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Long-term contracts
Payment timing for multi-year deals
Our sales people sell long-term deals, most of which span several years. When should they be paid for these – upon signing, as invoiced, when revenue is recognized, at completion, or a combination of these?
Paying for long-term contracts
If the sales person is expected to “account-manage” the account and ensure satisfaction throughout delivery (perhaps while also looking for opportunities to expand the business in the account), then payment over the life of the contract would be appropriate…
What is the best way to compensate for multi-year maintenance contracts, including Managed Services?
The first question about the multi-year maintenance contracts is whether the role for which you’re compensating is a new business role or an account management role. If its primary focus is gaining new business…