Company doesn’t pay your commission until your client pays?

how common is this practice? or how common is it for companies to claw back your commission if client doesn't pay? should AEs take this risk seriously in considering a role? 
🧠 Advice
💡 Education/Resources
🤷‍♂ Poll
23
SalesBeast
Politicker
3
Ty
Yes this is somewhat normal. Some companies pay on signature, and others on payment.
Clawback is usually avoidable if you get an annual contract locked in.
Just tell clients all you offer is annual payment terms, or do the assumed annual contract and don’t discuss it and just push 12 month contracts.
NotCreativeEnough
Big Shot
2
Professional Day Ruiner
Pretty standard. I dont get paid until the product ships. Could be 90+ days after the deal is closed.
CuriousFox
WR Officer
2
🦊
Same here. Even though they have started to pay 75% as soon as the order is placed to help us during Covid.
NotCreativeEnough
Big Shot
2
Professional Day Ruiner
Also claw backs are normal in saas roles. Typically you have something like an f9 (first 90 days) plan. Where if the client cancels in the first 90 days you’ll lose your commission since the company doesn’t make any money on that. That’s more standard for an MRR model than ARR model though.
braintank
Politicker
1
Enterprise Account Executive
It's common, but avoidable.
Sunbunny31
Politicker
1
Sr Sales Executive 🐰
We have payment on invoice on contracts of 12 month minimum. Clawbacks theoretically could happen, but since reps don’t get paid until the money is in, they’re not likely.
1nbatopshotfan
Politicker
1
Sales
What are you selling? SaaS, not super duper common, especially enterprise. 

Services or anything with a low margin, yeah get used to it. 
Beans
Big Shot
1
Enterprise Account Executive
This is normal but not standard from my experience, what would bother me more is losing numbers off my quota/target for something that almost always is completely outside of your control post-close. 
Sunbunny31
Politicker
2
Sr Sales Executive 🐰
This was where the renewal quota drove me batty.   Give reps accounts in December, with upcoming renewal for an unhappy customer in January.  You have no chance.  And shame on the division that pushed the customer onto someone else's list so the ones who botched the account aren't getting hit with the improbable renewal.     Anybody here who's in SOPs:  don't do this!
tatertots
Fire Starter
1
AE
There’s the key problem for me. 1. I’ve done my job and performed the labor, I should get paid. 2. The company can recoup its losses through collection and legal recourses, I can’t. 3. The company charges interest for late payments, meanwhile I’m lending my money for free. 4. Whenever I choose to leave, I’ll always be in the negative and won’t be made whole. The business is mitigating its risk off it’s employees’ backs. Not okay.
eljefe
Executive
1
Senior Account Executive
Been in sales 7 years across 4 companies and just ran into it at my newest role. Not happy about it and definitely don't think it's the norm. If you hear about me getting a new job, you'll know why. Very unfair to employees, not our job to be in collections. 
Thatsalesdude
Politicker
1
Account Executive
Mine is end of every quarter after the client pays a month or 2.
TheNegotiator
Arsonist
1
VP of Sales
Super common. Signatures can be (badly) pressure closed, snap decisions, faked.

Makes sense imo- even more considering cashflow and financials from the company’s perspective.
FormerStartupJobHopper
Tycoon
0
AE
Very common. Most of our clients do quarterly payments. My team is held to the first 2 payments, account managment is held to the final 2 payments. Obviously the first one is a given or we never count it, but if the second one bounces, we get 3/4 of the deal clawed back. It sucks but it's logical.

To answer your question, it's probably something I'd ask about in an interview process next time I am job searching
Mobi85
Politicker
0
Regional Sales Manager
Fairly common, and prevents the clawbacks
Justatitle
Big Shot
0
Account Executive
It’s been the norm in my previous 2 companies and current company. It also makes sense. Logically you shouldn’t expect money for something that hasn’t been paid yet. 
AnotherAE244
Politicker
0
Account Executive
We do not get paid until the customer pays and it takes anywhere from 3-6 months. 

It is bs, but I have learned to ask about the commission terms when I am interviewing at other organizations going forward. 
GDO
Politicker
0
BDM
Yeah my previous job did the same
Upper_Class_SaaS
Politicker
0
Account Executive
NO! I know we have claw back if they don't pay tho
justadude
Fire Starter
0
The only sales guy
Indicative of a company that doesn’t value sales people. Probably a founder/CEO who thinks what we do is easy but has never actually done it. Any exec who has been on the battlefield will fight to pay on bookings. I fought this fight when I first joined a company as a VP and we preceded to 3X two years in a row.
justadude
Fire Starter
0
The only sales guy
*proceeded
Arch
Executive
0
Account Executive
In Saas. I’ve always got paid when they sign quote and we ship them software.
IndianaShep
Politicker
0
Director of Sales and Marketing
This is my living hell. I have started putting the responsibility for my check at my projects team's feet. It makes me insane.
CadenceCombat
Tycoon
0
Account Executive
Somewhat normal