The 2011 limit on deductible tax-exempt allowances paid by employers remains unchanged
from 2010: 52 cents for the first 5,000 business kilometres travelled and 46 cents
per km for each additional business kilometre travelled thereafter.
For the Yukon Territory, Northwest Territories and Nunavut, the tax-exempt allowance
is 56 cents for the first 5,000 kilometres driven and 50 cents for each additional
kilometer.
Source: Canada, Department of Finance
Updated January 04, 2011
MEMBERS ONLY: Click here
for a detailed report on Vehicle Costs & Policies including average reimbursement rates
based on type of vehicle and kilometres driven.
Norman Grosman of Grosman, Grosman, & Gale LLP maintains that vehicle allowances
are typically treated as a form of compensation and not usually as a reimbursement
from the employer for the business use of an employee’s vehicle. Many employers
argue that their vehicle allowance obligations cease on termination since the employee
is no longer using their vehicle for business purposes. In the absence of a written
term in the employment contract (e.g. a termination clause that makes it clear that
the vehicle allowance is not part of the severance entitlement) this argument tends
to be rejected by the Courts since most vehicle allowances are treated as part of
an employee′s overall compensation. In other words, vehicle allowance should
be included in an employee′s severance package in most cases (e.g. absent
a contract to the contrary).
Posted
December 14, 2009
The 20010 limit on deductible tax-exempt allowances paid by employers is: 52 cents
for the first 5,000 business kilometres travelled and 46 cents per km for each additional
business kilometre travelled thereafter.
For the Yukon Territory, Northwest Territories and Nunavut, the tax-exempt allowance
is 56 cents for the first 5,000 kilometres driven and 50 cents for each additional
kilometre
Source: Canada, Department
of Finance
Updated January 11, 2010
Limits for previous years can be found by clicking on the relevant year:
For individuals who have entered into a vehicle leasing arrangement after 2008,
the maximum amount that you can deduct every month is $800 (plus applicable federal
and provincial taxes). The maximum allowable interest deduction relating to borrowed
funds used to purchase a vehicle is $300 per month. These limits remain in effect
for 2009. Source
Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also
vans, pickups or panel trucks) will be:
- 50 cents per mile for business miles driven
- 16.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
Source:
http://www.irs.gov/newsroom/article/0,,id=200505,00.html
Limits for previous years can be found by clicking on the relevant year:
CPSA′s 2008/2009 Guide to Vehicle Costs and Policies is based on a survey
of members. This guide features detailed breakdowns of amounts paid for business
vehicle allowances for sales reps and managers, vehicle preferences and equipment,
taxation information along with operating costs for a compact, mid-size, full-size
and passenger vehicles. Cost is $55.00 for members and $95.00 for non-members.
Canadian Automobile Association
CAA has released an updated version of its Driving Costs brochure which can help you calculate how
much it costs to own and operate your vehicle each year. Offers general guidelines
only and the information is from the previous year.
Fuel Consumption Guide Developed by Natural
Resources Canada you can use this tool to compare the fuel consumption of various
makes and models of vehicles for a specific model year and to help you select the
most fuel-efficient vehicle that meets your everyday needs.
Fuel Economy Guide and Calculator
U.S. Department of Energy site allows you to compare the gas mileage (MPG), greenhouse
gas emissions, air pollution ratings, and safety information for new and used cars
and trucks. Side-by-side comparisons of multiple models generated.
Fuel Economy Guide is
available to mobile users and is readily accessible from a mobile device, smart
phone, or personal digital assistant (PDA).
This is a highly specialized area but the following consultants can assist you:
Roger Brown
RG Brown and Associates
Mississauga, ON
Tel: 416.519.5466
Email: rogergbrown@rogers.com
Specializes in assisting employers in both the public and private sectors in the
review of their current business vehicle program, policies and related practices.
Their services include fleet management company selection processes, review and
development of business vehicle policies, the design of business vehicle allowance
programs and policies and conducting industry specific business vehicle program
market surveys.
CarDATA
Oakville, ON
Toll-free: 1-888-471-2266
Email: info@cardata.ca
CarDATA designs vehicle reimbursement solutions for North American companies
Corporate Reimbursement Services Inc.
Corporate Reimbursement Services, Inc.
233 Needham Street
Paragon Towers
Newton, MA 02464
Tel: 888-312-0788
Email: sales@crsinc.com
Corporate Reimbursement Services, Inc. (CRS) is a management consulting firm that
administers highly flexible and customizable vehicle reimbursement programs for
companies with mobile employees.
Runzheimer International
Corporate Headquarters
Runzheimer Park
Rochester, WI
Tel: 262-971-2200;
Toll-free 1-800-263-8762; 262-971-2254 (fax)
Services include review and management of all aspects of a business vehicle program
including the accurate calculation of geographically-sensitive vehicle reimbursements,
risk assessment of driver population; track and documentation of business mileage
and vehicle disposition.
There are a number of iPhone and BlackBerry applications available:
iPhone applications
AccuFuel — Very
basic program. Does not track cost of ownership, cost per mile, detailed chart or
maintenance costs and service reminders.
Car Care —
Expensive but tracks fuel mileage, provides service reminders, and allows you to
account for partial fill ups. Drawbacks include small data screen and scrolling
odometer.
Gas Cubby —
Tracks every fill-up and determines how much you’ve spent, price-per-gallon trends,
mileage, and more. Tracks vehicle maintenance such as oil changes, wiper blades,
accessory installations, and nearly anything else. Easy to use and recommended.
RoadTrip Lite — Tracks fuel mileage for one vehicle and presents info
via a graph or as a number.
MileBug Lite — Allows
you to set up multiple vehicles, IRS compliant and you can define multiple business
rates (reimbursement vs. deduction). Major limitation is you can only track 10 trips.
TravelLog
— Tracks your billable vehicle mileage for business and taxation purposes.
