Commissions: expected, received and clawed back

Lenders pay late, pay short and occasionally take money back. If the commission ledger does not show it, you find out when a rep asks where their payout is. Every commission in the CRM has an expected amount, a received amount and a status, and payouts follow what the lender actually paid.

• ClawbackA clawback is a funder taking back an ISO's commission because the merchant defaulted or stopped paying within a set window after funding, often 30 to 90 days.
• Commission splitA commission split divides the commission a funder pays on a deal between the house, the closer and any sub-ISO or referral partner, by agreed percentages.
• PointsPoints are ISO commission expressed as a percent of the funded amount: base points paid by the funder plus upsell points from selling above the buy rate.

Marking a deal funded creates a Base commission when there is a base rate and, when there are upsell points, an Upsell commission. Each is expected on the funded date plus the lender's Payout speed (days) in business days (3 if not set), and carries a clawback window of the lender's Clawback window (days) from the funded date.

base     = basis x base %          (basis: funded amount, net funded or payback)
upsell   = basis x upsell points / 100
partner  = commission x partner split %          (off the top)
rep      = (commission - partner) x rep split %
house    = commission - partner - rep

1. 1Open Commissions. Overview shows Expected, Received, Outstanding and Short-paid for the range, a monthly chart and a By lender table.
2. 2Open All commissions and filter by Status, Payment (Still owed, Unpaid, Partly paid, Short-paid), Clawback or lender.
3. 3On a row's menu, click Mark received. Enter Amount received and Date received.
4. 4If the amount is less than what is owed and the lender says that is all, tick This is the lender's final payment. The commission closes as received with a short-pay flagged.

Example: the lender pays the base in full and $1,700 of the $2,000 upsell, final. The upsell shows Short $300.00, and the rep's upsell payout drops in proportion: 900 x 1,700 / 2,000 = $765.

• Dispute records what the lender owes and why (a reason is required). The commission stays open until it is paid or you click Resolve dispute.
• Void is for a commission that will never be paid, for example a deal unwound before funding settled. It is only offered while nothing has been received.

When a funded deal goes to Default, Collections, Legal, Written off or Cancelled, and the date it went bad is on or before the end of the clawback window, its commissions are at risk. The funded deal and the Commissions overview show a clawback exposure warning with the amount, and All commissions marks the rows Clawback risk.

Example: the lender's window is 60 days. The deal funded on March 2, so the window runs to May 1. The merchant defaults on April 20, which is inside it: $3,600 is at risk.

1. 1When the lender actually takes the money back, open the commission's menu and click Record clawback.
2. 2Amount clawed back defaults to what you received (or the expected amount). Set the Date and a Note.
3. 3Click Record clawback. The original is marked Clawed back, a separate clawback row is added, and rep and partner payouts are reduced by the same share.