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Our small sales team is paid 100% commission on gross margin. Sometimes, we claw back commissions that were paid after the customer is past due and in collections, is this legal?
How do most companies handle sales compensation when there is a write-off for bad debt. Do they charge them back on the cost the company is out, or the gross profit they would have made if the customer paid?
Sometimes customers return products, or they just don’t pay. As a result, some companies do a charge back on commissions paid to the sales person on the sale. The legality of this practice can vary…