Key features: on-screen report showing all entries logged and percentage of logged
distance vs. total distance, ability to email trip data in CSV format and option
for notation in kilometres or miles.
Tripper Lite
— Features live GPS mileage tracking that records your mileage while you drive.
Supports miles or kilometres. Customizable categories allow for multiple clients
and billing codes.
For the latest reviews about iphone applications visit www.iphoneappreview.com and www.ituneappreviews.com
BlackBerry applications
Mileage Manager — Tracks/calculates amount owed based
on reimbursement rate and odometer readings. Ability to export records in HTML format
for printing or as a CSV file for integration with Microsoft® Excel by email.
Supports a wide range of currencies including Canadian dollar.
MileageTrackerPro — Allows you to tie group trips
together based on client or destinations using predefined or custom categories.
Ability to wirelessly sync mileage information for savings, viewing & printing mileage
reports securely to a secure site.
TrackIt — Tracks an unlimited number of vehicles.
Filters out data to view records for certain vehicles or separate business and personal
records. View statistics about your inputs. Schedule future maintenance and repairs
and set reminders based on a date and/or the vehicle′s odometer.
VehicleTracker — Tracks all repair, maintenance, trip
and expense for multiple vehicles. Log date, description, destination, start and
end mileage, and notes about your business trips for submitting expense or tax reports.
For the latest reviews on BlackBerry applications check out http://software.crackberry.com/homeSoftware.asp
When an automobile is provided to an employee or an individual related to the employee,
Revenue Canada considers the individual to have received two benefits:
(i) Standby charge benefit (which applies when the employee has access to the automobile
for personal use); and
(ii) Operating cost benefit (which applies when the employer pays operating costs
that relate to personal use).
The employer is required to calculate both charges and to report the total to the
employee and to the income tax authorities. The employer must also remit GST/HST
in respect of these benefits.
The following charts show how these charges are calculated:
How to Calculate the Standby Charge
|
Employer-owned automobile Cost of automobile
|
$ |
X 2% |
$A |
|
Employer-leased automobile Monthly lease cost |
$ |
X 2/3 |
$B |
|
No. of days in year auto is available to employee |
|
|
|
divided by 30 |
|
|
= |
|
Round result (with .05 rounded down to the nearest whole number if this fraction
exceeds 1.0 |
=C |
|
(A x C) or (B x C) |
$D |
Reduction for low usage by the employee
|
Personal kilometres
|
|
|
divided by (1,667 x number of months auto was available) |
|
|
= Reduction for low personal use |
E |
= Standby charge before reimbursements
= D x E
|
$ |
|
– Reimbursements to employer during the year
|
$ |
|
= Standby charge |
$ |
- Special rules apply if the employee is employed principally in selling or leasing
automobiles.
- The reduction for low personal use is available only if:
- the employer requires the employee to use the vehicle to carry out employment duties;
- the business use id more than 50%; and,
- personal kilometers average less than 1,667 per month
How to Calculate the Operating Cost Benefit
Basic Calculation
|
Personal kilometers driven during the year
|
|
|
|
x 24 cents* |
|
= Operating cost benefit before reimbursements |
$ |
|
– Reimbursements to employer made before February 15 of the following year
|
$ |
|
= Operating cost benefit
|
$ |
*In 2008, 21 cents for automobile salespeople
Alternative Operating Cost Benefit Calculation
An employee may use this alternative calculation if both:
- the employee uses the automobile less than 50% for business purposes; and,
- the employee requests (in writing before the end of the year) that this method be
used.
|
Standby charge before reimbursements
|
$ |
|
|
x 50% |
|
= Operating cost benefit before reimbursements |
$ |
|
– Reimbursements to employer made before February 15 of the following year
|
$ |
What happens if the employee reimburses the employer?
If before February 15 of the following year, the employee reimburses his or her
employer for all operating expenses attributable to personal use, no operating cost
benefit will be incurred.
Operating costs paid by the employer
|
Gas and oil
|
$ |
|
+ Repairs and maintenance
|
$ |
|
+ Insurance, license and registration |
$ |
|
+ Other operating costs
|
$ |
|
= Total operating costs
|
$ |
|
x Personal km/Total km
|
|
|
= Operating costs attributable to personal use
|
|
Avoiding a Taxable Benefit
An employee can avoid the operating cost benefit charge if they reimburse the employer
100 per cent of the personal use portion of actual operating cost before February
15 of the following year. Payments for operating expenses made directly by the employee
do not reduce the benefit.
Example
Employee uses an employer-provided automobile with the following facts for 2009.
|
Personal use kilometers driven in the year*
|
10,000 km |
|
Total kilometres
|
30,000 |
Operating expenses paid by employer
(including GST/HST & PST)
|
1,000 |
|
Reimbursements to employer
|
Nil |
|
Results:
|
|
The operating cost benefit to the employee is:
|
10,000 km x 24¢ per km = $2,400 |
|
Analysis:
|
|
The portion of operating costs that relate to the employee’s personal use of the
automobile is:
|
10,000 km/30,000 km x $1,000 = $333 |
|
Observations:
|
|
The employee could eliminate a $2,400 operating cost benefit by reimbursing the
employer $333 before February 15 of the following year. Therefore, assuming the
employee’s marginal tax rate is 46%, the employee can save $771($2,200 x 46% - $333).
|
Posted November 30, 2009
MJ Ervin & Associates
has an extensive database of historical retail and wholesale prices and related
margins for gasoline, diesel fuel, furnace fuel, propane, and selected crude oil
posted prices. Online users can search the Gasoline Prices database which provides historical prices
for all grades of gasoline (premium, regular unleaded, mid-grade and regular leaded),
related to wholesale (rack) markets as well as retail for over 60 Canadian cites
on a month-by-month basis. They also provide both Canadian and regional averages.
