely solely on commission for a pay mix of 100/0.

The skewed mix seen in real estate is unusual, though. A pay mix weighted heavily toward base pay can demotivate reps who have little incentive to chase commissions. When the pay mix is out of balance and in favor of commission, reps get stressed, and concerns over income might tank morale.

Pay mix is important, but it depends on the ability to calculate commission accurately and efficiently. In other words, you must know exactly how much you or your reps are bringing to the table. QuotaPath’s innovative software is designed to make tracking and managing sales commissions easier than ever. To get started, create a workspace for free today.

In this blog, QuotaPath‘s Chief of Staff and host of Sales Nerds Live! Graham Collins shares 5 sales compensation plan examples. Read on for a sales manager compensation plan sample, SDR compensation plan, VP of Sales compensation package, sales rep commission, and recruiter commission plan sample.

Designing compensation plans is not an easy task. You have to balance fairly paying your sales rep commission. However, you don’t want to overpay them. You also have to consider the goals laid out by the finance team. Not to mention trying to build a compelling VP of Sales compensation package! It can feel like you’re being pulled in 10 different directions.

I wish there was a universal perfect sample compensation plan, I really do. However, with all the different sales roles, business models, industries, and locations, that one perfect plan is impossible. There is no SDR compensation plan that works for everyone. The tiered commission structure that works for one company, may be horrible for another. So, instead of trying to solve all compensation plans for everyone, I thought I’d give you a leg up when designing compensation plans for your company by showing you a few sales compensation plan examples that have worked for companies in the past. 

Below you’ll find an example sales rep compensation plan, an example SDR compensation plan, an example sales manager compensation plan, an example VP of Sales compensation plan, and an example recruiter compensation plan. Don’t forget to check out Compensation Hub, a free resource we created that includes more than 20 adjustable comp plan templates to support comp plan design. 

First, I’ll explain what a comp plan entails to be successful. Then, we’ll take into consideration each of the examples of variable compensation plans. Lastly, I provide a list of comp plan examples for inspiration.

What Does a Sales Compensation Plan Need to Achieve?

A well-structured sales compensation plan is the backbone of a motivated, high-performing sales team while ensuring alignment with your company’s business goals.

Sales roles are notoriously high-stress and prone to high turnover; in fact, the median tenure for sales representatives is just over three years, according to the Bureau of Labor Statistics. With hiring costs ranging from $10,000 to $15,000 per sales rep, turnover quickly becomes an expensive challenge for businesses.

A strong sales compensation plan can reduce turnover by providing clear incentives for sales reps to stay and perform at their best. It motivates them with a balanced mix of salary, commissions, and bonuses while offering the clarity and fairness necessary to build trust. Notably, over half of employees consider leaving their jobs if compensation doesn’t meet their expectations, underscoring the critical role of a thoughtful comp plan.

Here are the core goals a sales compensation plan should achieve:

Align with Business Objectives

Your compensation plan must support your company’s overarching goals and sales strategy. For example:

• Increasing market share? Incentivize reps to acquire new customers.
• Boosting customer loyalty? Offer rewards for upselling and cross-selling to existing clients.
• Building strong leadership? Use manager-focused compensation plans to encourage team-building and development.

You directly link rewards to business outcomes to ensure sales reps’ efforts drive the desired results.

Motivate High Performance

The right plan creates a clear connection between effort and reward. Fundamental mechanisms to consider include:

• Sales Quota: The minimum sales target reps must meet to earn commissions.
• Accelerators: Additional bonuses for exceeding sales quotas, motivating reps to go above and beyond.
• SPIFFs (Sales Performance Incentive Funds): One-time bonuses for achieving specific objectives, such as closing deals in a priority category or within a short timeframe.

Incentives like these boost individual performance and contribute to overall team success.

Provide Transparency and Security

Sales teams thrive when they understand how their efforts translate to earnings. Detailed communication about on-target earnings (OTE)—the expected annual income if targets are met—and clear documentation of commission structures help ensure transparency.

Security measures, like ensuring fair base salaries for sales reps and managers, also reduce turnover risk while fostering trust.

Enforce Accountability

While motivating your team is crucial, your plan should include mechanisms to address underperformance or mitigate financial risks.

Common elements include:

• Decelerators: Reduced commission rates for underperforming reps.
• Clawbacks: Provisions for reclaiming commissions in cases of canceled sales or misconduct.

Accountability measures maintain fairness and protect the organization’s financial interests.

5 sales compensation plan examples

1. Sales manager compensation plan sample

Sales managers are responsible for, well, managing salespeople. There are times when the title “sales manager” applies to someone who doesn’t actually have a team of salespeople reporting to them. For this example, I’m talking specifically about managers who do not focus on closing their own deals but instead have several sales reps who report in. 

Unlike sales reps whose quotas are unique to themselves, sales managers’ quotas are typically based on the collective quotas of the people reporting to them. Their quota is not always a sum of their team’s quota. They are sometimes given a “buffer” of 10-20%. This means that if a sales manager has 5 reps reporting to them, each with a $150k quota, the manager’s quota is 90% of that sum. So, instead of $750k (5*$150k) it is $675k ($750k*90%).

Because the sales manager compensation plan sample is built around the deals their reps close, it allows them to spend their time coaching their sales team to close more deals. 

Build a Sales Funnel

Use our free sales funnel resource to see how many meetings your team needs to book to hit quota.

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2. SDR compensation plan

An SDR, or sales development rep, is typically responsible for scheduling meetings for the sales team. Sometimes businesses refer to this role as an MDR (market development rep), BDR (business development rep), or LDR (lead development rep). Regardless of their title, they handle the top of the funnel for a sales team. This could be qualifying marketing leads, running outbound calls and emails, and even holding discovery calls. As for compensation, the three plans below are the most widely implemented SDR comp plans.

