Sandler Partners Recovers $2 Million in Agent Commissions

Master agency Sandler Partners on Wednesday said that its Commissions Integrity Program has recovered $2 million for agent partners since the program was introduced in January 2013.

The program proactively audits commissions and SPIFF payments to Sandler Partners’ agent partners. The company is a distributor of connectivity and cloud services.

Alan Sandler, Sandler Partners’ founder and managing partner, tells Channel Partners that missing commissions generally fall into a few buckets — for example, accounts that are sold and turned up, but not paid, often because the provider had not tagged the agent to the account.

Other reasons for missing commissions include: accounts that “fall out” and the agent stops getting paid; accounts that are charged back mistakenly; accounts that are underpaid or paid incorrectly; and accounts that are upsold and not tagged to the agent.

“Commission errors are a symptom of often complex and bureaucratic processes at the provider organizations,” Sandler said. “We’ve opened nearly 8,000 tickets since 2011 for many reasons. When companies merge or acquire, the systems don’t often integrate perfectly and records are not shared correctly. Similarly, some errors are the result of system or software upgrades. We negotiate evergreen payment terms into our contracts, but the commissions team [isn’t] alerted and mistakenly applies the term to our accounts.”{ad}

Incentive programs like bonuses and SPIFFs often are offered, but not tracked correctly, he said. Manual data entry errors also can be a culprit, he said.

“We are empathetic about the challenges providers face in managing the commissions process and are happy to help them,” Sandler said. “In fact, many of them have met with our commissions team to help them pinpoint the errors and how we found them so they can fix them for all partners. In that way, our Commissions Integrity Program benefits the whole channel.”

The $2 million recovery does not count the future compensation partners receive from errors found today.

For Sandler Partners, commission errors are a $750,000 problem per year and growing, Sandler said. Two-thirds of that is recovered proactively versus “them raising their hands and asking us to look into their missing payments,” he said.

“This year is even more — we’re at almost $500,000 recovered proactively for the first half of 2016, so I’d say it’s a substantial problem,” he said. “Further, there is a limited amount of time – 90 days to one year depending on the provider – to issue a ticket for a claim. So, if you are not proactive, the money can be forfeit. In addition to the missing commissions, we help agents to ensure future commissions. Because we are catching the errors quickly, the money found is multiplied by the term of the contract and could be 36 times the amount.”

Drew Kenworthy, accounting and commissions team manager, said Sandler has helped more than 1,000 partners recover unpaid commissions.

“As much as we work with the carriers to fix their individual issues, new ones always seem to pop up!” he said.