Hello All,

I have the opportunity to join a company in a newly created role. Since this is a new area for them (Collections), they have asked me to come up with some ideas for my own commission. While that sounds good, obviously it is difficult, not knowing the profit margin they are looking for, etc.

My question is really what are some tried & true programs that benefit the company & myself? I can't come across as wanting too much, but at the same time, I don't want to stunt my own financial growth.



rwwh's picture
Licensee BadgeTraining Badge

I am not experienced in this field, but are you confusing the [i]commission structure[/i] with the actual goals to be met and the actual numbers?

I would guess they want you to propose [i]when[/i] you would get a larger or smaller commission, and that the employer will think of a good commission percentage or amount.

gfg1's picture

Thanks for the reply.

No, no confusion on what they are asking me to do, just on my part as to how to do it! They haven't really been in a transactional environment, so they aren't sure the best way to structure the commission.

In the past I have set commissions for employees, and had substantial input on my own plan, but I already knew the numbers I was working with.

Any basic programs out there? What are some things that managers here are doing or have done?

Mark's picture
Admin Role Badge

Sorry, nope. What kind of industry? I'll ask around.


gfg1's picture

Thanks Mark.

It's a Healthcare Recievables management company.

skwanch's picture

gfg1 -

Sorry for the late reply . . . hopefully this is still of some value.

A standard practice in A/R mgmt is for collections reps to get a percentage of all monies they collect.

To get a sense of what that percentage should be, shop a couple of outsource collection agencies (look on the net or in the yellow pages) to see what kind of percentage they'd charge, and then use that as a metric for how much you can ask for. You'll need to factor in your own base salary (assuming there is one) and other benefits to make the comparison apples-to-apples on a dollar basis, of course. You'll also have to include some basic assumptions (performance goals?) as to how much you'll collect when etc.

You don't have to worry about profit margin etc b/c if you've done your homework correctly, your commission is the cheaper/better alternative to sending receivables out for collection, or worse writing the money off altogether.

A word to the wise - you probably should get a sense of how much due diligence was done with regard to checking credit references etc - no sense in setting numbers on money that's uncollectible due to poor credit policies (or policies not adhered to).

Hope this helps.