{"id":4813,"date":"2014-03-07T08:20:24","date_gmt":"2014-03-07T06:20:24","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=4813"},"modified":"2014-03-02T13:21:00","modified_gmt":"2014-03-02T11:21:00","slug":"sales-bonuses-based-on-revenue-consider-delaying-their-payment","status":"publish","type":"post","link":"http:\/\/www.officetodo.com\/public\/sales-bonuses-based-on-revenue-consider-delaying-their-payment\/","title":{"rendered":"Sales bonuses based on revenue \u2013 consider delaying their payment"},"content":{"rendered":"

If you\u2019re paying bonuses to your sales personnel based on the revenue they bring in, i.e. new contracts, price increases etc. you ought to think about the risks such bonuses inherently include within.<\/p>\n

The highest risk would be fictitious sales. In this case sales are being manipulated with and falsely created in accounting to earn bonus. Normally such a thing requires cooperation.\u00a0<\/p>\n

That\u2019s the most obvious one of course, however, there\u2019s also the risk new contracts will never bring in money or they will end in a few months after signing the deal. At the end of the day the person signing the contracts and getting bonuses from them steals company funds. How? The scheme would be as follows:<\/p>\n

    \n
  1. Person A signs a contract with person B (both in on the scheme);<\/li>\n
  2. Person A declares a new sale in his or her company;<\/li>\n
  3. Person B is in the contract just long enough for the person A to earn the bonus;<\/li>\n
  4. Person A gets the bonus on his or her bank account and splits it with person B;<\/li>\n
  5. Person B cancels the contract.<\/li>\n<\/ol>\n

    Bonus is paid, no service is actually being provided, no revenue earned.<\/p>\n

    So how would you ensure such thing does not happen? One thing to consider of course is not paying bonuses purely based on the number of new contracts, but also the length they actually buy services and moreover, pay the bonus out in a longer period, i.e. a year. Yes, the sums are smaller as compared to one time payment, but surely a compromise can be achieved so that both parties are happy with the bonus system.<\/p>\n","protected":false},"excerpt":{"rendered":"

    If you\u2019re paying bonuses to your sales personnel based on the revenue they bring in, i.e. new contracts, price increases etc. you ought to think about the risks such bonuses inherently include within. The highest risk would be fictitious sales. In this case sales are being manipulated with and falsely created in accounting to earn […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"class_list":["post-4813","post","type-post","status-publish","format-standard","hentry","category-1-9-payables-to-employees"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t