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The AMA Handbook of Due Diligence by Andrew J. Sherman, William M. Crilly

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ENTITY Form 10-05
217
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
COMPENSATION OF DIRECT SALES PERSONNEL
How are corporate direct sales personnel compensated? (1)
How are regional sales managers compensated? (1)
How are local field sales managers compensated? (1)
How are field salespersons compensated? (1)
USE OF QUOTAS
If the above incentive compensation programs are based on the use of “quotas”:
Who establishes quotas? ______________________________________ .
Are quotas set unilaterally or are they negotiated? _________________________ .
Are incentive payments based on monthly, quarterly, or annual performance? _____________ .
DRAWING ACCOUNT
Can direct salespersons draw funds against the incentive portion of their compensation? [ ] Yes [ ] No.
If so, are they required to repay any unearned portion of the draw? [ ] Yes [ ] No.
If not, under what circumstances are they allowed to retain the unearned portion?
COMPETITIVE SITUATION
How do the above compensation programs rank vis-a-vis the major competitors?
[ ] Generally better. [ ] About the same. [ ] Not as favorable.
Note: (1) Describe base salary, commission and other incentive compensation programs.
ENTITY Form 10-06
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
218
MARKETING ORGANIZATION - EXPENSE ACCOUNTS
EXPENSE ALLOWANCES
What type of expense allowances do marketing administrative personnel receive? (1)
What type of expense allowances do field sales personnel receive? (1)
Do marketing administrative personnel receive advances against expenses? [ ] Yes [ ] No.
Do direct sales personnel receive advances against expenses? [ ] Yes [ ] No
Are detailed expense records required to be submitted? [ ] Yes [ ] No.
Does the entity provide automobiles to any marketing or direct sales personnel? [ ] Yes [ ] No.
If so, what positions qualify for the use of a company car?
Are marketing personnel allowed to keep travel incentive awards, such as frequent flyer mileage and frequent
hotel awards for their personal use? [ ] Yes [ ] No
Note: (1) Actual, per diem, other: (specify) ______________________________________________________ .
ENTITY Form 10-07
219
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
MARKETING LOCATIONS AND FACILITIES - DOMESTIC
CITY/STATE QUALIFIED
(1)
SALES OFFICE
(2)
DISTRIBUTOR
OR SALES REP
(3)
CUSTOMER
SERVICE
(4)
Notes: (1) Enter “Yes” if formally qualified to do business in indicated state.
(2) Enter “Corporate”, “Regional”, “State”, or “Local”; as appropriate.
(3) Enter “Distributor”, “Rep”, or “Broker”; as appropriate.
(4) Enter “Own”, or “Contract”; as appropriate.
ENTITY Form 10-08
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
220
MARKETING LOCATIONS AND FACILITIES - FOREIGN
CITY/COUNTRY QUALIFIED
(1)
SALES OFFICE
(2)
DISTRIBUTOR
OR SALES REP
(3)
CUSTOMER
SERVICE
(4)
Notes: (1) Enter “Yes” if formally qualified to do business in indicated country.
(2) Enter “Corporate”, “Regional”, “Country”, or “Local”; as appropriate.
(3) Enter “Distributor”, “Rep”, or “Broker”; as appropriate.
(4) Enter “Own”, or “Contract”; as appropriate.
ENTITY Form 10-09
221
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
MARKETING CHANNELS
DISTRIBUTION CHANNELS
CHANNELS USED YES NO COMMISSION/DISCOUNT
Direct To Consumers
(Mail Order/Manufacturers Stores/Door-To-Door)
Direct To Retailers
(House Account)
Direct To Industrial/Government/Institutional Customers
(House Account)
Through Company Sales Branches And Distribution Centers
(Branch Account)
Through Wholesale Distributors
(Stocking Distributors/Jobbers)
Through Independent Sales Representatives
(Non-Stocking Agents/Brokers)
Other: ____________________________________________
SALES BY DISTRIBUTION CHANNEL
DISTRIBUTION CHANNEL 20___ SALES
($000)
PERCENT OF
TOTAL
Direct To Consumers $ %
Direct To Retailers %
Direct To Industrial/Government/Institutional Customers %
Through Company Sales Branches And Distribution Centers %
Through Wholesale Distributors %
Through Independent Sales Representatives %
Other: ___________________________________________ %
Total $ 100%
COMPARISON WITH MAJOR COMPETITORS
Are entity’s competitors utilizing the same channels, to approximately the same degree? [ ] Yes [ ] No
If not, how do they vary?
Note: Commissions and discounts expressed as a percent of manufacturers list price.

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