---
title: Best practice guidance for using Sales Commission Splits
description: Used correctly, Sales Commission Splits can be a powerful tool to encourage sales teams to collaborate and reward team based sales efforts.
image: https://www.netcommissions.com/hs-fs/file-21331242-png/images/impact_sales_eligibility_tool_from_sibson.png
---

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# Sales Performance Management Best Practices Blog

# Best practice guidance for using Sales Commission Splits

Posted by [Jerry Hegarty](https://www.netcommissions.com/blog/author/jerry-hegarty) on Fri, Feb 22, 2013 @ 17:02 PM

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Commission splits can be a powerful tool to encourage sales teams to collaborate and reward team based sales efforts. They are common in situations where design and purchasing activities are separated by space and time. A sales rep may be working with an engineering team to get a product designed into a product whose manufacture and/or distribution can occur in a completely different site, state or country.  

As with most elements of the sales compensation process, if done correctly a commission split can be a powerful motivational tool for sales & finance managers. Done incorrectly, they can be a painful source of distraction and lost productivity to your customer facing field sales teams.

We’ve summarized a few Best Practices below to help guide your efforts in developing and deploying this powerful tool.

- Each sales manager involved in a sales credit split should be aware of, collaborate and mutually approve of the split and the contribution percentage.
- The process of initiating, collaborating and approving a split should be documented. 
    - Ideally a mechanism should be in place to support the process from a forms, workflow and audit trail perspective.
    - The use of Spreadsheets and e-mail is still the most common method of administering this process, but [look for opportunities to automate wherever possible](https://www.netcommissions.com/solutions/solutions/), this is especially critical in situations where dispute resolution crops up and can be a major headache to all involved.
    - Have a dispute resolution process in place; ideally a documented dispute resolution policy would guide actions in these situations.
    - Treat situations of credit over-allocation (total sales credit for a transaction > 100%) as an exception that should require buy in and approval from executive sales management and/or finance (Controller/CFO). 
          - Resist as much as possible the temptation to over-allocate commissions, this is a practice that can quickly become a very bad habit and distract sales from custom facing activities to chasing points on split deals.

An interesting piece titled ["](http://www.worldatwork.org/waw/adimComment?&id=66647&from=scf_editorial_4712)**[Using the ‘IMPACT’ Sales Eligibility Tool to Decide Who Gets a Piece of the Pie"](http://www.worldatwork.org/waw/adimComment?&id=66647&from=scf_editorial_4712) **[by Summer F. Barnes and Jonathan Minor](http://www.worldatwork.org/waw/adimComment?&id=66647&from=scf_editorial_4712) over of [Sibson Consulting](http://www.sibson.com/) touches on this topic. While their work focuses on credit eligibility by position and role, it can also be used to guide discussions regarding credit split allocations. They introduce a tool called the 'IMPACT Sales Eligibility Tool' that can be quite useful in credit allocation discussions common with commission splits. Sales executives may find that if they substitute the word **person** for **position;** the tool becomes very relevent to commission split discussions.  

![NetCommissions Sales Compensation Tool](https://www.netcommissions.com/hs-fs/file-21331242-png/images/impact_sales_eligibility_tool_from_sibson.png)

As with any process related to sales compensation, simplicity is your friend. Seek clarity and avoid complexity if it leads to confusion.

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