Updated January 11, 2010
Each used car, truck, and SUV is different and depends upon the vehicle′s
physical and mechanical condition, local market conditions, potential reconditioning
costs, auction results and other factors. Tools such as The Canadian Black Book
and Canadian Red Book serve as guides to car dealers to help them appraise the used
car. These guides provide a starting point to assess the vehicle.
The Canadian Red
Book Online—Subscription service that provides information for Canadian
makes and models on the first of each month, and allows for provincial valuation
adjustments. Additional information includes: retail and wholesale values, VIN identification
section, provincial value conversion chart, major optional equipment charts, and
complete odometer tables. Covers model years from 2009-2002.
The
Canadian Black Book—Updated monthly this wholesale/retail guide offers
a low and a high wholesale value range along with a guideline for retail value for
virtually every model sold in Canada, stretching back 13 model years.
Peak-day surcharges are one of the fastest-growing but least-noticed weapons in
the domestic airlines′ arsenal of "ancillary revenue" sources. Unlike checked
baggage fees and preferred-coach-seat reservation fees, the peak-day surcharges
don′t apply on every flight, so travelers tend not to take note of them when
they are searching for flights and fares.
Domestic air carriers use peak-day surcharges to capitalize on the basic rules of
supply and demand. Peak days are days when the demand for air travel is greatest,
and since the supply of seats generally doesn′t go up much on such days, the
carriers feel justified in charging more for tickets – generally in the range of
$20 to $60 per round-trip ticket.
Introduced late last year during busy holiday travel times, airlines have gradually
been adding them to more dates, perhaps testing how many surcharges the market will
bear. August is the height of the summer vacation travel season, so this year, the
airlines imposed peak-day surcharges every day from August 1 through August 22.
According to data from bestfares.com, the peak-day surcharges will be imposed on
23 days between now and the end of the year, including November 19-29, December
17-24 and December 26-31.
Posted September 7, 2010
The popular website Webflyer.com
has extensive coverage of many aspects of travel loyalty programs. Check out the
Head2Head section (www.webflyer.com/programs/head2head/)
which lets you select any two suppliers listed for a side-by-side comparison of
the programs′ major features. The companies whose loyalty plans are available
for comparison include a dozen airlines, seven major hotel groups, and two credit
card companies. In addition to evaluating the pros and cons of whichever two programs
you want to compare, the site also provides overall user ratings for the programs.
Several airlines have added in-flight Wi-Fi services to their fleets and many more
plan to do so in the future. Business travellers can save between $10-12 per flight
by signing up with Gogo
a company which offers unlimited-use monthly subscriptions. Gogo is offered on all AirTran and Virgin America planes,
and on some flights of Air Canada, Alaska, American, Delta, US Airways and United.
The company is charging $34.95 a month for the unlimited service plan – although
new subscribers can get their first month for $19.95 USD. Subscribers can cancel
it at any time.
In addition to single-use fees (which range from $4.95 to $12.95 per flight, depending
on distance and the device used to connect), the company also offers different pass
options. You can get a 24-hour pass for $12.95 for travel on Delta, Virgin or AirTran;
a one-time 30-day single-airline pass good on any one of those three airlines or
American for $29.95; or a 30-day pass good on all of four carriers for $39.95 (all
these options must be purchased in-flight).
Posted July 19, 2010
Many U.S. states have legislation already in place that bans the usage of cell phones
and other handheld devices while driving.
The Governors Highway Safety Association
has created a
chart that outlines all state-level cell phone and text messaging laws and
the driver categories that they apply to. Some local jurisdictions have additional
regulations that need to be observed.
What is also interesting about this chart is it indicates which states include a
category for cell phone/electronic equipment distraction on police accident report
forms. Recently federal legislation was introduced to require states to collect
this data in order to qualify for certain federal funding.
Posted May 24, 2010
There are several excellent websites plus a host of iPhone and BlackBerry applications.
Traffic.com has updates on
driving conditions in and around 52 U.S. cities. You can get a general overview,
with maps, or you can input specific driving routes and ask for alerts and alternate
routes if there’s a problem.
For drivers who need updates in real time, the site recently developed new applications
for the iPhone and the BlackBerry. You can find out more about them at http://bhelp.traffic.com/features-mobile-web .
Telenav is a GPS navigation
service that provides
traffic updates for mobile phones.
Rand McNally, the world renowned mapping icon also has a traffic information service for mobile phones.
Posted May 24, 2010
Airlines continue to implement and change baggage fees, adding to the overall cost
of air travel in their efforts to additional revenues. Keeping track of these changes
is often difficult for business travellers as airlines announce new policies or
amend existing ones.
Luggage Limits is a
terrific site where once you type in your airline, departure airport and arrival
airport, it will give you the specific carry-on and checked baggage rules for your
flight, including current fees for checked luggage.
Farecompare.com, has compiled
a handy
chart that lists the number of bags travellers are allowed, the maximum
total dimensions, and the weight. Results are presented for U.S. carriers and each
listing is linked to that airline’s web page with more specifics of its baggage
policies.
Posted May 10, 2010
There are several websites where you go to help you keep on top of things once you
arrive at your destination:
www.ifly.com The home page for
ifly.com looks like it provides information only on U.S. airports, but it covers
airports worldwide as well; hold your cursor on the word “Home” on the top menu
bar and you’ll see a menu that includes international airports. Useful features
include real-time information on current arrivals/departures.
Another good resource the airport information section of the global reservations system
Amadeus, which offers compact descriptions on airports worldwide, including airport
hotel options and local transportation.
The giant Sabre reservations system also has an airport information section, although it has a lot more
detail on U.S. airports – which restaurants and shops are in which terminals, for
instance -- than on overseas facilities.
iPhone Applications
Airport Maps will provide you with maps of the terminal, pinpointing restaurants
and shops inside of it.
Flight Update allows you to track
incoming flights and stay on the top of things at airports. Provides you with seating
charts and even meals in your flight.