• Number of meetings: This SDR compensation plan is the most common for early organizations that want to fill their sales reps’ calendars. For every meeting the SDR sets (that actually happens!) they receive a bonus. This bonus varies wildly based on the company’s ASP (average sales price) and demo-to-close rate. Generally, the bonus falls anywhere between $20 and $300. 
  
• Number of qualified opportunities: This SDR comp plan is better once an organization has a clearly defined ICP (ideal customer profile) and only wants sales reps on the phone with qualified prospects. It’s important to create very clear and concise rules as to what a qualified opportunity is so there is no ambiguity. Once again, this bonus is highly dependent on the company but generally a higher dollar figure than simply paying for demos. 
  
• Percentage of revenue generated: While many organizations think this is the ideal SDR compensation plan, it is only the right option for specific companies. Essentially, in this example comp plan, SDRs get paid a commission on all closed won deals that originated from the opportunity they created. This only works if you have a shorter sales cycle (ideally sub-60 days) because the SDR needs to have control over their income. The SDR commission percentage typically ranges from .5% to 4%. 

With all that being said, the most common SDR compensation plan is actually a combination of 2 or more of these components. See below for an example of this. 

3. VP of Sales compensation package

When thinking about a sample VP of Sales plan, you have to factor in the entire VP of Sales compensation package. If a VP of Sales is looking purely for a high base salary, most organizations would consider that a red flag. That’s because a VP of Sales compensation package consists of base salary, bonus/variable, and likely a hefty equity component. If the VP of Sales doesn’t have an equity component of their comp package, they may have milestone bonuses for certain achievements or an alternative way to ensure they have a competitive sales compensation plan model.

A VP of Sales compensation package varies from a standard compensation plan in a few other key ways. For example, organizations generally hold VPs to a financial target number set by the CFO and Board of Directors. It is their responsibility to hire, ramp, and train reps to be able to hit that number. So, instead of having a quota that aligns with the number of reps they have, it’s the other way around.

Secondly, their quota tends to change over time as the company grows. That implies that their target might double in Q4 from where it stood in Q1. Because of this, they might earn incentive pay on a “per attainment point” model. This means that they have a set bonus amount and they multiply that bonus number by their quota attainment. See below for an example.

4. Sales rep commission

Because most people who work in sales identify as sales reps, thousands of different sales rep commission plans and commission structures exist.

Where do you start? Well, the easiest thing to do is to start simple and add complexity later as needed. A simple comp plan doesn’t always entail paying a flat rate commission. You might want to add in accelerators/decelerators or you might want to have a bonus. Maybe you want to change the commission rate based on the length of the contract. It will all depend on the specifics of your company and what you’re hoping to accomplish. 

Below, we’ve provided a sample sales rep commission plan that has worked well for organizations we’ve seen in the past. 

5. Recruiter commission plan sample

The first thing to remember about recruiter commission plans is that there are two types of recruiters, internal and external. The difference is that an internal recruiter works entirely within one company. They are an employee of that company. Whereas an external recruiter might work for several companies and is either an independent contractor or an employee of a recruiting firm. Typically internal recruiters do not have a variable pay component of their compensation and receive just a base salary.

On the other hand, external recruiters generally do have commission plans. Those plans can vary quite a bit. But they often share one thing in common: the recruiters earn compensation based on someone getting hired. Now, how much they earn varies widely, but it is typically a percentage of the revenue that the recruiter generates.

For easier-to-fill roles, a recruiting firm might earn only 10% of the candidate’s salary as a recruiting fee. Whereas for more difficult-to-find hires, the recruiting firm might make 50% of that person’s salary. So from there, the recruiter earns a percentage of that revenue based on their revenue target. These commission rates might be as low as 5% and as high as 20%. 

Building Your Own Custom Compensation Plan

Designing a sales compensation plan that aligns with your company’s goals and motivates your team requires a thoughtful, structured approach.

Here’s four steps to get started:

Step 1: Establish What Goals You Want to Achieve

Before diving into the numbers, identify the specific business outcomes your compensation plan should support.

Are you aiming to:

• Drive new customer acquisition?
• Increase upselling and cross-selling among existing clients?
• Foster a collaborative sales culture?
• Incentivize long-term retention and leadership development?

Defining these goals will provide a clear roadmap for the plan’s structure.

Step 2: Determine the Market Rate and Target Compensation

Understand the market benchmarks for sales roles in your industry and region. Resources like salary surveys or compensation platforms can help identify competitive pay rates. Next, decide on your target compensation for each role, focusing on on-target earnings (OTE)—the total expected income for meeting performance expectations.

Step 3: Pick the Right Metrics and Targets

Select metrics that directly support your business objectives. For example:

• Revenue-based metrics for driving sales volume.
• Customer acquisition metrics for market expansion.
• Retention or upsell metrics to increase customer lifetime value.

Pair these metrics with realistic, yet ambitious, sales quotas or targets. Be sure your reps have the tools and support to achieve them.

Step 4. Choose a Compensation Breakdown

Determine the balance between fixed and variable pay, such as:

• Base salary: Provides security and reduces turnover risk.
• Commission: Rewards performance and motivates effort.
• Bonuses or SPIFFs: Drives short-term goals or strategic priorities.

Your breakdown should reflect the role’s focus—heavily commission-based plans often suit individual contributors, while managers might prefer a steadier income mix.

Following these steps, you can craft a compensation plan tailored to your company’s unique needs, ensuring alignment with both business goals and your sales team’s motivation.

Final thoughts

As you’re building out compensation plans, remember that you always want your plans to fill three core requirements: 

• Simple. The plan has to be easy to understand, otherwise, you won’t get the behavior you’re trying to encourage. 
• Logical. Comp plans should follow your company’s strategy, not the other way around. 
• Fair. It has to be attainable and people have to feel like they can make money off it.

As long as your plans meet all those requirements, you’re already ahead of the game. If you need more advice or sales compensation plan examples, visit Compensation Hub for free, customizable comp plan templates, and QuotaPath’s blog is also a great resource for helpful tips and resources. 

