Owed commisson

LegacyUser

Hi,

I handed in my notice with my company two weeks ago, i finish up this friday.

Today myself and my manager went through the commission I am owed and how they going to pay it,
I am with the company 7 months now and we originally agreed that they would pay the commission at the end of the year. Which they now plan on doing.

Ever since I handed in my notice they have been very off with me and are not happy.

They are now trying to screw me out of what I am owed.

In my contract it states in writing that I am entitled to "4% of closed sale value,"
they are now telling me I am only entitled to 4% profit margin.
There is nothing whatsoever that states this in my contract. The closed sale value is around €110k across four separate deals. My manager said "ah the profit margin is around 20%,"
how can that even be judged across four separate deals?

I have a feeling they are trying to screw me as I am now leaving the company. Again nothing in my contract states anything about margins,
It is strictly "4% of closed sale value,"
I contacted my solicitor today and sent him a copy of the contract. He told me it was an extreme case of breach of contract and that it is in and white on the contract, in which they wrote and that i signed what I am owed.

Has anyone else ever had any issue like this?

How did you approach it?

whippet

i have been in a sales related field for many years and on revenues of 110k a 4% commission on the revenue would be over €4k ... that seems massive and not the norm. Generally from what I have seen commission is usually a percentage of the gross margin.

However, the wording on your contract sounds strange ... there may be ambiguity as to the term 'value' .. when we talk about sales in our company and someone asks what the 'value' of the sale was we would respond with the gross margin figure as revenue means nothing 'Turnover is vanity .. margin is sanity' ....

The meaning of 'sale value' in your contract could well mean the margin generated from the sale.

Personally I don't know how any company could be paying a 4% turnover commission on low revenues of just over €100k.

What industry is it?

LegacyUser

whippet wrote: »

However, the wording on your contract sounds strange ... there may be ambiguity as to the term 'value' .. when we talk about sales in our company and someone asks what the 'value' of the sale was we would respond with the gross margin figure as revenue means nothing 'Turnover is vanity .. margin is sanity' ....

The meaning of 'sale value' in your contract could well mean the margin generated from the sale.

Their has never been any talk of margin up until now, I know for a fact if I was not leaving the company this would not be an issue.
I remember when I was being offered the job I was enticed by the fact it was sale value,
the contracts of the sales are three year deals.

So we're talking three years of a 110k recurring revenue.

I was always fully aware that I only received commission on the first year but never on margins.

whippet wrote: »

Personally I don't know how any company could be paying a 4% turnover commission on love revenues of just over €100k.

What industry is it?

IT industry. I think one of the major issues is the value,
it is a small firm and my sales have brought a 30% growth to the company this year.

They didn't expect me to get such big numbers,
either way it's what I'm owed.

Bandana boy

billywalsh666 wrote: »

They didn't expect me to get such big numbers,
either way it's what I'm owed.

This looks like minute sales value not big numbers at all.
You have stated that they make about 20% margin
What is your sales basic salary ?

you are just about covering your costs and looking for 4% of turn over
I suspect you have misunderstood the term sales value ,it would be standard in the industry for commission that large to be off Margin not turn over, even more so when talking about a 20% margin product.

Stheno

Yep margin is king in the IT industry, I've never come across sales people paid on gross sale number, just margin

Gran Hermano

Stheno wrote: »

Yep margin is king in the IT industry, I've never come across sales people paid on gross sale number, just margin

If it is a reseller/distributor situation than margin would be normal, if it is an IT company selling their own product I've seen plenty of IT sales people paid on gross sales.

LegacyUser

Bandana boy wrote: »

This looks like minute sales value not big numbers at all.
You have stated that they make about 20% margin
What is your sales basic salary ?

you are just about covering your costs and looking for 4% of turn over
I suspect you have misunderstood the term sales value ,it would be standard in the industry for commission that large to be off Margin not turn over, even more so when talking about a 20% margin product.

My basic salary is 25k,
I understand the numbers aren't big but to this company they are.

I'm the only sales person in there.

Bandana boy

Gran Hermano wrote: »

If it is a reseller/distributor situation than margin would be normal, if it is an IT company selling their own product I've seen plenty of IT sales people paid on gross sales.

As high as 4% ?

Michael D Not Higgins

Bandana boy wrote: »

As high as 4% ?

Considering that works out to 20% of the margin, it does seem ridiculously high.