---
title: The basics for sales compensation plans accounting
description: There are many accounting implications to the design, implementation, and management of sales compensation plans. Here we have just a part of these implications, this will give you an idea of the acco
---

[Blitz Blog](https://commissionsblog.blitzrocks.com)

# [The basics for sales compensation plans accounting](https://commissionsblog.blitzrocks.com/basics-sales-compensation-plans-accounting)

 Written by [Zoe Salinas](https://commissionsblog.blitzrocks.com/author/zoe-salinas) | May 6, 2026 8:24:39 PM

## **Finance and sales coordination**

There are many accounting implications to the design, implementation, and management of sales compensation plans. Here we have just a part of these implications, this will give you an idea of the **accounting panorama** in sales commissions. Plus, you can start planning and changing your commission plan accordingly.

As a sales director, you should review and be **aware of the accounting issues** that affect the design of your sales compensation plans and programs. Also, research about the accounting control and audit triggers for your commissions. And, examine commission accounting processes using a commission tracking software like Blitz.

As more revenues generated, the more commissions your reps will earn. Therefore, sales compensation plans are a direct cost. Also, **part of absorption costing**. The variable costs for sales commissions is a direct product cost. For more commission plan essentials, [click here](https://commissionsblog.blitzrocks.com/commission-plan-essentials?hsLang=en).

The accounting of sales commission expenses has become more challenging and complex for finance leaders. Alignment between sales and finance leaders is critical for organizations. As a matter of fact, organizations should not underestimate the effort and **necessary analysis** of their sales compensation plans and sales data.

### Sales compensation plans are like salaries?

In accounting, sales commissions are not treated as salaries. Commissions only **arise as an expense** when a revenue-producing event occurs. It is common to defer recognition of a sales expense to properly match it with the revenue or profits being produced.

There’s a key point in accounting for sales compensation plans, **the matching principle**. It states that a business books the expense during the period when they are incurred. And, not precisely when the expense happens. And, the matching principle can turn compensation into a differed expense.

Changes in laws regarding revenue recognition also affect how a business accounts for the associated commission expenses. Therefore, commissions should be tracked at a **more detailed level**: impact of all paid commissions, time over which to amortize expense, and contract terms.

And, one of the most important points in accounting for sales compensation plans is to **get data in order.** A sales compensation software accomplishes that. It automates and tracks each step in the commission process. A great solution is Blitz because it avoids all kinds of mistakes and manual errors. [Schedule your demo now](https://www.blitzrocks.com?hsLang=en).

**Source**

Biswas, Bashker. *Compensation and Benefit Design: Applying Finance and Accounting Principles to Global Human Resource Management Systems*. Pearson FT Press, 2015.

 

[View full post](https://commissionsblog.blitzrocks.com/basics-sales-compensation-plans-accounting)

```json
{
  "@context" : "http://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Zoe Salinas"
  },
  "dateModified" : "2026-05-11T20:00:34.520Z",
  "datePublished" : "2026-05-06T20:24:39Z",
  "headline" : "The basics for sales compensation plans accounting",
  "image" : {
    "@type" : "ImageObject",
    "height" : 1178,
    "url" : "https://497782.fs1.hubspotusercontent-na1.net/hubfs/497782/Imported_Blog_Media/sales-compensation-plans-accounting.jpg",
    "width" : 2000
  },
  "mainEntityOfPage" : "https://commissionsblog.blitzrocks.com/basics-sales-compensation-plans-accounting",
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60,
      "url" : "/hs/hsstatic/content_shared_assets/static-1.4092/img/default-amp-logo.png",
      "width" : 60
    },
    "name" : "Blitz Blog"
  }
}
```