What is Sales Crediting?

Palette Team

In the context of sales commissions, crediting is exactly what it sounds like - giving credit to a sales rep for what they sold. Sales crediting is important because it helps make sure that commissions are transparent and sales reps get paid fairly. Credits are simple on the surface, but can become fairly complex once all of the commission plan rules are accounted for. 

It’s important to ensure there is agreement on all of the rules and variables involved in crediting. Even for commission plans with simple rules, the sheer number of variables can introduce complexity. Documentation making it easy for reps and managers alike to quickly reference the rules helps demystify the sales crediting process. 

A common issue with sales crediting is how to handle split commissions. It’s not uncommon to come across companies where sales reps are not credited properly, or where a large number of employees are given credit for deals. In some egregious cases we’ve come across, dozens of employees were given full credit for a deal they spent little to no time working. Sales crediting rules should have a healthy balance, ensuring that reps are credited fairly, but also preventing waste. 

Variables such as differing commission rates by product line, usage-based pricing, and returns or cancellations can all impact crediting calculations. If sales crediting is done manually it will likely also require periodic adjustments and regular audits to uncover any errors. Proper sales crediting requires careful analysis and attention, and automation can help reduce the administrative burden and likelihood of errors when crediting reps.

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