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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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8–7. Lengthen the Interval between Commission Payments

Some commissions are paid as frequently as once a week, though monthly payments are the norm in most industries. If there are many employees receiving commission payments, this level of frequency results in a multitude of commission calculations and check payments over the course of a year.

It may be possible in some instances to lengthen the interval between commission payments, reducing the amount of commission calculation and paycheck preparation work for the accounting department. This best practice is only useful in a minority of situations, however, because the commissions of many sales personnel constitute a large proportion of their pay and they cannot afford to wait a long time to receive it. However, there are some instances where salespeople receive only a very small proportion of their pay in the form of commissions. In this situation, it makes little sense to calculate a commission for a very small amount of money and is better to only do it at a longer interval, perhaps quarterly or annually. Though it can be used only in a few cases, this best practice is worth considering.

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