Discrepancy and clawback management in the Incentives app

Overview

Transactional discrepancies can occur in many forms in a business leading to the altering, or in some case nullification of the sale value.

Let's look at two sets of scenarios to understand this phenomenon.

In one, your sale value changes, but the sale is valid:

Your skilled sales rep convinced your customer to buy more products at the last minute. This is a positive change leading to gain.
Your customer changed their mind for a different product with a different value. This change could be negative leading to a drop in the expected revenue.

Here, the sale is still active but the revenue alone is altered.

In the other, your sale gets nullified altogether:

Your interested prospect suddenly cancelled an order due to personal reasons.
The house in escrow fell out during sanitary investigation.

In the above cases, the sale value plummeted to zero due to external factors, leading for the sale to lose or cancel.

Be it gain, drop, or loss, any change in the finalized transaction would affect the accuracy of the commission value generated as a result of these transactions. Therefore, it is important for businesses to reconcile commissions for the differences and clawback commissions for the cancellations.

Incentives for Zoho CRM comes with two types of retroactive handling of approved commissions: discrepancy resolution and clawback trigger.

Discrepancy resolution

Discrepancy resolution is a way to rebalance the issued commissions after there is a change in the sale value.

Resolving a discrepancy, in a way, is like approving the discrepancy that occurred in the commission. Meaning, you are overriding the previously approved amount to accommodate the difference in the earnings.

Who can resolve a discrepancy?

The Resolve Discrepancy button gets displayed for only the following kinds of users:

Users with Resolve Discrepancy permission in their profile
Admins
Users in the higher order of the hierarchy than the recipient

How to resolve a discrepancy

The ability to resolve a discrepancy appears as a button on the commission record whenever the earnings field gets updated, thereby marking the discrepancy status as observed in the record.

To resolve a discrepancy

Go to the record that had discrepancy. You can identify these records queued under the module view named “Commissions with discrepancy”. By adding the Discrepancy occurred field as part of the column, you can identify the commission records that are met with discrepancies. The records with discrepancy will have this field checked (☑).
Inside the commission record, click the Resolve Discrepancy button displayed in the controls section.
A popup named Resolve Discrepancy with information about the earnings and the transaction will be displayed.

In the Notes section, provide the reason for approving this discrepancy. This is mandatory.
Provide the corrected commission value in the Approved field and click Save.
If you’d like to view the difference in the earnings value and approved value, the same can be tracked from the timeline.
Once the discrepancy is resolved, a payout is generated.

While this discrepancy flow is general, let’s look how this is addressed in the four combination of commissions.

Resolve discrepancies for Total Amount plans with Transaction basis

Commissions for transaction type plans are issued for each transaction the agent makes. When it comes to processing based on total amount, the commission as well as the discrepancy is handled at the level of total amount.

Therefore, the minute the agent makes the transaction, a commission is calculated for the total amount. When there is a discrepancy and if the difference is approved, a child payout carrying the difference alone will be created.

Agent completes a transaction

Commission record created and queued for approval

Approver approves

Payout generated

Discrepancy occurs

Earnings updated, discrepancy occurred field checked, Resolve Discrepancy button appears.

Discrepancy approved

A new discrepancy payout is generated with difference amount (positive or negative) as the act of rebalancing.

Resolving discrepancies for line item plans with transaction basis

Commissions for a line item based transaction plans are processed for each transaction, but commissions and discrepancies are handled for each line item.

In that sense, here’s how the commission discrepancy flow will work for this model:

Agent completes a transaction

Commission record created and queued for approval.

Each participating line item will have commissions applied based on the structure defined as part of their Set.

Approver approves

A consolidated payout is generated

Discrepancy occurs

Earnings and Discrepancy occurred field checked for the respective line item

Resolve Discrepancy button appears with ability to approve the amount for those line items

Discrepancy approved

A new discrepancy payout, with consolidated earnings, is generated with difference amount (positive or negative) as the act of rebalancing.

Resolving discrepancies for total amount plans with quota attainment basis

In this type of plan, the commission is calculated for a target amount. A commission record is created, the accomplishments keep on accruing until the plan schedule is over.

Because this plan evaluates target attainment, a single commission record is only created for all the records created by the recipient that are eligible by the plan. As for discrepancies, an alternate payout with adjustment is issued.

Here’s the flow:

Agent completes a transaction

One commission record is created for the agent for the target they are assigned.

System waits for the quota to be attained or the plan schedule to lapse

Accordingly, the earnings will get updated and queued for approval.

Approver approves

A consolidated payout is generated for all the transactions put together

Discrepancy occurs

Earnings updated, discrepancy occurred field checked, Resolve Discrepancy button appears.

Discrepancy approved

A new discrepancy payout is generated with difference amount (positive or negative) as the act of rebalancing.

Resolving discrepancies for line item plans with quota attainment basis

In this type, commissions are calculated for line items. Therefore, the app will create multiple commission records for each participating line item and the transactions that have those line items are tracked as accomplishments.

Here’s the flow:

Agent meets the event criteria

One commission record is created for each participating line item for the target.

System waits for the quota to be attained or the plan schedule to lapse.

Accordingly, the earnings will get updated and queued for approval.

Approver approves

A payout is generated for each commission record, for each line item.

Discrepancy occurs

Earnings updated, discrepancy occurred field checked, Resolve Discrepancy button appears.

Discrepancy approved

A new discrepancy payout is generated with difference amount (positive or negative) as the act of rebalancing

Recovering commissions using the clawback facility

Clawback is a measure to recover the issued commissions if the transaction got nullified. Irrespective of the commission stage, draft, under review, approved, or payout generated, an organization can recover the commissions from their employees if the sale suddenly fails after issuing of commissions.

Criteria for Clawback: The clawback works based on the clawback criteria from the step 3 of the commission plan configuration.

Unlike discrepancies, if an event that meets the clawback criteria, a negative payout amounting to value 0 is directly created without needing to resolve.

Here’s the flow:

Agent makes a transaction

Approver approves

Payout generated

Sale cancelled; clawback trigger criteria met.

Negative payout created