Airport Maps shows you where
you can locate food outlets and restaurants at your airport. The app provides a
map of the airport, so you know where to go right away once you deplane.
Gate
Guru lets you check up on what the best food, stores, and services are available
at your gate.
iFly Pro covers 350 airports,
and it includes information on restaurants, parking maps, retail stores, and so
on. It also provides a rough idea as to what you can expect to pay for parking.
GPS-Eat-Shop This app comes with
a collection of tools to help you find places to shop, eat, and even workout.
Airport WiFi has over 11,000+
airports covered and tells you which one has free Wi-Fi.
Posted May 10, 2010
Canadian Driver Magazine—Independent
online automotive magazine featuring new vehicle reviews and test drives, along
with an annual Buyer′s Guide, pricing, specifications and images. All articles
on Canadian Driver
are written by accredited automotive journalists.
Lemon Aid Used Car Guide—Aimed
at consumers and provides information specifically on prices and defects relative
to cars, trucks, SUVs, vans, and minivans produced between 1987-2007. Ratings are
based on upon over 800,000 owners reports, government-recorded safety complaints,
and confidential automaker service bulletins. A "must have" when shopping for a
used vehicle.
Consumer Guide—Publication
offers Best Buy and Recommended picks in 18 distinct vehicle classes. Also includes
professional, unbiased evaluations of nearly 1,000 new and used vehicles along with
shopping tips, timely feature articles, and insightful automotive editorials.
Employers cannot be forced to provide a letter of reference, much less a subjective
and positive letter of reference.
However, particularly if your employer has promised to provide you with a letter
of reference to support your search for alternative employment, a court might well
determine that their failure to live up to that promise should be recognized in
the form of additional compensation payable to you. Courts are often prepared to
reason that the failure to provide a substantive letter of reference, particularly
in circumstances where it was promised, has added to the difficulty and length of
the search for alternative employment and, hence, can easily rationalize providing
an increased notice period or compensation to the terminated employee.
Unfortunately, short of pursuing litigation against your former employer, there
is no agency or easy route through which you can enforce the promise.
Submitted by Norman Grosman, Senior Partner, Grosman, Grosman & Gale - Employment
Lawyers. This article was originally available at workopolis.com and has been reprinted with permission.
It is, practically speaking, not possible to compel a former employer to provide
you with a substantive and positive reference.
Occasionally, courts have sanctioned the failure of a former employer to provide
a positive letter of reference to a deserving employee, reasoning that the failure
to do so likely extended the time required to search for alternative employment.
In these cases, courts have added an incremental two to three months to what otherwise
would have been a fair notice period, in the circumstances.
If your former employer will only provide a "neutral" letter of reference, consider
using prior performance reviews as to augment any material you send to prospective
employers. Also consider asking your former employer to add a paragraph to the “neutral”
letter, indicating that it is their policy only to provide such limited information
in the form of a reference. This will reduce the likelihood that a third party reading
the letter will draw any negative or inappropriate inference from the limited information
provided.
Submitted by Norman Grosman, Senior Partner, Grosman, Grosman & Gale - Employment
Lawyers. This article was originally available at workopolis.com and has been reprinted with permission.
The short answer to this question is yes. When applying for Employment Insurance
benefits you need to supply a Record of Employment (ROE) from your employer. The
ROE needs to include the following details regarding your most recent employment:
your total salary before deductions including tips and commissions, your salary
before deductions for your last week of work — from Sunday to your last day worked
— gross amounts received or to be received: vacation pay, severance pay, pension,
pay in lieu of notice or lay off and other monies.
The employer′s goal in the hiring process is to select those candidates who
possess the knowledge, skills and abilities or other attributes and competencies
that lead to successful job performance. Many employers use a variety of psychological
and skill-based assessments to assess a candidate′s performance or capacity.
Whenever possible employers should provide feedback to applicants on their test
performance or on any decisions they have made based on results, unless this right
has been waived by the candidate or is prohibited by law. However many companies
do not provide candidates with feedback about how they did on these tests.
Updated January 11, 2010
Since you will be resident in Canada but making frequent trips to the United States
to conduct business on behalf of the company and its customers, you will require
a B-1 Business Visitor Visa. A B-1 Visa is required for Canadian residents wishing
to enter the United States to conduct general business-like activities.
Under the North American Free Trade Agreement (NAFTA), salespeople with B-1 status
may perform the following activities:
- Attend business meetings
- Consult with associates
- Attend business conferences and conventions
- Negotiate contracts
- Investigate business opportunities
- Purchase property in the U.S Research and design, including technical, scientific,
and statistical research
- Growth, manufacturing, and production, including harvest owners supervising harvesting
crews and purchasing and production management personnel conducting commercial transactions
- Marketing, including market researchers and analysts and trade fair and promotional
personnel attending trade conventions.
- Sales, including sales representatives and agents taking orders and negotiating
contracts for goods or services, but not delivering goods or providing services;
buyers purchasing for an enterprise located in Canada
- Distribution, including transportation operators delivering to, or loading and transporting
from Canada or the United States, with no intermediate loading or delivery within
the United States; customs brokers performing brokerage duties associated with the
export of goods
- After-sales service, including installers, repair and maintenance personnel, and
supervisors possessing specialized knowledge essential to the seller's contractual
obligation, performing services or training workers to perform such services pursuant
to a warranty or other service contract incidental to the sale of commercial or
industrial equipment or machinery, including computer software purchased from an
enterprise located outside the country, during the life of the warranty or service
agreement.
How to Obtain B-1 status
Canadian citizens may obtain a B-1 Visa at a U.S/Canadian port of entry. You will
need to provide some of the following to support your application:
- Evidence of ties to Canada such as bank records, deed to property etc.
- Evidence of close family relatives
- Property deeds and any other documentation that shows that the applicant will return
to Canada before or upon the expiry of B-1 status.