Once you’ve built out your compensation plan, find an easy commission tracker. That’s where QuotaPath comes in. QuotaPath is a commission tracking tool built for transparency, simplicity, and accuracy. If that’s appealing, schedule a full overview today.

You’ve heard from us about how sales compensation software can help you save time, align your teams, and provide transparency.  

But did you know that tools like QuotaPath can also help you and your key stakeholders understand and anticipate cash flow expectations?  

For instance, when Silicon Valley Bank abruptly shut down, many companies immediately jumped into action to mitigate risks related to expenses and safeguard employee paychecks.

This likely meant understanding the timing and amount of upcoming expenses related to payroll, including commissions. How much would you need to pay commissionable reps at the end of the month or the end of the quarter?

Payroll systems provided a majority of the answers to their questions, but what about the employees with variable compensation? 

That’s where QuotaPath came into play. 

In SVB’s aftermath, we heard that many of our customers leveraged our earnings forecasts, deal reviews, and approvals to quickly get a pulse of their expected commission expenses for the month and quarter. They didn’t have to request special access, wait on a spreadsheet, or call upon a teammate. Instead, they logged in and had access to the info immediately. 

It’s moments such as this, when stakeholders need to understand cash flow, that QuotaPath can provide real-time insights.

Below are a few more scenarios that QuotaPath can help you with, no matter how the market or your business changes. 

Get a pulse on expected commissions expenses

The SVB situation magnified the importance of knowing how much cash you’ll need to run payroll, inclusive of commissions. QuotaPath can be useful in making business decisions when you’re applying for a loan, fundraising, or need to report on cash burn.

Measure your capital and team efficiency

Since QuotaPath keeps a record of commissions, leverage the historical data to track effective rates, see the total cost associated with a win using our deal detail page, and showcase the info to current or potential investors.

Weekly pipeline reviews

QuotaPath’s team runs our pipeline reviews by pulling up Team Attainment leaderboards. Individually, each rep speaks to the recent deals they won, while sharing the next steps and the win probability for the remaining forecasted deals at the monthly and quarterly levels. 

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If we can be of assistance in helping you get the most out of QuotaPath and manage your team’s compensation, please reach out. 

We’ve got a dedicated team here of experts ready to show you how our platform can play an integral role in your business operations.  

In the last few years, RevOps careers exploded across the tech industry. 

According to Clari, RevOps jobs increased by 300% in the last 18 months on LinkedIn. 

This growth follows the rising changes in how companies think about their revenue philosophy. 

Forbes said, “RevOps treats revenue not as a fortunate outcome of a quality product, but like a mirror of the supply chain — a pipeline that needs to be powered by optimized business processes.” 

These optimized business processes must also reflect how buyers buy now. 

For instance, in today’s market, tech buyers have already done plenty of research before connecting with a sales rep.

Some even expect to be able to trial a product ahead of that introduction.

That means all internal teams, Sales, Marketing, Account Management,  Customer Success, and even Product, must align on what matters most to the buyer and the customer, and then work together to deliver those experiences. 

And the role that connects them, with data-backed recommendations to optimize business efficiencies and revenue, is RevOps.

What is RevOps? 

Revenue Operations (RevOps) aims to bring data transparency across Sales and Marketing, improve process efficiencies, drive revenue predictability, and achieve revenue growth.

The goal of RevOps is to streamline the customer journey and remove any obstacles or inefficiencies that may prevent a customer from making a purchase or reaching their desired outcome.

This is achieved by combining data, processes, and technology to create a unified revenue team that works toward a common goal. By focusing on revenue-related metrics, such as customer acquisition cost (CAC), customer lifetime value (CLV), and net promoter score (NPS), they work to improve the customer experience and promote growth.

Essentially, RevOps helps businesses maximize their revenue potential. 

When is it time to hire for RevOps? 

There is no “perfect time” for an organization to bring in a RevOps hire. However, RevOps should be able to address these challenges: 

* Streamline revenue processes

* Act as a liaison to Sales and Marketing 

* Eliminate data silos 

* Remove unnecessary resources, or “app bloat”

At QuotaPath, for example, our CEO and Co-Founder AJ Bruno hired our Sr. Director of  RevOps, Ryan Milligan, with only 40 employees at the time. We hired Ryan initially in a SalesOps role, but after AJ recognized Ryan’s vast skillsets in Sales and Marketing, we pivoted the role to RevOps. So, it was an easy decision to move Ryan into RevOps. 

Stage 2 Capital has some great advice about when and how to hire for RevOps. Specifically, they call out the need for RevOps once you’ve hired your first Sales Leader.

90-Day Plan for RevOps 

Your first Revops hire should come into the role with a 90-day plan. To learn what to expect and to help shape your new RevOps leader’s plan, we borrowed advice from RevOps Leader Jeff Ignacio. 

Jeff recently started a new role and outlined his plan. 

He said it usually takes six months to establish a RevOps framework, but there’s a way to cut that in half with a practical 90-day plan.

First 30 days: 

• Learn as much as possible
• Understand the company’s values, culture, goals, and processes
• Meet with key stakeholders and leaders across the organization 
• Understand the current revenue landscape and challengers
• Identify quick areas to win
• Set goals for the first 90 days that align with the company strategy

After the first 30 days, RevOps can start executing and implementing some changes.

60 days in: 

• Establish a RevOps plan to achieve the goals set in the first 30 days
• Implement new tools to get rid of silos and will generate revenue
• Collaborate with sales, marketing, customer success, and other teams to create seamless communication and execution of RevOps strategies 
• Analyze data to improve processes and close gaps

For those last 30 days, RevOps leaders should start growing the business and showing profitable contributions.

90 days (last 30 days): 

• Continue to optimize processes and tools to create generational revenue 
• Measure RevOps initiatives that you implemented in the first 60 days
• Continue to develop relationships with key stakeholders to deepen alignment and collaboration 
• Present reports to leadership and seek feedback for improvement 

RevOps Best Practices

Whether you’re a growing company looking to start a RevOps team from the ground up or adding more experienced leaders to your team, we have a few best practices that we’ve gathered from our RevOps pro, Ryan. We touched on some of these practices above via Jeff’s framework, but let’s get more granular.

