How Do You Invoice Clients If You’re Paid on Commission?

Invoicing on Commission: What Makes It Different (and Trickier)

If you’re paid on commission, invoicing can feel strangely backwards. With a standard hourly or fixed-fee arrangement, the math is straightforward: time or deliverables multiplied by an agreed rate, sent on a predictable schedule. Commission flips that simplicity on its head. Your income is tied to outcomes—sales closed, revenue generated, leads converted, renewals completed, bookings filled, deals sourced, or some other measurable result. That means your invoice often depends on numbers that come from someone else’s system, and your payment timeline can be affected by client reporting, approval processes, refunds, chargebacks, and even the client’s own cash flow cycles.

The good news is that commission invoicing doesn’t have to be messy. The secret is structure: define the commission rules clearly, track commissionable events consistently, and invoice with documentation that makes approval easy. Even better, you can do all of this without juggling spreadsheets and complicated templates. Invoice24 is designed to handle exactly the kind of invoicing that comes with real-world businesses—simple when it can be, flexible when it needs to be—so you can invoice commission clients quickly and professionally.

First, Get Crystal Clear on the Commission Agreement

Before you issue a single invoice, make sure the commission arrangement is defined in writing. Many commission disputes aren’t caused by bad intentions; they happen because two people interpreted the same sentence differently. Your invoice should never be the first time a client sees the details of your commission rules.

Here are the most important items to confirm:

1) Commission basis: Are you paid a percentage of gross revenue, net revenue, profit, margin, or a fixed amount per sale? “10% commission” is meaningless unless the basis is defined.

2) Commissionable event: When does commission “trigger”? At contract signature, at invoice issuance to the end-customer, upon receipt of payment from the end-customer, after a return window, or after implementation?

3) Attribution rules: How is credit assigned if multiple people touch the deal? Do you get full commission, split commission, or first-touch/last-touch? What if the client’s internal sales team closes it?

4) Payment schedule: Monthly? Quarterly? Per deal? Net 7/14/30? Are there approval steps that must happen before payment?

5) Adjustments: What happens with refunds, chargebacks, cancellations, and contract downgrades? Is there a clawback? Does commission get adjusted on the next invoice?

6) Caps and thresholds: Is there a minimum performance threshold? Is commission capped? Are there accelerator tiers (e.g., 10% up to £50k, 12% above)?

7) Currency and tax: What currency will you invoice in? Will your invoice include VAT or sales tax? Who is responsible for tax handling?

Once these rules are agreed, invoicing becomes a process rather than a negotiation. With Invoice24, you can create consistent invoices that reflect these terms, reuse saved client details, and generate professional documents that make the commission calculation easy to review.

Choose the Right Commission Invoicing Model

There are several common ways to invoice commission, and the best model depends on how predictable your commission events are and how quickly you can access accurate numbers. Below are the most common models, including when each one works well.

Model 1: Invoice Per Deal or Per Commissionable Event

This model is simplest when commissions are tied to a clear event such as “deal signed” or “customer payment received,” and when there aren’t too many transactions. Each time the commission triggers, you raise an invoice with the details for that deal.

Best for: high-value deals, low volume, clear attribution, minimal adjustments.

Pros: fast payment per deal, simple reconciliation.

Cons: can create many invoices if volume increases; approvals can be repetitive.

With Invoice24, you can produce an invoice quickly by reusing your client record and copying prior invoices as a template, then updating only the deal values and commission line item.

Model 2: Monthly (or Weekly) Commission Summary Invoice

This model works well when you have multiple commissionable events each month. Instead of invoicing per event, you issue one invoice covering the period (e.g., “Commission for December 2025”), and attach a summary or include details in the invoice line items.

Best for: ongoing sales partnerships, recurring referrals, affiliate-style arrangements, and moderate-to-high volume.

Pros: fewer invoices, easier for client accounts payable, consistent schedule.

Cons: requires accurate monthly reporting; disputes can hold up a whole month’s payment if documentation is unclear.

Invoice24 is ideal for this because you can standardise your invoice structure, keep the same wording every month, and maintain a clean record of past invoices for quick reference.