- Documents showing that the applicant will be engaging in permissible B-1 activities
(see above)
I would also recommend that you ask to be paid in Canadian dollars. If you are paid
in US funds you will need to keep track of the Canadian dollar value when you receive
your pay cheques which will enable you to correctly declare your income for the
year to Revenue Canada.
Updated January 25, 2010
The Women in Technology networking group has a
Toronto chapter that features upcoming events and contact information. I
recommend that you get in touch with the chairperson and outline your request.
There are many online sources ranging from blogs to online magazines and forums.
Listed below are some trusted sites resources to get you started.
CRM Knowledge Base —Highly
valuable portal whose chief benefit is how it organizes CRM-related information
into various components such as business intelligence, call centers, sales force
automation and others. It also offers links to resources to books, industry articles,
vendor white papers and software solutions.
CRM Community —Features
the latest developments and announcements in the CRM community. The site also features
an online directory of software solutions for SFA, CRM suites, contact management
software and hosted CRM solutions.
CRM Daily —Offers the latest in CRM news and visitors
can sign up to receive
CRM Daily enewsletter. News stories grouped by topics--CRM Systems, sales
and marketing, business intelligence and more.
Mycustomer.com —Formerly
know as the CRM Forum, this is an industry site for CRM professionals on both the
demand and supply side of the industry. The library area of the site is quite useful
with a selection of papers by leading CRM academics, case studies, conference presentations,
and vendor papers.
Customer Think —Formerly
known as CRM Guru, you can access online reports and archives plus participate in
live webcasts. Contains detailed resources on CRM strategy, metrics, alignment,
redesign and technology.
CRMProject.com
—Site provides top-level analysis and best-of-breed solutions by making available
white papers, articles and other reports from leading suppliers, academics, and
CRM practitioners.
CRMExchange —Site
facilitates an exchange of information on customer relationship management (CRM),
sales, call center, and telemarketing issues.
DestinationCRM —Great
site to start initial research if you have identified customer relationship management
(CRM) as a key strategy for creating enhanced customer value. Content crosses many
industries including technology, communications, finance, retail, advertising, and
healthcare. Notably, the site features a Decision Analysis Toolkit, and a useful
database of CRM-related service providers.
eCRMGuide —Customer
relationship management and e-business news reviews.
According to research by Gartner, Canada lags behind the United States
in the adoption of CRM technology. While no figures on CRM adoption were quoted
in their research, in a CPSA roundtable on sales metrics and reporting held in 2008,
82% of Canadian companies use some form of SFA or CRM system.
This is a really interesting and complicated issue as there are several factors
and questions that need to be taken into consideration namely:
- Was an agreement signed between the vendor and supplier that outlined rights/ownership
concerning intellectual property or industrial design with respect to the product?
- Was any non-recoverable expenses charged for the development? Was there a non-disclosure
agreement in place?
- Does the design incorporate proprietary elements that are exclusive to the client
alone or are they more industry specific?
- Was this product exclusively designed for the client knowing that they would have
exclusive rights to the product?
- What would be the "best" way to handle this issue with the client moving forward?
CRM Community Industrial design is an incredibly complicated area under intellectual
property law which is why the Canadian Intellectual Property Office has created
a Guide to Industrial Design and features a Frequently Asked Questions to answer basic questions
this area of law.
The first step would be to start would start with the agreement (implied or written)
with the client and use this as your starting point. If the client uses this product
(a durable good) and treats it like a unique sales proposition (USP) in their marketplace,
then you have a serious problem.
If a client has asked for a unique solution to solve another issue (special conveyor
system to move product in a factory) that system is not exclusive to the client
in the sense that it is a USP to the marketplace, just a better way to move product
in the manufacturing process, you need to involve senior management and revisit
the issue with your client. It is not worth damaging your reputation and integrity
or that of your company’s’ by jumping the gun.
Additional Resources
CPSA′s Sales Institute Code of
Ethics
"Ethical Sales Practices" Contact Magazine
Fall 2008
For the record, the Income Tax Act requires each person who carries on a business
to keep complete books and records. Your records should be up-to-date. You should
have invoices to prove your expenses and your revenue. Generally you need to keep
your records for six years from the time you file your tax returns. Some records
have to be kept longer.
Rosen and Associates, a leading forensic and investigative accounting firm based
in Toronto offers the following tips to help you survive the process:
1. When the phone rings The tax auditor will normally telephone you to arrange an
appointment. Although he or she may ask to come in the next day, the department
seldom expects you to say yes for a number of practical reasons.
2. Asking for an extension If, for example, you are extremely busy in the plant
or the store because of the season, or if you have a busy travel timetable and you
wish to be available while the audit is taking place, ask for an extension. You
will generally get it if you have a good reason.
3. Making the job easier It may be that, like many business people, you have no
detailed knowledge of the records, and you will need time to reach your bookkeeper
(especially if your bookkeeper is part-time) or your accountant, to get them to
gather the appropriate records together for the tax auditor. This will make the
job easier for the tax auditor as well.
4. Ask questions Ask what taxation years are being audited and, if you have more
than one business, which business is under review. Usually the tax auditor will
look at two or three taxation years. This will save you the cost of digging out
back records that are not necessary. Tax auditors can only go back four years, unless
they suspect fraud, in which case they can go back further.
5. Justifying the audit The tax auditor will usually spend three to four days on
an average small business file where the job involves two taxation years. That is
general. However, the auditor could spend as little as a day or as long as several
weeks. The longer they spend, the harder they will look for things to justify the
audit to the supervisor. That is human nature. For that reason you want to pin down
the exact taxation years and have complete records available for those years.
6. Discouraging fishing expeditions It is very unusual for the auditor to look at
records for the current year that hasn′t yet been filed. Providing records
for only the years under review discourages fishing expeditions.