1. Understand Company Goals: the knowledge gained in your last role will only get you so far. Educate yourself on this business’s current industry and needs, which will help you understand how to bring in more revenue.
   
2. Align company leaders: all heads of the business should be on the same page about business goals. If you create transparency then everyone will trust your practices.
   
3. Verify data: Correct data ensures you pay your sales teams accurately. Plus, accurate data allows the finance department to make better projections. Your work reflects your department and your boss, and that data will determine the next steps for multiple departments within the company.
   
4. Revenue increases then salary increases: RevOps leaders understand company goals and they can set strategic expectations for the sales team. These should be attainable and realistic. If the sales team believes they can reach quota, they will perform better to meet their goals as well as the company’s.

RevOps leaders carry a heavy load managing the sales funnel, financial projections, and company growth.

 “Sometimes RevOps leaders make the mistake of not asking the sales team what they need, what they see in the market, and how they want to be measured,” said Ryan. “By gathering this feedback from the sales team, I can incentivize the team through compensation plans that drive results and keep the team motivated and happy.” 

About QuotaPath

QuotaPath’s commission tracking software supports RevOps professionals responsible for sales compensation design, calculations, and payments. 

Try out QuotaPath for free by integrating with your CRM, like HubSpot or Salesforce, with a free 30-day trial. 

In an effort to simplify sales compensation, we launched Compensation Hub, a free library of 20 widely adopted and customizable comp plan templates. Users can modify plans for their business and share them internally with their teams to kick off design evaluations. 

Now, we’re taking the simplification a step further.

Your comp plan should be without complexities, and so should your ability to try out sales compensation management solutions before purchasing. That’s why we offer a free trial with an easy-to-follow, 3-step onboarding experience.

Build a comp plan, map your CRM, and streamline payouts during our 30-day trial. Access our most comprehensive product offering with all of our features available to explore. 

With our new trial, users can:

• Build a compensation plan (or borrow one from Compensation Hub)
• Sync your CRM, such as HubSpot or Salesforce
• Invite and manage team members 
• Test future comp plan adjustments to current bookings
• Forecast pipeline deals and attainment
• Approve earnings and schedule commission payouts

Get started in QuotaPath

To see success with QuotaPath, we encourage you to complete these three steps:

1. Build your sales compensation plans
2. Sync your deal data 
3. Onboard your team members

Our intuitive interface will guide you through the steps to build your compensation plan within the app. Use our widely adopted adjustable templates, build your current plan, or test a plan you have in mind to implement later in the year and see how today’s numbers stack up.

Note: Once you have one plan built, you can duplicate and edit it for additional comp plans at your organization.  

Next, you’re ready to integrate your CRM. 

We have pre-built integrations and a data mapping tool with Salesforce and HubSpot that take only a few steps to set up. These syncs are one-directional, meaning only the CRM data feeds into QuotaPath and we never overwrite your data.

The third (and last!) step involves adding your team members.

You’ll have the ability to notify members and invite them into your QuotaPath workspace, or, you may choose not to alert them. If the latter, this will give you a chance to see how their existing pipeline translates to earnings and attainment within our app. 

Once you’ve reviewed your teams’ earnings and attainment, confirmed the sales compensation plans are properly set, and secured your CRM integration, you’re ready to invite your team and give them the sales compensation transparency they yearn for.  

So, what are you waiting for? 

Get out of spreadsheets faster and run your next commission payouts using QuotaPath’s free commission tracking trial. 

Have additional questions about how to use QuotaPath for your plans and teams? Book a time for a consultation with a member of our team for a custom demo of QuotaPath’s sales compensation software. 

If you run, manage or work in a business that offers goods and/or services to customers on a contractual basis, you’ve likely heard about ASC 606. But being familiar with the term and having a full understanding of this important guideline are two very different things. Whether you lead a sales team or are an accountant focused on compliance, you need to know the answer to one very crucial question: What is ASC 606?

What is ASC 606 and who does it apply to?

ASC 606 is a relatively new standard in accounting that outlines the principles of revenue recognition. Most accounting professionals are already BFFs with ASC. That stands for Accounting Standards Codification, which is the go-to source for accounting principles as defined by the Financial Accounting Standards Board (FASB). ASC 606 represents a change to those core principles.

Any company that offers a deliverable, such as a good or service, is technically subject to ASC 606 guidelines. These principles were created by the FASB and the International Accounting Standards Board (IASB). The goal is to make it easier to compare revenue from organization to organization and even industry to industry. In other words, it’s all about simplicity and consistency.

When compliant with ASC 606, companies should be able to:

• Quickly identify inconsistencies and therefore strengthen overall revenue reporting
• Bolster existing revenue tracking and reporting systems
• Better compare revenue recognition across various industries, jurisdictions and markets
• Streamline how financial statements are prepared

Do I need to worry about ASC 606?

Are you a business or organization that enters into any type of contract or sales agreement with consumers? If so, you must be compliant with the principles of ASC 606. This includes the sale of goods as well as services.

5 steps to recognizing revenue under ASC 606

There are five steps to recognizing revenue according to ASC 606 principles. While the details are far more complex than stated here, this overview should serve as an introduction to what’s required to achieve compliance.