Model 3: Retainer + Commission (Hybrid)

Many commission professionals use a hybrid: a fixed retainer to cover baseline work plus a commission incentive. Invoicing is then split into two sections: the fixed retainer line item and the commission calculation line item.

Best for: consulting + performance, business development services, agency partnerships.

Pros: stable cash flow and less risk; client feels the commission is tied to results.

Cons: must be careful about double-counting or unclear deliverables.

Invoice24 makes hybrid billing straightforward because your invoice can include multiple line items with clear descriptions, dates, and totals—without needing an external template.

Model 4: Advance Commission with True-Up

In some industries, commission is advanced (paid early) and then adjusted later when actual revenue is final. Your invoices might include an “advance” line and then a “true-up” line (positive or negative) on the next invoice based on refunds, changes, or late payments.

Best for: industries with long payment cycles or delayed confirmations.

Pros: you get paid earlier; client smooths cash flow.

Cons: requires excellent tracking; adjustments can get confusing without consistent records.

Invoice24 helps keep these adjustments tidy by maintaining a clear timeline of invoices and allowing you to reference prior invoice numbers in descriptions so everyone knows what is being corrected.

What to Put on a Commission Invoice (So It Gets Approved Fast)

Commission invoices get delayed most often for one reason: the client’s accounts payable team doesn’t understand how you calculated the amount, or they don’t have enough information to verify it. A commission invoice should be readable by someone who wasn’t involved in the deal.

Here’s a practical checklist for what to include:

1) Clear period or trigger event: “Commission for 1–31 December 2025” or “Commission on Deal #A1027 (Signed 10 Dec 2025).”

2) Commission basis statement: “10% of net collected revenue (excluding taxes and refunds).”

3) Deal/customer identifiers: Names, order numbers, invoice IDs, contract IDs, or any internal references your client uses.

4) Calculation summary: For each deal: base amount × rate = commission. If there are tiers, show them clearly.

5) Adjustments (if any): Refunds, chargebacks, cancellations, or clawbacks should be transparent, not hidden in the total.

6) Payment terms: Net 7/14/30, bank details, and due date.

7) Tax details: If you need to charge VAT or sales tax, show your registration number and the tax breakdown. If you don’t charge tax, avoid ambiguous language and note “No VAT charged” where appropriate.

Invoice24 makes it easy to generate professional invoices with all the essentials, so the client can approve quickly without emailing you back for “one more detail.”

Commission Calculations: How to Keep Them Clean and Defensible

Whether you’re invoicing per deal or monthly, commission calculations need to be consistent. The more consistent you are, the fewer disputes you’ll face. Here are practical techniques to keep things clean.

Use a Simple, Standard Calculation Format

Even when commission terms are complex, your presentation shouldn’t be. Use a repeatable pattern:

Base amount: what the commission applies to (e.g., net revenue collected)
Rate: the commission percentage or fixed amount
Commission: base × rate
Adjustments: subtract refunds/chargebacks or add accelerators

Present the final total in one place, but always show how you got there. Clients love clarity because it reduces their risk, and accounts payable teams love it because it reduces their workload.

Separate Sales Tax and Shipping From Commission (If Required)

Many agreements specify that commission is calculated on revenue excluding taxes and pass-through costs like shipping. If your client reports revenue including these items, you should clarify what’s included in the commission base. If the agreement says “net collected revenue excluding VAT,” then your invoice should clearly exclude VAT from the commission base.

Decide How to Handle Partial Payments

If the client’s customer pays in instalments, does your commission pay out per instalment or only once the full amount is received? Both are common. If it’s per instalment, your invoice should mirror the actual collected amounts to avoid overbilling.

Track Refund Windows and Clawbacks

If you earn commission at the time of sale but the client has a 30-day refund policy, you have two options: wait to invoice until the window closes, or invoice immediately with a policy for clawbacks. Many professionals choose the second option for cash flow reasons, but it only works if you’re disciplined about tracking refunds and issuing adjustments.

Invoice24 helps here by keeping your invoice history organised, making it easy to reference the original invoice when issuing a true-up in a later period.

Example Commission Invoice Scenarios (With Wording You Can Adapt)

Below are realistic examples of how commission invoices are commonly described. You can adapt these formats in your Invoice24 line item descriptions.

