Managing Your Travel Business: Tracking Your Commissions
by John Hawks

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It doesn’t matter how many new clients you attract in 2007, or how much you grow your travel sales overall this year, unless you collect as much of the commissions you’ve generated from these sales!

In practical terms, your sales don’t really count until you’ve deposited your commissions in your bank account.

What steps can you take this year to improve your commission tracking and collections?

Put a reliable system in place to record your commissions every time a sale is made. Whether you use a simple MS Excel spreadsheet, a customer relations management program like ClientEase, or another option, make it a regular habit to post your expected commission payment every time you send a client’s final payment to a supplier. Don’t jot down a Post-It Note or scribble it on your calendar -- instead, note the commissions due in a secure file or system, so that you can begin tracking it over the next few weeks.

In his former life, Woolson worked as a Web developer. He used his expertise to design his own “back office” system to track commission for his sales (and those of his outside agents). Every time a trip is reserved, the agent creates a “contact” that includes the expected commission. When the client returns from the trip, that report is locked and sent to Woolson, where it appears on his screen until he sends a commission check to his agent (or pays himself). “This is a constant reminder as I process the mail each day and each check is applied toward a commission report,” he says.

Learn the payment policies and quirks of your key suppliers. By talking to your district sales manager or the supplier’s agent relations and accounts payable staffers, you should figure out what triggers your commission checks. Will you be paid when the client’s final payment is received, or a certain number of days after the client’s trip ends, or some other standard? Once you know these rules, you’ll do a better job anticipating commissions and monitoring your cash flow -- and, you’ll know when your commissions are officially late!

Check your commission flows on a very regular basis. “Tracking all of this electronically allows us to forecast bookings based on month booked, month traveled, amounts, tour operators, bookings by state, and of course monthly and yearly wrap-ups,” Woolson notes.

When any commission becomes officially overdue, contact the supplier immediately to request your payment. “Commissions which are two weeks past due are manually called into the supplier to verify that our payment was made, reducing the lag time [in collecting commissions],” Woolson says. The longer you allow overdue commissions to age, the greater your risk of losing track of the money! The key is being polite, but firm -- and, don’t make those collection calls until your payments are overdue according to the supplier’s policies, not your own expectations.

NOTE: Woolson plans to re-write the code for his in-house commission tracking program in the future, allowing other agents to use the system in their own businesses via the Internet for a minimum monthly fee. You can see his travel sites at EnchantingIreland.com, EnchantingScotland.com, and EnchantingCaribbean.com.

(Photo credits: ClientEase; stock photo)