Step 1: Identify the contract with a customer

For the purposes of ASC 606, a contract is an agreement that involves two or more parties. This agreement must:

• Have the approval of all parties
• Confirm that all parties are committed to fulfilling their obligations
• Identify what goods or services will be provided
• Identify payment terms
• Indicate that the contract/deal is commercially substantive
• Be predicated on the belief that the vendor is likely to receive payment

Step 2: Identify the performance obligations in the contract

A “performance obligation” is whatever has been promised in terms of transferring goods and/or services between a vendor and the consumer. This sounds simple, but ASC 606 specifically mentions “distinct performance obligations,” which is a more complex definition. For a good or service to be classified as “distinct,” it must be:

1. Something the customer can benefit from on their own or by using other resources that are readily available
2. Identifiable on its own, and therefore held distinct from other promises in the same contract

There are many details involved in determining whether a performance obligation is truly distinct. Many examples include a product plus an added perk, such as a service, that’s intended to increase perceived value. Perhaps a store selling a refrigerator with free installation. The fridge and installation are distinct promises because the consumer can buy and use the fridge and still have someone else do the installation. The vendor doesn’t have to fulfill both promises. In this case, the revenue would be recognized separately.

Consider instead an IT company that is providing a significant company-wide upgrade for a client’s network. They’re including many types of software, all of which depend on custom installation and employee training. Even though these products seem separate, they likely would not be considered distinct. That’s because the customer can’t use them unless the entire package is delivered — the functionality of the parts depend on the whole.

Step 3: Determine the transaction price

The contract should include the agreed-upon price the vendor expects to get in return for the transfer of the promised goods or service. Contract price doesn’t include third-party variables such as sales tax, and it doesn’t consider possible future options.

Determining the price is typically the easiest of the five steps. This is especially true when the transfer involves a fixed cost that’s payable when the goods or service is delivered. For instance, if you sell a stereo and the customer hands you cash, that’s a simple deal. When financing, barter, bonuses, coupons and rebates and other factors come into play, determining price can be a bit more taxing.

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 3 deals with the overall price or consideration the vendor expects in return for their good or service. Step 4 is about determining how much the transaction actually represents economically. This may be a matter of judgment and you may have to make some educated estimates. For the most part, though, you’re basing allocation on the relative standalone price of each good or service.

Step 5: Recognize revenue as the entity

Lastly, it’s time to recognize the revenue. This happens when the deal is done, otherwise known as when the performance obligations outlined in the contract are complete. You’ve delivered the fridge, completed construction on the house or convinced your client to purchase 800 new desk chairs for their team. Once control of the good or service is transferred to the customer, your job is done and you can officially recognize that revenue.

Already comfortable with your current revenue recognition methods and worried about what ASC 606 will mean for your workload and your sanity? You can still use the approach that’s best for your business. Just make changes according to the best practices outlined by ASC 606 and adapt your current process to improve consistency.

QuotaPath offers features for Finance & Accounting to run payroll with fewer mistakes. We also offer a solution to stay ASC 606 compliant. Create flexible amortization schedules and product audit-ready reporting in clicks.

A sales QBR isn’t just another meeting. These crucial sit-downs are often the starting point for major quarterly gains. From addressing urgent issues to strategizing ways and driving revenue, a QBR in sales can uncover crucial insights that help strengthen the entire team.

Not, sales QBRs differ from customer QBRs led by account management. For information on those types of QBRs, check out ScalePad’s 2023 State of the QBR Report.)

Here’s a look at sales QBRs and some tips on how to make the most of these invaluable reviews.

What is a QBR in sales?

“QBR” stands for quarterly business review. This practice is essentially a chance to dig deep into everything that happened over the last quarter and plan for the next one. Unlike an account management QBR, which is done with the client present, a sales QBR is between a sales manager and a salesperson.

In many ways, a QBR is like a strategy session and performance review rolled into one. Think of it more like a discussion than a critique, though. It’s an opportunity for the salesperson to showcase key skills and discuss their plan to meet quotas and propel the team toward company goals. For the manager, a QBR offers insight into an individual rep’s thought process. It’s also a forum for praise, constructive criticism and other bits of actionable advice.

The centerpiece of a sales QBR is the presentation by the rep. These presentations can take many forms, but most include some of the following:

• Recent sales reports
• Forecasting for the next quarter (and sometimes beyond)
• A look at the big picture, including how an individual rep’s numbers play into the company’s objectives

It’s often helpful to use a sales QBR template. This ensures you don’t miss anything while also staying focused on the review’s primary mission.

Why is it important to run a sales QBR?

Sales departments are big on feedback. Weekly one-on-ones are important but often briefer and less in-depth than a quarterly business review. Running a sales QBR allows you to look at and plan for big-picture tasks. This could include:

• Setting promotional guidelines
• Determining and strategizing for longer-term goals
• Giving higher-level feedback that can help not just with current projects but with overall growth and advancement

What to discuss during your QBR

A successful sales QBR starts with a plan. Here are a few expert suggestions for things to discuss. As a rep, this list will help you make your case. As a sales manager, you’ll have the right materials on hand to make a fair and balanced evaluation.

The previous quarter’s sales metrics

Gather your sales figures from the last quarter. We’re talking hard and fast numbers like:

• Quota attainment
• Demo-to-close rate
• Sales cycle length
• Pipeline growth

You’ll be looking at the numbers on their own, but more importantly, you’ll be comparing them to the numbers from previous quarters.

Last quarter’s goals

If you’ve just joined the company or are having your first QBR for another reason, skip this. If you’re on at least your second QBR, you’ll be reviewing what your goals were for the previous quarter.

For sales managers, this is an opportunity to analyze performance and see how the rep is learning from mistakes and scaling their successes.

Goals for the upcoming quarter

You can’t live in the past, but you can use it to plan the future. A big part of QBRs in sales is constructing a plan of attack for the next quarter. Start with three to five realistic but reasonably lofty goals. It’s good to push your rep or, if you’re the rep, push yourself. But remember that setting the bar too high can be defeating even before the quarter gets underway.

As you outline goals, make sure half of them are sales specific. This could include objectives like hitting a sales quota or increasing the number of qualified leads. It could even be as simple as making a certain amount of money. The other half of the goals should involve soft skills that will make the rep a better salesperson or employee. Some examples include:

What’s the best time to run a QBR?

As the name suggests, quarterly business reviews are done four times a year. But it’s also important when a QBR is performed during the quarter.