7. Be pleasant and courteous In dealing with the tax auditor, be pleasant and courteous.
Provide an empty desk in a quiet corner. If further information is needed, have
your bookkeeper obtain it. Discourage gossiping by the staff with the auditor. The
longer it takes to find the information or do the work, the more pressed the auditor
will feel to find something to justify the extra time.
8. You don′t have to baby-sit That does not mean you have to baby-sit the
auditor. After all, you have a business to run. Customers, clients, staff or suppliers
require your attention. On the other hand, you can’t disappear in the hopes that
your absence will somehow get the auditor to go away. He or she has a job to do,
but so have you.
9. The limit should be three people The tax auditor should limit questioning to
three people—you, your bookkeeper and your public accountant. Some questions are
easy to resolve. If the auditor is looking for certain invoices or cheques, etc.,
your bookkeeper should be able to find them. If there are questions on the business
generally, you should be able to explain things. When it comes to the financial
statements or tax returns, your public accountant should answer these.
10. Don′t try to fake it Depending on your timetable, the auditor should be
asked to list the pertinent questions for you, and to go over them with you at the
end of the day. If you don’t understand the question, or if accounting or tax treatment
is involved, have your public accountant answer the auditor. Don′t try to
explain things that you don’t understand.
11. Reasons for an audit The tax auditor is there to try to extract more taxes from
you. That is his or her job. Usually your business has been chosen for a specific
reason. Perhaps your travel and promotion expenses look high or your profit markup
looks low. The department may be investigating the industry you are in. Loans to
shareholders, tax shelter claims, unusual transactions—all these are reasons for
an audit. They may be looking at your records to see if payments you made are being
reported by other people. They may be checking to see if you have reported payments
made by other people they have already audited.
12. Take the initiative At the end of the audit, ask the auditor if there is going
to be a change in your tax returns. Take the initiative. If you are told there are
not going to be any changes, that completes the matter. If changes are to be made,
get full and complete explanations of each and every proposed change. Tell the tax
auditor you would like an opportunity to consider the changes and to get back to
him or her.
13. Whether to challenge Go over each change with your public accountant and decide
if you are in agreement with the changes or whether the changes should be challenged.
Some changes might appear small but may have more serious consequences as they may
set a bad precedent for future years.
14. Standing your ground If you feel the auditor is wrong, you and your accountant
should meet with him or her to convince the department of your position. After all,
you had a good reason for doing what you did on the original tax return.
15. How high to go It may be that the auditor and your public accountant cannot
agree. Arrange a meeting with the auditor′s superior to convince the department
that your original treatment is correct. Your public accountant will have to decide
how high to go at the tax office.
16. It′s important to persist It is important to persist at the audit level.
Certainly you have the right to appeal and file a notice of objection. That will
mean reviewing the disagreement at a different level of the tax department with
someone new. That may eventually be the only solution. However, it is far less expensive
settling the matter at the initial audit level. Sometimes a compromise will satisfy
both sides.
17. Points to remember Some general points should be kept in mind. Most tax auditors
are reasonable. However, if the person you have is abusive or expects your entire
business to stop while you find a receipt, touch base with your public accountant
to decide whether or not a change of auditor should be requested.
18. The onus is on you On the other hand, the tax auditor has extensive powers.
He or she can obtain any information to determine whether or not you are complying
with the law. The auditor can look at the records of a third party to see if anything
is missing. If you feel that your treatment is incorrect, the onus is on you to
prove otherwise.
19. Best defenses are good records Your main defenses are good records, logical
reasons for what you did and competent tax planning. The best way to prepare for
the tax auditor is by sound thinking when your financial statements and tax returns
are being prepared.
Posted November 17, 2009.
The answer is no. According to Revenue Canada, any location at or from which the
employee regularly reports for work or performs the duties of employment is generally
considered a regular place of employment. An employee can have more than one regular
place of employment, which can change from time to time because of the nature of
the employment situation. For example travel between a sales representative′s
home and a regular place of employment is personal travel and the use of an employer's
vehicle for this travel would give rise to a taxable benefit to the employee.
Posted May 10, 2010
Canada Customs and Revenue Agency has had a policy in place for a number of years
outlining the requirements for employee gifts and their tax treatment.
As of January 1, 2010 this policy changed and the limitation on the number of tax-free
non-cash gifts and awards to employees was lifted.
If you give your sales rep a number of gifts and awards over the course of a year
and their total value does NOT exceed $500, there is no taxable benefit to the employee.
If, however you give gifts and awards to your sales rep with a total value of $650,
there is a taxable benefit of $150 ($650-$500).
Not sure what qualifies, the following examples will assist you:
Example 1
In 2010, Jeffrey is employed by Tremclad Paints and his company gave him the following
gifts and awards.
|
Gifts and Awards |
Value |
Taxable? |
|
T-shirt with employer logo |
$15 (cost) |
No - non-cash item of nominal value, further reduced by the company logo. |
|
Birthday gift (gift certificate) |
$75 |
Yes - a gift certificate is near cash, and therefore is not included under the gifts
and awards policy. |
|
Reward for meeting sales performance target (weekend holiday) |
$400 |
Yes - meeting a performance target does not fall under the definition of an award;
therefore it does not fall under the gifts and awards policy. We consider it to
be additional remuneration. |
|
10 year anniversary award (art print); the last anniversary award was received 5
years previously. |
$275 |
No - the art print is eligible under the long service/anniversary award, and Jeffrey
has not received such an award in the 5 previous years. |
|
Wedding gift (crystal vase) |
$300 |
A gift under the policy** |
|
Innovation and Excellence Award (tickets to a sporting event) |
$250 |
An award under the policy** |
|
Holiday season gift (watch) |
$150 |
A gift under the policy** |
|
Total |
$1,465 |
Taxable amount: $675 |
*A gift has to be for a special occasion (e.g. religious holiday, birthday, wedding,
or the birth of a child). An award has to be for an employment-related accomplishment
such as long or outstanding service, employees′ suggestions, or meeting or
exceeding safety standards. An award cannot be performance-related.
