Plenty of contracts, no clear picture of what is owed
Your team has placed contracts across many clients and several suppliers. Some suppliers pay part of the commission upfront and the rest over the contract. Some pay monthly in arrears based on actual consumption. One pays quarterly. Each contract has its own uplift, agreed at the time of sale and recorded in the contract confirmation.
When the directors ask how much commission is due this quarter, the finance manager opens a spreadsheet that was last fully updated some months ago. It lists contracts and uplifts, but not payment terms, and it does not know about the meters that were added or removed since. The answer comes back as a range with a caveat.
Why expected commission is hard to pin down
Commission is not a single number per contract. It is a stream of payments that depends on several things, some of which change over the contract's life.
- Uplifts are agreed per contract and sometimes per meter.
- Payment terms differ between suppliers and products: upfront, monthly, quarterly or a split.
- Commission may be based on estimated consumption at the start and actual consumption later.
- Meters join and leave contracts, and contracts end early.
- The contract record and the commission record are often separate spreadsheets.
Without a view of what should be paid, there is no way to tell whether what was paid is right.
Cash flow guesswork and missed payments
A broker that cannot forecast commission cannot plan hiring, marketing or cash with confidence. More directly, if you do not know what a supplier should have paid, you cannot notice when a payment is missing or short.
Directors and investors want to see the value of the contract book. A spreadsheet with gaps undersells it, or oversells it. Neither helps when you are making decisions about the business or talking to a lender.
An expected commission ledger per meter
We build a ledger that works out what each contract should pay, from the facts of the contract.
- Each contract is recorded with its supplier, meters, start and end dates, the uplift and the supplier's payment terms for that product.
- Consumption for each meter is taken from the figure agreed in the contract, then updated from actual data, bills or supplier statements as they arrive, according to how that supplier calculates commission.
- The ledger lays out the expected payments per contract and meter: what, from whom and in which period.
- Changes are handled as they happen: meters added or removed, contracts ending early, changes of tenancy, each adjusting future expected payments.
- A forecast view shows expected commission by month and supplier, with the contracts behind each figure.
- Actual payments, once matched from supplier statements, are set against the ledger, leaving a clear outstanding balance per contract.
| Question | Contract spreadsheet | Commission ledger |
|---|---|---|
| What should this contract pay? | Worked out by hand | Calculated from uplift, consumption and terms |
| When is it due? | Not recorded | Scheduled per supplier's terms |
| What is due this quarter? | A range with caveats | Forecast by month and supplier |
| Meter added or removed | Often not reflected | Future payments adjusted |
| What is outstanding? | Unknown | Expected minus matched payments |
The ledger follows the terms in your supplier agreements as you record them. Any question about what an agreement actually means is for your consultancy and its advisers.
A contract book you can put a number on
When the directors ask what is due this quarter, the forecast view gives a figure per supplier, backed by the contracts that produce it. When a supplier statement arrives, it is compared with the ledger rather than simply banked. When a meter leaves a contract, the forecast changes that day, not at year end.
Account managers can see what their contracts are worth over their life, which makes renewal priorities clearer. Finance can plan cash from a forecast rather than a feeling.
Can you say what your contracts should pay?
- You know roughly what you were paid, not what you are owed.
- Supplier payment terms are not recorded against contracts.
- Commission forecasts come with wide caveats.
- Meter changes are not reflected in expected commission.
- Contract and commission records are separate spreadsheets.