Non-Recoverable DrawA non-recoverable draw, often called a non-recoverable draw against commission, is a common element of sales commission plans.
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What is a recoverable draw?
There are two different types of sales commission draws– recoverable and non-recoverable. A recoverable draw against commission is money paid to a sales rep paid from the future commission they earn.
A recoverable draw offers financial support to new or first-time sales reps while they build out their pipeline and get up to speed in their role. By providing advancements on commission, the company helps to ensure that reps are able to cover their basic living expenses while still focusing on growing their business.
We’ve seen a lot of different sales compensation plans during the implementation of Spiff at our clients. Sometimes they want a quick and easy translation from spreadsheets to our object-oriented system or they’re desperate to motivate their reps and ask our advice on how exactly we would do that. While every company has unique needs that fit their situation, our friends at SaaStr have put together a template for SaaS companies to follow.
Spreadsheets are amazing. They have made handling complex mathematical scenario modeling available for everyday people. Through spreadsheets, anybody can handle huge amounts of data from multiple sources, easily manipulate the data, do calculations, summarize, and visualize the results. The learning curve to get started is extremely low, and the possibilities of what you can do are nearly limitless.
As an entrepreneur, I have brainstormed for startup ideas so many times, I’ve lost count. If you’re like me, you’ve probably done a lot of this too. Over the years, I started noticing that what I really wanted to find was an “aha” experience. The exercise became a bit like solving a puzzle.
In the 1970s and 1980s, management consultants used a puzzle to foster creative thinking with clients.