In today’s interconnected world, multinational sales organizations operate in increasingly complex multi-country sales environments. Balancing compliance, fairness, and performance in global crediting models is more important than ever before.

The truth is that countries around the world are rarely held together by a single hierarchical crediting ownership structure. Instead, sales go through a seemingly endless combination of internal entities with competing account ownership structures.

Deals are often won in one country and serviced or delivered in another, further complicating the matter. Navigating this complexity can mean the difference between a compliant, high-performing sales organization and one exposed to risk from disputes, compliance fines, and operational inefficiencies.

So how do global organizations manage compliance and performance in their sales crediting models while maintaining fairness for all sellers? In this article, we’ll explore this question and provide real-world best practices and examples.

The Complex Reality of Multi-Country Sales Crediting

Global sales teams seldom have the luxury of a straightforward organization chart with crediting ownership working from the top down. Instead, multinational sales operations regularly contend with many additional layers of complexity, such as:

Cross-border sales: Deals won in one country, fulfilled or serviced in another.

a. Multiple entities: Joint ventures, subsidiaries, and multiple layers of entities can obscure account ownership.

b. Differing regulations: Labor, tax reporting, and information disclosure laws vary by country.

c. Currency and reporting: Currency fluctuations and reporting standards make calculations more complex.

Together, these forces conspire to make multi-country sales crediting anything but straightforward. Applying uniform crediting policies across the organization is not just ineffective but also, in many cases, non-compliant with local labor and tax laws.

Example 1: A multinational technology company selling software to financial services customers had complex cross-border sales. Buyers negotiated with local sales teams but approved contracts centrally. This resulted in regular disputes between country managers and global contract managers.

As you can see, these examples demonstrate the reality: simple sales crediting policies no longer work in most global organizations. The trick is to build a flexible framework that can address the local context and still apply consistent, global crediting standards.

Global Sales Crediting: Balancing Compliance, Fairness, and Performance

Multinational organizations must develop multi-country sales crediting models that address three separate but overlapping dimensions: compliance, fairness, and performance. Let’s dive into each of these in more detail.

Compliance: Guarding the Organization at All Levels

a. Compliance is, of course, the bedrock of every sales crediting model. For global organizations, compliance spans several areas, including:

b. Labor laws – Laws and regulations related to incentive payments and disclosure requirements can vary. For example, Germany has strict requirements around incentive plan transparency to meet works council standards.

c. Tax reporting – Some countries, such as those in Latin America, tie commissions directly to payroll, increasing the need for precise crediting and withholding.

d. Anti-bribery and corruption regulations – Crediting must not create conflicts of interest, especially when deals involve public sector clients in various countries.

Example 2: A global pharmaceutical company with subsidiaries in Europe and Asia faced compliance challenges due to different labor and tax reporting laws. To address this, they created country-specific crediting compliance checklists. Each crediting rule had to map back to a specific compliance requirement, and both were reviewed every quarter to ensure ongoing alignment.

Best practice in this case is that each crediting rule needs to map to a compliance requirement at some level. Regularly scheduled reviews should ensure ongoing compliance as local regulations evolve.

Fairness: Building and Maintaining Trust with Sellers

Fairness, the other side of the coin, is essential in any sales crediting model. The human element of the crediting equation can make or break seller motivation and engagement. Salespeople need to believe the system is transparent and fair and reflects the efforts and value of their work. In a multi-country sales context, fairness is challenged by situations where:

a. Sellers in one country do most of the selling work, but the credit goes to headquarters or a larger region.

b. Country sales leaders feel underserved by global overlay roles managing more significant accounts.

c. Quotas or revenue recognition rules vary between countries, hindering performance.

Example 3: A global technology company with enterprise software sales operations across the Americas faced significant tension and disputes between country sales managers and global overlay teams.

To address this issue, they created dual-credit models that shared credit between the local account executive (AE) and a regional solutions architect. The solution aligned the two roles, reduced disputes, and improved sales engagement.

Ideally, achieving fairness is about finding ways to earn trust from sellers. Tools like clear documentation and transparent crediting rules, shared credit models, and quotas that make sense locally are just a few examples.

Performance: Driving Global Sales Results

The best crediting models in the world are worthless unless they create the intended results for the business. For global organizations, performance requires navigating the gap between global strategy and local execution.

Some organizations have resolved the tension between centralized crediting standards and local execution by combining both. For instance, a global manufacturing company might define the allocation of sales credit between direct and channel teams centrally, while local teams adjust credit splits based on cultural nuances or market characteristics.

Example 4: A multinational industrial equipment manufacturer selling machinery and components to both OEMs and end-users noticed significant friction between global account managers and local distributors.

After surveying sales reps, they found that single-credit crediting discouraged collaboration between the two roles. They transitioned to a shared-credit model where both global and local teams received credit but with performance thresholds encouraging both global and local execution.

Example 4 shows the importance of an outside-in sales strategy. Listening to the needs of sales teams first and developing performance-based solutions leads to buy-in and smoother execution.

Conclusion

Navigating the sales crediting matrix in a global sales organization is rarely a straightforward path. There is rarely one correct answer when addressing questions of seller and account ownership in crediting. Global organizations succeed by bringing compliance, fairness, and performance together in a comprehensive strategy.

Frameworks that support consistent, compliant, and fair crediting models exist. Global organizations that focus on ongoing sales crediting excellence should consider taking the following actions:

1. Create an ICM Sales Governing Framework

Establish a central global governance team focused on defining and enforcing global crediting standards and principles with local compliance teams to adapt and modify crediting rules for specific markets.

2. Standardize but Localize Where Needed

Use a global crediting template but allow localization of credit splits and rules for markets or entities with unique needs and requirements.

3. Automate Where Possible for Transparency

Modern ICM platforms offer benefits like visibility, audit trails, scenario testing, and other features that improve the management of complex global crediting.

4. Communicate with Sellers

Periodic communications about crediting policies and processes help build transparency and trust. Giving sellers visibility into the crediting logic in their territories also helps.

5. Regular Reviews and Iterations

As markets change, regulations shift, and sales strategies evolve, it’s vital to ensure your crediting models evolve as well. Regular audits of crediting logic help ensure they remain current.

The Future of Multi-Country Sales Crediting Models

The challenges of building global sales crediting models that support compliance, fairness, and performance are not going to go away. In fact, given global expansion and increasingly hybrid sales channels, organizations should expect increased complexity in the future.

Organizations with an appetite for AI should also consider the future role AI might play in identifying new disputes, automatically checking for compliance violations, or intelligently assigning credit based on certain triggers. Managing multi-country sales crediting will only get more complex before it gets easier. For now, we know that striking the right balance is as much an art as a science.

In conclusion, global sales organizations will increasingly focus on multi-country sales crediting structures. As the compliance landscape in each country changes, each nation must react to the global models to stay on top of the competition. The companies that recognize this reality and use it to their advantage will be the ones that thrive.