Scenario A: One Deal, Simple Percentage

Description: Commission on Deal “Acme Annual Plan” (Contract signed 10 Dec 2025). Commission basis: 10% of net contract value excluding taxes. Net contract value: £12,000. Commission: £1,200.

Scenario B: Monthly Summary With Multiple Deals

Description: Sales commission for period 1–31 Dec 2025. Commission basis: 8% of net collected revenue. Summary: Deal A (£5,000 collected), Deal B (£2,500 collected), Deal C (£1,000 collected). Total collected: £8,500. Commission: £680.

Scenario C: Hybrid Retainer + Commission

Line item 1: Monthly business development retainer for Dec 2025: £750.
Line item 2: Commission for Dec 2025 (10% of net collected revenue £6,000): £600.

Scenario D: Refund Adjustment

Description: Commission true-up for refund processed in Dec 2025 related to Invoice #1042 (Deal B). Original commission paid on £2,000 base. Refund amount: £500. Commission adjustment (10%): -£50.

When Should You Invoice Commission: Timing Strategies That Protect You

Timing is one of the biggest levers in commission invoicing. Invoice too early, and you risk disputes or clawbacks. Invoice too late, and you harm your cash flow and create confusion about which period a payment belongs to.

Option 1: Invoice After the Client Confirms Results

In this approach, the client provides a monthly report (or confirms deals) and you invoice based on that. It’s slower, but the invoice is more likely to be approved without question.

Option 2: Invoice on Your Own Tracking, Then Reconcile

If you have solid visibility into deals (for example, you’re deeply involved and have written confirmations), you can invoice as soon as commission triggers. Reconciliation happens later if necessary. This is faster but requires a mature process and strong documentation.

Option 3: Invoice on a Fixed Schedule Regardless of Reporting Delays

This option is common when the agreement specifies a deadline for the client to provide data. For example, the client must provide a report within five business days after month end, and you invoice by the 10th. If the report is late, you still invoice based on available information, with an adjustment later.

Whatever timing strategy you choose, make it consistent. Consistency builds trust, reduces admin, and helps your client plan payment runs.

How to Handle Disputes Without Stopping Your Cash Flow

Commission disputes happen. The key is to handle them without turning every invoice into an argument. Here’s a practical approach:

1) Keep your invoice detail strong: Most disputes disappear when your invoice includes clear identifiers and calculations.

2) Separate disputed items: If the client disputes one deal out of many, don’t let it hold up the whole invoice. Some professionals issue a revised invoice excluding the disputed item and invoice that item separately once resolved. This keeps cash flow moving.

3) Use a formal adjustment process: Treat disputes like accounting entries: resolved items get a true-up on the next invoice. Avoid informal “we’ll just remember it next month” agreements that get forgotten.

4) Keep tone professional and documentation-first: Commission discussions can feel personal. Keep it transactional: data, dates, and terms.

Invoice24 supports a clean process because your invoices remain consistent and easy to reference. When you need to issue a correction, you can clearly cite the prior invoice period and describe the adjustment in a way that accounts payable can follow.

Tax Considerations for Commission Invoices

Tax treatment varies by country and by your business structure, so you should follow local rules and professional advice. That said, there are a few universal principles you should keep in mind when invoicing commission:

1) Commission is typically treated as a service fee: In many jurisdictions, a commission payment is considered compensation for services (sales, referral, brokerage, marketing, consulting). Your invoice should reflect that by describing the service clearly.

2) VAT and sales tax obligations depend on where you and the client are located: Cross-border services can have special rules (reverse charge mechanisms, place of supply rules, etc.). If you’re not charging tax, you may still need specific wording or a VAT number on the invoice.

3) Keep commission base separate from taxes: If the commission is calculated on revenue excluding VAT, make sure you do not accidentally include VAT in the base amount.

Invoice24 helps you keep invoices structured and professional so that tax details, service descriptions, and totals are easy to interpret.

Best Practices for Getting Paid Faster on Commission

Commission earners often face delays because payment relies on approvals and verification. These best practices are designed to reduce friction and speed up payment.

