The standard formula involves dividing the total contract value by the contract length (in months) and then multiplying by 12 to annualize the value. This method ensures a consistent and fair approach to commissioning sales of varying contract durations

Only new contracts are considered for New ACV Commissions, encouraging sales personnel to expand the customer base.

Single Transaction Maximums are set to avoid disproportionately large commissions on mega deals, ensuring fairness and balance across the sales team

Certain products or revenue lines, such as manuals/documentation, currency conversion windfalls, sales through OEMs/resellers, pass-through cloud costs, and expense offset costs, are typically excluded to maintain focus on the core product offerings.

Provisions for clawback are included to account for contract cancellations or non-payments within specified periods, safeguarding the company’s financial interests.

The structure allows for shared credit on orders, particularly in scenarios involving off-territory sales, albeit with strict approval processes and without quota retirement benefits.

New licenses included in contract renewals are regarded as New ACV, incentivizing sales personnel to not only retain customers but also expand account value

Commissions on renewals are contingent upon the product being active, emphasizing the importance of ongoing customer engagement and product utilization.

Additional incentives for upselling or cross-selling during the renewal process encourage sales representatives to continuously seek opportunities for account growth.

A minimum billable rate per hour is enforced to ensure that the value of professional services is accurately reflected in commissions.

Non-professional services, such as education and training, are typically excluded from commission calculations to maintain a focus on high-value service offerings.

Commissions on professional services are contingent upon receipt of payment from the customer, aligning sales incentives with cash flow.