What you motivate sales people for will usually get done.  They pick up on incentive programs very well.  And while they might not necessarily agree with it, you can be assured they study the programs pretty hard and they realize what has to be done in order to generate better income through incentives for them.
So the point is be very careful what you’re motivating them to do.

Most incentives are based upon sales.  In some cases, that can be quite fine.  However, what happens if the company fails to collect on a particular account?  They could be out tens of thousands of dollars on their commission.

Now, you can probably expect to get some pushback on this.  It’s certainly easier for the sales person just to have to be able to make the sales call and get the shipments done.  However, not all shipments are created equal.  The one that you don’t collect on can be very painful.  It might even require that somebody from the company has to step in more to make up for this.

Keeping the incentive towards sales gets them paying attention to the collection process and gets them being careful about what accounts they qualify to bring in to your company.

And the beauty of this is that they can see they are accountable for the credit decision.  They need to focus their time on credit worthy accounts that are likely, with a high degree of probability, to pay them for their particular invoices.  So get the sales people incentivized and have their incentive compensation based on collection not just revenue.

Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
Bringing new insights on results and maximizing company value