The words a comp plan
is written in

The number they are measured against, and what happens either side of it.

• Sales quotaThe number a rep is expected to sell in a period, and the spine of the whole plan.
• AttainmentSales as a percentage of quota. The input almost every other rule reads.
• AcceleratorA higher rate above target. The lever that decides whether overperformance is worth chasing.
• RampReduced quota while a new rep gets productive, and the guarantee that usually rides along.
• Tiered commissionRates that change by band. Whether tiers are retroactive changes the payout enormously.
• Quota reliefLowering a target after the fact, for a reason the rep did not cause.
• SandbaggingHolding a closed deal back to land it in a period where it is worth more.

Money on top of the plan, usually to move behaviour this quarter.

• SPIFFA short, targeted bonus on a specific product or push. Easy to run, easy to lose track of.
• Incentive compensationThe umbrella term for every pound of pay that has to be earned rather than accrued.
• MBOA bonus for hitting agreed objectives rather than a revenue number. Judgement, made payable.
• Draw against commissionAn advance on future commission. Recoverable or not, and the difference is everything.
• President's ClubThe trip for top performers. A real incentive with a real budget line.

Reversals, windows, and the arguments that follow them.

• ClawbackReversing commission already paid. The hardest thing a comp plan does to a person.
• ChargebackThe insurance and payments word for a clawback, usually driven by the carrier's own window.
• Retention windowHow long a deal stays reversible. The single number that decides when money is truly the rep's.
• Windfall clauseThe right to cut commission on a deal nobody planned for. Where uncapped stops being uncapped.
• Commission disputeA rep says the number is wrong. What happens next says more about the plan than the rate does.
• Shadow accountingReps keeping their own spreadsheet because they do not trust yours. A measurable trust failure.

Splits, overrides and territory, which cause more disputes than rates do.

• Commission splitOne deal, several contributors, one pot. The arithmetic is easy and the agreement is not.
• OverrideA percentage paid to a manager on their team's production, layered on top of the rep's own.
• Sales creditingDeciding whose number a deal lands on. Quietly the most contested rule in any plan.
• Sales territoryThe boundary that assigns accounts, and therefore assigns opportunity before anyone sells.
• Residual commissionRecurring payment for as long as the customer keeps paying. Small monthly, large cumulatively.
• Renewal commissionWhat gets paid when a customer re-signs, and who has earned it by then.

The number under the percentage, which is where most plans go wrong.

• Annual contract value (ACV)One year of a contract, normalised. The commission basis most multi-year deals use.
• Monthly recurring revenue (MRR)Predictable revenue per month. A clean metric for boards and a clumsy one for commission.
• Gross margin commissionPaying on profit rather than price. It fixes discounting and requires cost data you may not have.
• Booking vs billingSigned, invoiced and collected are three different moments. Plans that confuse them pay twice.

What finance has to do with the commission after it is earned.

• ASC 606The rule that makes you spread commission cost over the life of the contract you won.
• True-upA correcting payment once the real numbers land. Routine in a good plan, dreaded in a bad one.
• Supplemental wagesThe payroll category commission falls into, and why the tax withheld looks so high.
• Pay periodThe window a pay run covers. Its edges decide which month a deal is paid in.
• Period costAn expense booked in the period it happens. Where commission sits depends on ASC 606.
• Revenue recognitionWhen revenue counts as earned, which is rarely when the money arrives.
• Commission accrualBooking the cost of commission that is owed before it is paid.

The documents and reconciliation that keep a plan honest.

• Sales compensation planThe whole design: quota, rates, timing, reversals. Usually written once and patched for years.
• Plan documentThe signed page a rep can hold you to. Shorter than it should be in most companies.
• Commission statementWhat a rep receives on payday. The only part of the system most of them ever see.
• Commission reconciliationProving what you paid matches what the rules say. The month-end job nobody volunteers for.
• Deal deskThe group that approves non-standard terms, and therefore decides what gets paid on.

The numbers used to decide whether the design is working.

• Sales performance managementThe category name for planning, quota, territory and incentive pay as one system.
• Compensation benchmarkingChecking your pay against the market, and the traps in the survey data.
• Sales capacity planningWorking out how many reps it takes to hit the number, before anyone is hired.
• Win rateDeals won over deals decided. Simple to state and easy to calculate three ways.
• Net revenue retentionWhat last year's customers are worth this year, expansion and churn together.