If you give your employee a non-cash gift or award for any other reason, this policy
does not apply and you have to include the fair market value of the gift or award
in the employee’s income. As well, certain kinds of gifts and awards are not eligible,
such as cash.
**Calculation
The gifts and awards that fall within the policy - the wedding gift, Innovation
and Excellence award, and holiday season gift - have a total value of $300 + $250
+ $150 = $700. Jeffrey’s taxable benefit under the policy will be $200 ($700 − $500).
As well, both the value of the birthday gift ($75) and the reward for meeting the
sales target ($400) have to be included in Jeffrey′s income.
Note that the $225 "shortfall" in the long service award category cannot be used
to eliminate the $200 under the policy that has to be included in Jeffrey’s income.
Example 2
In 2010, Ahmed is employed by Bevcott Beverages and he has received the following
gifts and awards.
|
Gifts and Awards |
Value |
Taxable? |
|
Coffee mug |
$8 (cost) |
No - non-cash item of nominal value. |
|
Social Committee 50/50 draw - Employer does not fund or control the social committee. |
$243 |
No - the gifts and awards policy applies to employer/employee relationships. |
|
Gift recognizing birth of first child (gift card) |
$150 |
Yes - a gift certificate is near cash, and always taxable. |
|
Holiday gift (voucher for a turkey)
|
$50 |
A gift under the policy** |
|
An award (a watch) for 3 years service |
$200 |
Yes - since Ahmed has worked for the company for less than 5 years, this long service
award does not meet the parameters of the policy and is taxable. |
|
Award in recognition of running the company charity drive. |
$375 |
An award under the policy*** |
|
A birthday gift (concert tickets) |
$175 |
An award under the policy*** |
|
Total |
$1,201 |
Taxable amount: $450 |
***Calculation
The gifts and awards that fall within the policy - the recognition award, the birthday
gift, and the holiday gift - have a total value of $375 + $175 + $50 = $600. Ahmed’s
taxable benefit under the policy is $100 ($600 − $500).
As well, the value of both the gift for the birth of his child ($150) and the award
for 3 years service ($200) have to be included in his income.
Posted May 10, 2010
Steven Van Alstine Director of the Payroll Resource Group for the Canadian Payroll
Association wrote that if the employer determines that an individual should be considered
an employee, then, at the very least, the employer should begin treating that individual
as an employee as soon as possible. The employer may also decide to go back to the
beginning of the year and calculate and remit the source deduction amounts that
should have been paid in the current year. The fact that the individual may receive
a T4 and a T4A in the same year may trigger the Canada Revenue Agency (CRA) to perform
an audit. The CRA could request that the employer cancel the T4A and create a T4
for the years in which the individual in question was treated as self-employed but
should have been treated as an employee.
The CRA could also impose penalties and interest for unpaid remittances and make
the organization pay all of the source deductions that should have been deducted
from the individual in question.
Therefore, it is vey important for organizations to ensure from the beginning of
the working relationship whether an individual whose services the organization has
engaged is properly classified as an employee or self-employed. It is much easier
to take preventative measures than to endure the possible repercussions resulting
form an incorrect decision.
The Canadian Professional Sales Association turned to Charlie Eansor, Executive
Director of Commodity Tax at Ernst and Young who prepared this response:
The challenge for sales representatives when GST was first implemented in 1991 was
to have their services zero-rated when provided to a non-resident client. Where
services are zero-rated, no GST applies and that is particularly advantageous where
the invoice is being paid by a non-resident, as many non-residents are not registered
for GST and cannot claim GST back as input tax credits.
Initially, it was commonly thought a particular zero-rating provision for agents′
services applied to the services of all sales representatives. About a year and
a half after the GST implementation, however, the Canada Revenue Agency ("CRA")
issued GST Memorandum 300-3-5: Exports in which it indicated that the zero-rating
for agents′ services applied only to "legal" agents.
Legal agents, in the eyes of the CRA, are persons who are authorized to enter into
contracts (such as sales contracts) on behalf of the client they represent. According
to that interpretation, the vast majority of the services provided by sales representatives
to non-residents would become taxable because most sales representatives did not
have the authority to enter into contracts on behalf of their clients (and failed
to qualify as legal agents).
This caused a great deal of controversy because Canadian sales representatives would
become far less competitive if their non-resident clients (who could not claim input
tax credits) had to pay GST on their services.
The CRA initially agreed to enforce its interpretation going forward from the date
of the interpretation, and subsequently, due primarily to the efforts of the CPSA,
agreed to a moratorium on assessments relating to this issue altogether. In 1996
the CPSA was ultimately able to persuade the Department of Finance to formally amend
the GST legislation to allow for the zero-rating of services supplied by sales representatives
to non-residents irrespective of whether or not the sales representative was a legal
agent. This change was made retroactive to 1991.
So, that solved everyone′s GST problems – right? Well, it certainly opened
the door for zero-rating sales representatives′ services but not as wide as
some may have thought. What is zero-rated is a particular range
of services typically supplied by sales representatives under a particular set of
conditions. Go outside the scope of the specified services or fail to
document that all of the conditions are met, and the CRA will likely be looking
for tax on the transaction.
Conditions for Zero-rating
To know more about this: please view Independent Sales Representatives and the GST: Conditions for Zero-rating
Examples
To view some examples: please read
Independent Sales Representatives and the GST: To Tax or Not to Tax Examples
Posted March 1, 2010
Jerry Leth, Membership Director for the Manufacturer′s Agents National Association
(MANA) in the United States advises foreign independent sales agents who represent
businesses operating in California are governed by various state laws such as the
California's Independent Wholesale Sales Representatives Contractual Relations Act
of 1990. These and other acts can levy stiff penalties on unwitting businesses involved
in commission disputes with independent sales representatives and that any contracts
with independent sales representatives should be carefully crafted with California
state laws in mind.