Prevailing wisdom says to run the QBR as early in the quarter as possible. Try to run your sales QBR within the first 2 weeks of the quarter. That way, the previous quarter is top of mind, and it’s easy to remember what happened, what lead up to notable highs and lows, and other pertinent details. It’s also the ideal time to focus on goals for the next quarter. There’s time to design a strategy and lay the groundwork for new levels of success.

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What tools can I use for a QBR?

For a QBR to be effective, you need a lot of data. To collect and analyze that data efficiently, you need some help. An expertly crafted QBR blueprint will help you plan for a review that’s thorough yet focused.

For help tracking quota attainment (and commission), use QuotaPath. More sales, fewer spreadsheets, and a way to handle tricky calculations without resorting to a single spreadsheet. For more information on setting up QuotaPath before it’s time for your next round of QBRs, create your workspace today.

This blog answers “what does Ops mean?” and how this role translates across industries.

Acronyms and abbreviations exist virtually everywhere, especially in the business world.

These shortened versions of common terms can cause confusion with multiple meanings depending on the industry and context.

For example, if you Google common sales abbreviations like “AE” or “SDR”, without specifying “in sales”, you’ll see that these terms have many meanings beyond Account Executive and Sales Development Rep.

So, it’s not surprising that anyone not familiar with the business world might not know what the abbreviation “Ops” means.

Ops in business is short for operations. This department ensures the organization runs efficiently and profitably and typically falls into functions like Product, Marketing, Revenue, and Sales.

Ops has exploded into popularity in the past few years, and with good reason. 

The call for business efficiencies is especially amid a recession. As of February 2023, for instance, Ops roles dominated job boards, including LinkedIn which had more than 300,000 open roles including

• Operations Manager: 205,427
• Sales Operations: 34,257
• Revenue Operations: 73,470

Searches for other Ops roles yielded similar results, too.

But one thing to remember is that businesses treat and define Ops roles differently according to the industry and size of the company. 

Below, we take a look.

How Ops differs between industries 

Although Ops principles are the same across industries, the specific tasks and challenges Ops teams face can differ significantly. 

Here are some examples of Ops teams across industries:

Retail

Retail Ops teams focus on supply chain management, inventory management, and logistics. They are responsible for ensuring that products are delivered to the right stores at the right time and in the right quantities. They also monitor inventory levels for consistency in customer satisfaction and revenue. Retail Ops teams may also manage third-party logistics and transportation providers to provide timely and cost-effective delivery of goods.

Healthcare

Ops teams in healthcare focus on managing the delivery of patient care and keeping medical facilities running smoothly. Healthcare Ops manage patient flow, staffing, and equipment and supply management. They may also oversee compliance with regulations like HIPPA, ensure patient data security manage procurement, and coordinate seamless patient care with other healthcare providers.

Manufacturing

In manufacturing, Ops teams oversee the production process, uphold quality standards, and orchestrate on-time deliveries. They also lead the supply chain, logistics, inventory management, production planning, workforce management, cost control, and environmental and safety compliance.

Technology

In technology, Ops teams focus on managing the infrastructure that supports software applications and services. They ensure the smooth operation of hardware, software, and networking components and minimize downtime. Sometimes they also manage cloud infrastructure, data centers, and cybersecurity.

Differentiating between various Ops Roles in SaaS

To further complicate the understanding of Ops, Software-as-a-Service (SaaS) companies, have created their own set of business Ops roles such as Sales Ops, RevOps, and more. Take a look. 

Sales Ops  helps Sales achieve and maintain consistent growth by handling activities like sales strategy, territory structure and alignment, sales process optimization, and compensation plans.

Marketing Ops supports the systems and processes necessary for Marketing to successfully perform their roles. The systems and processes marketing ops oversees include user data, forms, conversational marketing, and email operations.

RevOps combines Sales, Marketing, and Support, to increase visibility and communication (and therefore results) by eliminating silos across these departments. RevOps focus on revenue growth and tracking related metrics like customer acquisition, bookings, recurring revenue, customer satisfaction, and churn.

SaaS Ops, a fairly new field, came to exist due to the constant addition of software to company tech stacks. SaaS Ops manages all aspects of SaaS at an organization, including processes such as budgeting and approval, onboarding and offboarding, security risk and compliance management, and SaaS administration automation.

Product Ops oversees activities like market research, quality assurance, and business process improvement to ensure the success of a product.

DevOps creates coordination and collaboration between formerly siloed roles like development, IT operations, quality engineering, and security. DevOps is responsible for activities like application planning, development, and delivery to increase confidence in applications and respond to customer needs to reach business goals faster.

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Ops tools and technologies for SaaS companies and startups 

These Ops teams clearly have a full plate of responsibilities and hardships. But, like the spike in available roles, new tools and technologies have emerged in sidestep.

For example, we sourced a few of the popular tools and technologies commonly used by SaaS and startup Ops teams

Hubspot Sales CRM: Helps sales teams close more deals, manage client relationships, and track team activities.

Trello: A project management platform that provides visibility across relevant tasks, files, and stakeholders, plus the ability to easily update and adjust as priorities change or work is completed. 

Qwilr: Helps sales reps and ops teams effortlessly create proposals and sales materials. One of the more popular sales proposal software options.

Chili Piper: Automates the handoff from Sales to Customer Success to optimize the entire customer journey.

BetterCloud: Streamlines SaaS management by automating onboarding, offboarding, and mid-lifecycle changes, SaaS application access and entitlements, and security policies.

QuotaPath: Automates sales compensation processes and commission tracking and payouts.

Intercom: A customer messaging platform that helps companies engage with their customers in real time.

Mixpanel: An analytics platform that helps companies track user behavior and measure the effectiveness of their product.

These tools can help SaaS companies and startups improve their operations, streamline their workflows, and provide better customer experiences all around.

Now can you answer “what does Ops mean?”

Having read through the nuanced Ops roles from industry to department, you should now feel pretty comfortable telling a friend about the significant role Ops plays in an organization.

