February is commission month, even if you don't call it that
Every February, a certain kind of customer support ticket shows up on our side. It reads something like: "I promised Alex 5% of lifetime revenue for the clients he brought in, and now the spreadsheet doesn't match what I paid him last year, and he thinks I short-paid him by $1,400, and I can't tell if I did." We see a version of this email roughly 30 times a year, always clustered in January and February.
The problem is not the spreadsheet. The problem is that most small-shop commission arrangements are made on the drive home after a beer, written on a napkin, and then applied inconsistently for the next 36 months. The fix is to move the arrangement somewhere auditable before the first commission event happens, not after.
The four plan types that cover 95% of shops
- Flat bounty: "$200 when their first invoice is paid." Simple, final, no long tail. Good for casual lead-sharing.
- % of lifetime revenue: "8% of every paid invoice forever." Great for senior techs with real books. Costly if an employee leaves; plan for that.
- % for a fixed term: "8% of every paid invoice for the first 18 months." Most common at mid-sized shops. Caps your exposure.
- Per-service commission: "10% on pool, 5% on lawn, 15% on referred new business." More complex, but aligns effort toward the work you actually want to grow.
Clawback is not cruel, it is protective
If a client refunds within 30 days, the commission associated with that refunded revenue should reverse. If you do not have a clawback rule, your first bad-faith customer becomes a net loss on the commission line for the next year. Every experienced commission program has a clawback window — usually 30 or 60 days — and every new shop learns this the hard way.
Servicio has clawback built in as a plan-level config: set the window, and when a refund hits, the system automatically reverses the accrual if we are still inside the window, or flags it for owner review if we are outside. The reversal is visible on the employee statement with a reason, so there is no "did my commission just disappear?" ambiguity.
The "rule snapshot" rule
When you edit a commission plan, do not retroactively change commissions that were already earned. This is the silent version of the February ticket: the owner tweaks a plan to be more generous for new hires, and six months later the spreadsheet has two different numbers for the same employee's same work. Every accrual should store a snapshot of the plan config at the moment it was earned. Servicio does this automatically. If you're building your own tracking, make sure your spreadsheet does it too.
Monthly, not annual
Run commission accounting every month. Not every year. Not every quarter. Monthly. The cost of a monthly review is small; the cost of discovering a $4,000 discrepancy at year-end is a relationship. A monthly statement, with the accruals visible to the employee in their preferred language, is the single change that prevents the February ticket.