fidelcashflow

Account Executive

No commission until your company gets paid?

Has anyone dealt with this?

My buddy finished out his Q and the CEO is coming back saying they are only paying him on deals that have been paid. I've been closing for years and no one has ever done this to me. When a deal is signed, it's done.

CEO is also hinting that if they aren't paid this month, then he's not getting that money ever. Is this legal?? I looked over the commission agreement and there is nothing stating that the invoice needs to be paid in order to get the payout.

🧠 Advice

🍾 Commission

😡 rant

40 comments

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poweredbycaffeine

WR Lieutenant

☕️

That company is cash poor…

Not to be a broken record, but: what’s the comp plan say?

fidelcashflow

Catalyst

Account Executive

They for sure are not. They are incredibly cheap and just raised not too long ago. Millions in the bank.

Comp plan says as long as they hit their goal of acv, they are to be paid out in 30 days. It’s a very simple comp plan.

unclespacejam

Politicker

ur dad’s brother

Then sounds like they’ve got a shitbag CEO. Tell buddy to run for the hills this won’t be the last time it happens

Gasty

Notable Contributor

War Room Community Manager

True! The CEO might have cash retention plans(maybe from the investors) and this won’t stop. It’ll always feel like “requesting” for earned money!

poweredbycaffeine

WR Lieutenant

☕️

Oooof. Well, here’s my take: your friend needs to employ this mantra.

Fuck You, Pay Me.

CuriousFox

WR Officer

🦊

💯

Beans

Big Shot

Enterprise Account Executive

Pay on PO - it isn't your job to chase down transfers.

Hodgson

Valued Contributor

-3

CEO

Agree that it’s not your job to chase transfers but it is your job to sell products and services that can or will be deliverable/ meet expectations. Signing a massive annual order is a risk to pay out on to a sales guy on signature alone, unless the sales guy doesn’t mind the risk of clawback

fidelcashflow

Catalyst

Account Executive

Not sure what your point is. These customers are just lagging to pay, they are not at risk or threatening to cancel the contract. The product is meeting expectations.

Beans

Big Shot

Enterprise Account Executive

Your reps should know the limitations of their products.
However I'm in SaaS not physical products, so delivery lives Program/CS after signature, there's no reason in my industry to play finance and wait/chase for payment when my time is better spent selling.

Sunbunny31

Politicker

Sr Sales Executive 🐰

I have been at a company where I have been paid after the invoice comes in. It can suck, particularly when the customer’s onboarding process is overly cumbersome. This is more common at smaller companies, where they have a lower ability to absorb missed payments/late payments.

As for whether it’s legal to never pay out - sounds sketchy. What does the comp plan say?

fidelcashflow

Catalyst

Account Executive

I totally get if that’s in the plan, but it’s not in this one to my knowledge.

The plan only says that they need to hit X by X in order to receive commission within 30 days. Just says that only closed deals will count towards the acv goal

unclespacejam

Politicker

ur dad’s brother

This has always been the case for me. Really common in bootstrapped or self funded companies.

It is a FUCKING PAIN IN THE ASS at the worst possible times. Would recommend avoiding when/ if you can

Sunbunny31

Politicker

Sr Sales Executive 🐰

We just went to quarterly payments regardless of payment status. Takes so much of the pain out of wondering when you’ll see a check.

Sunbunny31

Politicker

Sr Sales Executive 🐰

They are not following their own comp plan? That’s no bueno.

fidelcashflow

Catalyst

Account Executive

Again, if it’s in writing, I get it. But it’s not. Plus I just found out that they paid him out on another deal that didn’t pay yet. So they are not consistent. I think they are doing this because he left. So this would be his final commission that they are trying to fuck him on

Sunbunny31

Politicker

Sr Sales Executive 🐰

Oh, he’s gone. Yeah, that becomes a whole other factor. Companies are far likelier to not pay after you leave - some state it flat out in the comp plan. Others indulge in shenanigans. Others have recommended Dan Goodman in these cases. You might want to have your friend connect with him.

jefe

Arsonist

🍁

+1 for Dan on this. They're trying to screw him because they think there won't be any fallout

@fidelcashflow your buddy needs to MAKE THEM PAY

lowhangersalesbanger

Executive

Account Executive

I have seen that done, but I have never seen it done when it wasn't in writing. It is sort of like how comission clawbacks are typically in writing. Is it legal? That is a question for an employment attorney.

FinanceEngineer

Politicker

Sr Director, sales and partnerships

I’ve seen both. What I have also seen are clawback clauses that if the client doesn’t pay, the commission gets clawed back.

Pachacuti

Politicker

They call me Daddy, Sales Daddy

That’s a very common scenario. And it prevents clawbacks.

fidelcashflow

Catalyst

Account Executive

They signed an agreement. How will there be a clawback??

Pachacuti

Politicker

They call me Daddy, Sales Daddy

I have seen it.
One scenario - you sell it, they pay you but screw up the implementation. Customer bolts. Company clawback your commish.

fidelcashflow

Catalyst

Account Executive

I mean sure in that unique situation but 99% of the time, contracts aren’t broken.

jefe

Arsonist

🍁

You'd think so, but I've seen so many colleagues with clawbacks. Haven't been impacted much myself, but it absolutely happens, and a lot more frequently than that.

fidelcashflow

Catalyst

Account Executive

True, I've seen it happen. But even on my side, I think I have had 1 deal that signed and ended up cancelling. Wasn't my fault either.

jefe

Arsonist

🍁

Unfortunately, being paid out after the client pays is quite common.

But that should be in writing. It sounds like he has something else in writing, so this is a load of shit.

pirate

Big Shot

Account Executive

That is weird. But I know someone who vlosed a really big deal and the company did a payment plan for them

fidelcashflow

Catalyst

Account Executive

what 😂 that is insane because the contract was obviously 80%+ more than the commission so I dont even get how that's possible

pirate

Big Shot

Account Executive

I know right

pirate

Big Shot

Account Executive

Maybe it was too keep them there to close big deals forever

Revenue_Rambo

Politicker

Director, Revenue Enablement

I worked for a place that did this BS. It’s completely counter productive. No incentives to sign multi year deals. No incentives for upgrades at renewal.

Their justification was that it made it easier than dealing with clawbacks. 🤦‍♂️

ChumpChange

Politicker

Channel Manager

Screams cash flow issues. Not a good look for your buddy OP.

BigShrimpin

Politicker

Account executive

Pretty common especially if you deal with customers that take forever to pay its annoying but not completely unreasonable at smaller operations

Owner

Common setup - I used to get my flat percentage on the agreement being signed, and kickers (multi-year, annual payment) after first payment

TennisandSales

Politicker

Head Of Sales

yeaahhh my first AE role in Saas was for a small start up and this was the deal. It fucking sucked. every AE had to also be accounts receivable.

We all kept our own spread sheets tracking what we are owed. and not only were we not paid until the company was paid, if they are billing monthly, we only get monthly commissions. that $24K deal is now just 12 $2K deals....

you can imagine how many screw ups came from that.

Diablo

Politicker

Sr. AE

I have heard of it but never been the case for me. It sucks.

StringerBell

Politicker

Account Executive

My first start up was like this.

Hodgson

Valued Contributor

-1

CEO

Sadly clawbacks can happen, particularly in a service based sell. I worked in research for drug development for years and large contracts would get signed, but certain milestones would change and therefore so did the contract value.

fidelcashflow

Catalyst

Account Executive

again, not sure what point you're trying to make. doesn't apply here.