As a recap, Ops oversee cost containment, product development, customer satisfaction, efficient workflows and communication across nearly every department within an organization, and, of course, overall profitability.

For additional resources and tools to increase Sales and RevOps efficiencies, check out QuotaPath’s library of tools.

Compensation Hub

Sales Compensation Trends to Know in 2023

Calculate Quota:OTE Ratio

Sales Compensation Calculator

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Guide: How to Build a Compensation Plan Your Sales Team (& Future Investors) Will Love

Sales Commission Tracker Template

About QuotaPath

QuotaPath removes the lift of sales compensation management and commission tracking by automating the process from plan design through earnings payouts.

Sync your CRM, like HubSpot or Salesforce, and give your Sales team immediate access to their real-time and forecasted earnings and attainment. Start a free 30-day trial, or book a time to learn more. 

The coronavirus pandemic transitioned many industries to remote work. As a result, the usage of video software like Zoom and Microsoft Teams skyrocketed.

But even as companies have slowly returned to work over the past year, most have implemented hybrid models that encourage employees to take a few days to work from home.

So, as you continue to host meetings virtually with clients, know that a face-to-face request is 34 times more effective. Still, if you’re still struggling with establishing report with your clients, we’ve got some advice — and some virtual backgrounds — to help!

A virtual background can provide a sense of privacy and show a little brand loyalty and personality on a video conference. Plus, they’re great for hiding a messy office or kids popping their heads into your workspace every 5 minutes. Here’s a list of some dos and don’ts of virtual backgrounds for your sales calls.

The do’s of video conferencing backgrounds

• Do keep it simple.
• Do brand your background. Ask your in-house designer, or check out Canva to create one.
• Do use it to engage your audience. If you’re feeling fancy, use it to highlight a core value, upcoming feature, or a stat that speaks to your audience’s goals. Many companies use split-screen videos as part of their video conferencing tools, as they can be highly effective in comparing your content side-by-side. This, in turn, keeps your audience engaged and facilitates discussions.

The don’ts of video conferencing backgrounds

• Don’t use a distracting background.
• Don’t use a joke background during a serious meeting.
• Don’t use a moving or video background.
• Don’t wear the same color as your background.
• Don’t use a background if you move around a lot.

Although the don’ts aren’t appropriate for those important calls, they can be a fun, expressive way to engage with your internal team. Check out this great round-up of virtual backgrounds.

Here are some free video conferencing backgrounds to download now:

And for all those QuotaPath supporters out there who want to show a little extra love:

HigherPeople had a banner first year.

The talent development startup sprinted past its annual targets in 2022, many thanks to the referrals and word of mouth from CEO and Co-Founder Katy Stover’s professional network. 

But then 2023 planning began — and with it, a goal to double revenue.

Could they lean on Katy’s network to reach it? Sure, they could try.

But Katy and her team, a group of experts who excel in hiring strategies for early-stage startups, recognized the need for a legitimate sales practice.

“It was very clear that in order to grow and expand, we needed to have a true, dedicated salesperson, methodology, and process,” said Katy. “We could stay a small agency, but we would only get so far.”

What to look for in your first sales hire

As such, Katy and her team kicked off the process to bring on their first salesperson, an experienced leader that blends strategic know-how with a hunger to prospect and win business. 

The title? Head of Business Development. 

Katy and co. set out to find a seasoned sales professional capable of building a forecasting model and identifying buyer personas while firing off prospecting messages. A unicorn of sorts in the startup world. 

“We wanted a relationship seller who is strategic, analytical, has a deep understanding of buyer personas and pain points, with proven success in building a team and methodology from the ground up,” said Katy. 

Still, despite what some would consider a tall order of an experienced leader willing to take on outreach efforts, Katy and her team scored a hire quickly. In two months and rigorous rounds of negotiations, HigherPeople had an offer letter signed and returned.

Below, we asked Katy how she hired her first salesperson and how she created an attractive sales leadership compensation package to match. 

How did you start your process to hire your first sales leader? 

Katy: We did what we do with our clients by starting with a “search kickoff.” This is a document that outlines all the things we need: what we’re looking for as far as goals, KPIs, comps, target companies, and personas. Then we build a rubric to assess candidates and assessment criteria to match this rubric. Most of this happens in behavioral interviews but some of it gets covered in a case study.

Our interview process for this role started with a 30-minute interview with me, which often went over because of their questions (which is a good sign for a strategic role). Then they would speak with our Head of Operations. I told them it was a reverse interview so that they could assess our organization to see if they wanted to work here. Then, I would touch base with them again and follow up with a case study. The final step was a panel interview with our recruiting team to check for culture.

What did your case study entail? 

The case study is always the most telling part. It makes or breaks. You really see the difference between a junior-level and a senior-level candidate. We provided two prompts. The first asked them to walk us through how they would grow ARR from our current number to our target. 

When they presented, we assessed presentation skills, analytics, and how they broke down the math to get to the target. Candidates that did not do well gave high-level answers. Meanwhile, senior-level candidates asked for all the data and were very analytical about how to get to the numbers. 

We asked “how would you take this new product to market” for our second prompt with very little information. This one evaluates their startup scrappiness and how to leverage resources in the universe to gather research. 

How did you approach sales compensation for your first sales hire?

Strategic leadership roles are hard, but Sales is especially difficult because there’s so much nuance. We had to talk through who owns a deal, and what happens if this person starts the relationship, then leaves, or is fired. 

Our lawyer educated me through every question.

We also were flexible throughout the negotiation process. Where we landed was different than where we started as we talked with more people and iterated accordingly. 

We ended up with a commission structure that includes a 75% to-goal cliff based on a quarterly quota and a profit-sharing model if HigherPeople hits 100% of our annual target. This combines a short-term KPI with commissions and a long-term KPI in profit-sharing. 

How did you present your sales leadership compensation package to your final candidate?

