Paying Commission on Go-Live, Not Just on Signature

A signature is a promise, not a delivered outcome. When commission is paid in full the moment a contract is signed, a rep's financial incentive stops the instant the ink dries, even though the company's risk does not. If the deal later unwinds during implementation, or the customer never actually goes live, the company is often left clawing back commission from a rep who has already spent it, which is a worse conversation for everyone than structuring the payout differently from the start.

Most teams that use this model do not defer the entire commission, they split it: a meaningful portion pays at signature to reward the sale itself and keep reps financially motivated to close, with the remainder paying once the deal reaches a defined milestone, usually go-live or the customer's first successful invoice payment. The split keeps skin in the game on both ends of the deal lifecycle instead of only at the start.

Go-live needs a precise, written definition: is it when the customer's account is provisioned, when they complete onboarding, when they process their first real transaction. Write the definition down before the first deal under the new plan closes, and have both sales and the team that actually delivers the milestone, usually implementation or customer success, agree to the same definition. A vague milestone creates exactly the kind of dispute a deferred plan is trying to avoid.

A written go-live definition should specify:

• The exact event that counts as the milestone, such as account provisioning, completed onboarding or the first real transaction.
• Which team confirms the milestone, usually implementation or customer success, and how sales can see that confirmation.
• Who agreed to the definition, with both sales and the delivery team signing off before the first deal closes under the plan.
• What happens when the customer causes the delay, including a reasonable service level after which the deferred commission is released.
• How the deferred portion is treated if the milestone never happens, such as standard clawback treatment or no release.

If a customer takes months to schedule their own onboarding call, that delay should not indefinitely hold hostage commission a rep otherwise earned fairly. Build in a reasonable service level for how long the company has to reach the milestone before the deferred portion pays out anyway, so long as the delay is documented as customer-caused rather than a failure on the company's side to deliver what was sold.

A deferred payout structure changes a rep's early cash flow, especially in the first few months on the job, so explain it clearly during hiring, not after someone's first paycheck comes in lighter than they expected. Reps who understand the structure going in generally accept it without complaint; reps who discover it after the fact assume something went wrong with their pay.

A deal that has signed but not yet reached the milestone occupies an awkward middle ground in most sales reporting: it is a real, closed contract for revenue recognition purposes, but the rep has not yet been fully paid on it, and a leaderboard that only counts fully paid deals can make a strong closer look artificially quiet for a stretch while their deferred pipeline works its way toward go-live. Decide explicitly whether leaderboards and internal recognition track signed deals or fully realized ones, and be consistent about it so reps are not left guessing which number actually counts.

This matters more than it first appears, since public recognition and a rep's sense of standing on the team often run on a faster cycle than the deferred commission itself. A rep who closed a strong quarter of business that has not yet gone live can feel invisible on a milestone-only leaderboard even though their actual selling performance was excellent, which undercuts the very motivation a well-designed comp plan is supposed to protect. Track and celebrate signed volume separately from paid volume so both signals stay visible.