What auditors ask about commission pay

Why reviewers look at commission pay

Commission pay is worked out from plans, sales data and decisions that often sit outside payroll. A reviewer’s job is to check that what was paid follows from what was agreed. Most of their questions fall into six groups. If you can answer each one from a record, rather than from memory or a rebuilt spreadsheet, the review is usually short.

1. Which plan applied, and who approved it?

Expect to show the plan in force for the period, its version, who approved it and when, and evidence that the seller received or accepted it. Keep old versions; do not overwrite a plan once it has paid.

2. Does the pay tie back to the sales?

A reviewer may pick a payment and ask for the sales behind it, or pick a sale and ask what it paid. Both directions should work. Keep the sales data as it was received, and record corrections as new lines rather than edits.

3. Who can change things?

Show who can change plans, data and amounts, and that the person who prepares a calculation is not the person who approves it. A log of changes, with who made them and when, answers most follow-up questions.

4. How were exceptions handled?

Manual adjustments, holds, overrides and one-off payments draw the most attention. Each one should have a reason, the person who asked for it and the person who approved it.

5. Was what was approved what was paid?

Compare the approved amounts with the file sent to payroll and with payroll’s confirmation. Keep “sent to payroll” and “paid” as separate steps, so a reviewer can see where each amount stood.

6. Can you show it for any period?

Reviewers often look back over earlier periods. Records that are kept, not rewritten, let you show what was known and decided at the time.

A short list to keep ready

• Plan documents, each version, its approval and the seller’s acknowledgement
• Source sales data as received, with corrections as separate lines
• Calculation detail for each person and period
• Adjustments, holds and overrides, with reasons and approvers
• Approval of each calculation run
• The payroll file and payroll’s confirmation
• Who has access to change plans, data and amounts

How RevexOne keeps this record

RevexOne keeps plan versions with their approvals, holds sales as received, links each amount to the sale and rule behind it, stops the person who started a run from approving it, and marks lines as exported and then paid when payroll confirms. You can follow one example in the traced payout tour.

General guidance from the RevexOne team. It is not legal, tax, accounting or audit advice; what your reviewers need depends on your business and where you operate.