We came up with three options, which we recommend for early-stage startups. Candidates love it because they feel like they are in control. It allows them to say they care most about equity or a high-base option. 

What did you learn from this hiring and comp planning process?

First, we learned to be nimble on the overall package. What we thought someone would be excited about ended up being different than what candidates really wanted.

Secondly, we learned people really want equity. If companies don’t want to do equity, profit sharing is a much better alternative. They see that money sooner and it’s a much lower-risk option for the business because you’re not giving any percentage away of your company. 

Third, to find the best people, you have to interview various levels of experience. This will help you learn what you want and need.

Lastly, what advice would give startups looking to make their first sales hire?

Titles: Startups are quick to say, “I need a CRO!” as their first hire. But you have to break this down. We went with “head of” because it encompasses someone who is a hunter and someone who is strategic. Early-stage companies sometimes inflate job titles and roles. This can hurt you. CROs don’t expect to be AEs, nor should they. So be careful about titles.

Compensation: Think about short-term vs. long-term incentives and how to capitalize on both without breaking the bank. If your most important goal is to close on a big deal this quarter, then don’t give equity. But if you want them to build a 10-person sales team and formal sales process, then give them short and long-term wins. 

KPIs: Set clear KPIs from day one. Make sure they understand the expectations of the day-to-day role. 

Candidate-driven process: Talk to your candidates. Text them. Be a resource and give feedback if you don’t move forward with them. I want people to come out a raving fan of my company and of me when they go through our interview process. 

The person we moved forward with had two other higher offers and yet he went with us because of our culture and how closely we worked together throughout the process. 

Be a kind, thoughtful human that people want to work with.

* * *

Thank you Katy for sharing your insights! To learn more about HigherPeople, reach out to their team today. 

About QuotaPath

QuotaPath supports growth-stage companies with automated commission tracking and sales compensation management. Sync your CRM and manage your entire sales compensation process within QuotaPath. Increase sales comp visibility to motivate and align your teams.  
To learn more, schedule a time with our team to chat or try QuotaPath for free for 30 days.

The question of who owns compensation planning has grown increasingly puzzling amid organizational restructuring.

Should Finance, Sales, RevOps, HR, or a mix of all four own it?

Turns out, this will depend entirely on the stage and setup of your organization. 

We found in our 2023 Sales Compensation Trends survey at early-stage companies, sales leadership most often owns the process. But as organizations grow, this responsibility shifts to RevOps teams.

Additionally, we found that reps’ trust oscillates based on who builds their compensation plans. For instance, our survey indicated that reps trust sales comp plans the most when built by sales leadership. RevOps-led plans have the second most trust, and Finance with the least.

Still, we believe RevOps should take the lead if your organization includes a RevOps department. RevOps knows the data, sales behaviors, motivators, and business context more than say, Finance. 

If you don’t have a RevOps department yet, then Sales should take the lead. 

But that’s not to say building comp plans should be done in a silo. The best comp plans feature collaboration from Sales and Finance, even HR, as the plan nears finalization.

Below, we outline how to involve each department. 

Involve HR in compensation planning

Your human resources department will likely have the least amount of knowledge when it comes to the intricate comp plan mechanics of your compensation structure. However, HR can play an impactful role in providing industry rates on OTEs and salary structures. 

“Ninety percent of the battles I’ve seen unfold during the comp plan design phase occur over leaders not believing how much companies are paying their reps,” said Kevin McKeown, CRO at Beekeeper, in 4 sales compensation best practices to help you for 2023.

It’s absolutely worth your time to bring HR into the conversation early on to ensure your sales compensation packages are competitive. From there, you can work backward in designating commission rates and quotas. 

Additional Reading: Why gathering rep feedback on sales compensation plans is a RevOps must

Get a pulse check from Finance 

Before you begin drafting your compensation design, consider having a philosophical conversation with your Finance leaders about what you hope to achieve with the new plans.

“I’m coming to the table with the behaviors I’m trying to motivate and some ideas about what I think could motivate those behaviors,” said Sales Consultant Caroline Tarpey, in How Sales and Finance can work better together this comp plan season. 

This step provides an immediate pulse check to see how feasible (or off base) your initial thoughts are. 

QuotaPath VP of Finance Ryan Macia agreed.

“I prefer when Sales comes to us with options and pre-proposals,” Ryan said. “I don’t like starting from scratch. If you can come to me with some concepts that you think will motivate the team, then we can determine if it will break the bottom line.”

But don’t lean too heavily on Finance’s initial inputs. 

“When the Finance team gets too involved, they tend to think about everything from just the cost perspective,” said Kevin. “Comp planning usually goes sideways when someone without a sales mindset is driving the process.”

So, have early conversations about what you’re aiming to achieve with Finance, then begin to shape your sales compensation strategy from there. 

Another way to work well with Finance throughout this process is to run your own pressure tests before handing proposals to them. If you can break the plan ahead of time, you’re saving both yours and Finance’s time. 

What about the entire commission process?

Once you have the plans in motion, which team owns the payout process, plan, and roster changes?

This will likely fall to RevOps, Finance, or a combination of both.

Most of our admin users who run QuotaPath have an Ops background, be it Sales, Finance, or RevOps. 

And at QuotaPath, our RevOps team owns the commission calculations and plan adjustments. All of which is made easier using our own commission tracking software. 

Then, Accounting takes it over for actual commission check payouts.

So, is the answer RevOps?

Yes — and.

If your company includes a RevOps department, RevOps (in close partnership with Sales) should own the comp plan design. 

As for who owns commissions once the plan is in play, we, too, think that RevOps should own the process up until payout. 

Need help with your compensation plan?

We’ve got free resources to help with compensation planning. Start by visiting Compensation Hub, an ungated library of 20 comp plan templates that you can customize and adjust to your business model. 

From there, automate your commission tracking, by saving your plan in QuotaPath and kicking off a free 30-day trial. 

Just want to learn more about automating sales compensation management? Chat with us by scheduling a time with our team.