Make Your Invoice Approval-Friendly

Ask yourself: can someone in accounts payable approve this without emailing sales, marketing, or leadership? If not, add the missing details. Include deal identifiers, period coverage, calculation summary, and the commission basis in plain language.

Invoice on a Consistent Schedule

Clients run payment cycles. If you invoice randomly, your invoice might miss the payment run and sit for weeks. A predictable schedule (e.g., first business day of the month) increases the odds you’re paid on time.

Use Clear Payment Terms and Due Dates

“Due on receipt” can work, but it can also create tension if the client expects net terms. Align with the contract and put the due date on the invoice. Clarity wins.

Keep Payment Details Easy

Include the payment method and the exact details required (bank info, reference format, any required purchase order number). Missing payment info is one of the simplest reasons invoices get delayed.

Maintain a Paper Trail for Commissionable Events

Keep confirmations, emails, order references, or system screenshots (where appropriate) so you can support your calculation if a question comes up. The goal is not to “win an argument”; it’s to make approval effortless.

Why Invoice24 Is a Perfect Fit for Commission Invoicing

Commission invoicing needs two things at the same time: flexibility and professionalism. You need to show calculations clearly, invoice on consistent schedules, and handle adjustments when refunds or clawbacks occur. Invoice24 is built to make invoicing simple for everyday use while still giving you the structure you need for complex arrangements like commission.

Here’s how Invoice24 helps commission-based professionals and businesses:

Fast invoice creation: Create an invoice in minutes, reuse client details, and keep your workflow smooth even when you have multiple commission invoices per month.

Professional formatting: Commission invoices need to look credible and clear. Invoice24 produces clean, business-ready invoices that clients can approve quickly.

Flexible line items: Add commission lines, retainers, bonuses, accelerators, and negative adjustments without fighting with a rigid template.

Accurate record keeping: When commission needs a true-up, you can quickly reference past invoices and maintain a tidy invoice history.

Works for simple and complex terms: Whether you’re on a straightforward “10% per sale” arrangement or using tiers, minimums, and clawbacks, Invoice24 supports the structure you need.

While there are many invoicing tools out there, most of them are either too basic for commission detail or overly complicated for everyday use. Invoice24 hits the sweet spot: it’s easy enough to use daily, yet capable enough to handle the real-world complexity of commission billing.

Common Mistakes to Avoid When Invoicing Commission

To finish, here are the most common commission invoicing mistakes that cause delays, disputes, or missed payments—and how to avoid them.

Mistake 1: Invoicing Without a Defined Commission Basis

Never invoice “10% commission” without stating what it’s 10% of. Put the basis on the invoice: net collected revenue, contract value excluding tax, profit margin, or another agreed metric.

Mistake 2: Hiding Adjustments in the Total

If you have a clawback or refund adjustment, show it as a separate line. Transparency builds trust and speeds up approvals.

Mistake 3: Missing Deal Identifiers

If the client can’t match your invoice to their systems, you’ll wait. Include identifiers: order number, customer name, contract ID, internal invoice reference, or whatever the client uses.

Mistake 4: Inconsistent Timing

If you invoice for commission “whenever,” your client’s payment process will treat you as unpredictable. Invoice on a schedule, even if commission amounts vary.

Mistake 5: Not Planning for Refunds and Chargebacks

Refunds are normal. Your invoicing process should expect them. Decide whether you invoice after the return window or invoice immediately with a clear true-up process.

Mistake 6: Overcomplicating the Presentation

Even if your commission agreement is complex, your invoice should be easy to read. Use simple formatting, a clear period, and a calculation summary that anyone can follow.

Putting It All Together

Invoicing clients when you’re paid on commission is all about turning outcomes into a clear, approval-friendly document. Start with a well-defined agreement, pick a commission invoicing model that fits your work, and present your calculations in a consistent, defensible way. Build in a process for adjustments, and you’ll avoid most disputes before they happen.

If you want invoicing to feel effortless—even when your pay is tied to performance—Invoice24 is the simplest way to stay organised, look professional, and get paid without chasing paperwork. Set up your client once, follow a consistent schedule, and let your commission invoices work the way they should: clear, trackable, and easy to approve.