The commission processes for MLM and Party Plan Companies are the main attraction for everyone.  Thousands of hours of effort culminate this event, bringing fervor and expectancy from both field organization and company alike.  The validity of the compensation plan and its business processes are uncovered for all to see.  When the experience is successful and as expected, confidence peaks.  When it’s not, the clock begins a fast countdown to disappointment and suspicion.

When home office staff views themselves as a team and when accountability is expected from department heads, problems are taken care of.  When everybody realizes that they play a role in assuring accurate commissions, management magic happens.  Once the main event arrives and obstacles are handled upstream, the burden of the system administrator’s job is lightened.  We preach cooperation and unity, with the successful commission experience as your target.  It’s the main installment in Happy Distributors.

To set the stage for commission processing and checklists, we first make the case for consistency in processes.  The commission process begins the moment a new account is entered, or an order is entered, or credit card information is entered, or adjustments are made, and so forth.  And, the accuracy of a commission run is placed into jeopardy whenever anybody places an order on hold, makes adjustments without understanding all of the implications (and thus, the importance of selecting and training the right people, and then trusting them and holding them accountable), and dozens of touches in the critical path of an account and an order as it navigates through the system.

Accurate commissions truly are the responsibility of every employee.  In the grander scheme, the company has three promises to keep, and all employees are engaged in this quest:

• Product promise (quality product delivered on time)
• Commission promise (accurate commissions paid on time)
• Service promise (caring, competent, consistent service whenever needed)

We can promise you that once you have business processes in place, and your company is consistent in adhering to policies that support these processes, you will obtain consistent results.  Be sensitive to the risks associated with replacing these principles with your own rules that may go outside the framework we have presented in the Business Process Guide. There is much to be learned from those who have gone before you.

Importantly, never, never, never allow policies to dictate.  Encourage innovation, and provide clear channels for improving processes in ways that respond to the recommendations and requests from front-line employees who will always be your best and greatest hope for identifying the gremlins and small nits that often result in great variances away from intended trajectories.  It’s universal that small defects in your processes in the early days of your business will only appear as the company grows.

Instead of looking for people upon whom to heap blame and shame, accept that change will be constant and that great leaders understand and embrace the growth (personal and professional) that comes to all who work together to build a great organization.

The Administration function in MLM and Party Plan Companies refers to the administration of business processes, with the responsibility to ensure business processes are operating properly.  In many organizational charts, Administration refers to the physical plant, office operations, etc.  Both are correct.  In our world, we refer to the System Administrator as the individual who is on the lookout for potential problems that can hold up processes such as unposted orders or shipments that have not been ship verified.

This function is accountable (as an individual administrator as well as a departmental team) to both company management as well as to the distributor force who depend on 24/7 effectiveness of the business processes.

The success of a fast-growth direct selling company is found in its ability to respond to change.  Every direct selling organization has to build into its very structure the management of change.  Forces that affect change in fast-growth MLM and Party Plan companies come from all angles:

• Legally mandated issues such as the “5 customer rule” or the “70% rule”
• Sales-driven challenges that respond to trends and newly discovered sales techniques
• Marketing-based opportunities in an ever-evolving global market based more and more in technology
• Relationship and connection-based situations
• Growth and scale-related demands (including manufacturing, financial, and fulfillment)
• Technology-driven mandates

Regardless of the sources and types of change, adaptation and innovation are essential.  As circumstances require, system administrators can keep up by understanding their business processes and knowing the settings within their enterprise application.  Familiarity with these can alleviate, if not delay, the need for much of the custom programming that is costly and usually aggravating.

The accounting function discloses the grade, whether it’s a “D” or an “A,” of how well your MLM and Party Plan company business processes measure up.  The efforts of everyone within (employees) and without (field organization) your company are posted for display.  The measure of success—the scoreboard— is reported by accounting.

As a generality, the strength of direct selling software applications will not be found in accounting, but in the way that they support accounting and business processes.  One of the activities to build into your launch plan is the task of integrating the summary information into your choice of accounting system, such as Quickbooks^® or PeachTree^®.