MANA offers its members a free 15-20 minute consultation with an attorney who is
both experienced and knowledgeable about the manufacturers’ agency business and
laws that govern agent/principal relationships.
IFor a listing of U.S. based attorneys specializing in agent/principal relations,
click here
Posted November 28, 2010
A recent decision in the Ontario Court of Appeal case McKee v Reids Heritage Homes
Ltd (RHH) has added another wrinkle in distinguishing the status of an "employee"
and an "independent contractor" and what significance the true nature of the relationship
between the two terms can have on the status of the worker. Furthermore, this case
confirmed that a sub-category of a contractor called a dependent contractor exists
but can only be looked at if the worker is ruled to be a contractor, not an employee.
The Facts
McKee began her work as a salesperson for RHH in 1987. She was contracted and she
received payment on every home she sold. McKee used this money and pay the employees
of her own company. In 2005, when presented with a new six-month contract from RHH
which required McKee to be an employee of RHH, McKee declined to sign. Her relationship
with RHH deteriorated and she was soon after terminated without notice. McKee sued
for wrongful dismissal and she was awarded eighteen months pay in lieu of her termination.
The trial judge in the decision stated that McKee was a "most integral part of the
defendant′s business." The trial judge ruled that McKee was an employee and
therefore owed eighteen months notice of termination.
At appeal, RHH argued that McKee was a dependent contractor, a sub-category of a
contractor. The Ontario Court of Appeal agreed that this category does exist and
defined it as "those non-work relationships that exhibit a certain economic dependency,
which may be demonstrated by complete or near-complete exclusivity". The appeal
judge determined that courts must investigate whether the worker is an employee
or contractor. In order to begin this analysis, the following must be considered:
1. Whether or not the agent was limited exclusively to the service of the principal
(McKee worked exclusively for RHH);
2. Whether or not the agent is subject to the control of the principal, not only
as to the product sold, but also as to when, where and how it is sold (McKee was
told where she could sell, what promotional methods she was to use, and where to
set price points for homes);
3. Whether or not the agent has an investment or interest in what are characterized
as the "tools" relating to his service (RHH supplied McKee with stationery and forms);
4. Whether or not the agent has undertaken any risk in the business sense or, alternatively,
has any expectation of profit associated with the delivery of his service as distinct
from a fixed commission (There was no evidence that McKee risked any significant
capital in her sales operation);
5. Whether or not the activity of the agent is part of the business organization
of the principal for which he works. In other words, whose business is it (McKee
was a crucial element of RHH’s business organization).
Previously, due to McKee having her own corporation in which she employed workers,
the court would have determined that she was a contractor. Not anymore. Now, the
court will go through a test which will look at exclusivity, and only then will
the court determine a worker's status as an employee or a contractor. Only when
a worker is defined as a contractor can the court move to the second analysis to
determine whether the contractor is a dependent or independent. At both the original
trial and at the appeal, McKee was ruled to be an employee. It was therefore not
necessary for the court to determine whether or not she was a dependent or an independent
contractor.
What Does this Mean for Businesses?
Regardless of how well an organization drafts a contract with a worker, courts use
'substance' and 'form' as the defining parts of a working relationship. In other
words, the court will look at the relationship and the exclusivity of the organization
and the worker. In order for an organization to ensure that a worker is a contractor,
they must evaluate the relationship on a regular basis. For example - don′t
give the contractor a business card with the company name on it. Also - encourage
the contractor to branch out for other sources of income. It's all about substance,
not the written agreement.
Further, when contracting a contractor, make sure that the working agreement is
updated often and is compliant with provincial employment standards. McKee′s
next agreement after her initial 1987 agreement was offered to her in 2005. In 1987,
McKee agreed to an agreement in which she would receive 30 days notice of termination.
Thirty days is below the legal standards for a worker of 18 years. The trial judge
determined that the 1987 agreement between RHH and McKee breached the Employment
Standards Act by only offering a 30-day notice of termination, and the contract
was therefore deemed invalid.
The courts are proving that the signature on an agreement will no longer be the
only determination for the nature of a working relationship. This case teaches that
substance and the true nature of the relationship will decide a worker′s status
as an employee or as a contractor. This is an area of significant potential liability
for most organizations, especially organizations in the non-profit sector that rely
upon a mix of employees and contractors to get the job done. If you have questions
or concerns about a worker relationship, feel free to contact Steve Indig.
CPSA would like to acknowledge the Centre for Sport Law′s assistance with
this submission.
Posted November 28, 2010
An independent or manufacturer′s sales agent is an individual who is either
a sole proprietor, partner or incorporated entity working in an exclusive geographically
designated territory or a particular market/customer segment, representing one or
more principals. (The term principal is used to describe the manufacturer or supplier
of goods or services sold by the sales agent.)
An agent may represent one or several non-competitive lines. The agent is remunerated
primarily on a commission-only basis for goods shipped or billed from the principal
represented. Agents control their own time and level of sales effort. The responsibilities
and obligations between the agent and principal or company are usually outlined
in a written contract between the parties.
It is important to note that agents must maintain an "independent" relationship
with the company that has retained them. The agent should not be 'tied' to the company
in any way such as a partner, shareholder or board member. Neither should he/she
operate under any constraints imposed by the principal such as being directed by
the principal as to how much time he should be spending with specific customers
or allocating his sales efforts on call reports.
For more articles about this topic visit the SRC′s
Knowledge Centre
Frequently the terms "agent", "distributor", "rep", and "partner" are used interchangeably.
However, the difference between agents and distributors are distinct.
An independent or manufacturer′s agent is either a sole proprietor or incorporated
entity working in an exclusive geographically designated territory or a particular
market/customer segment. An agent may represent one or more principals (The term
principal is used to describe the manufacturer or supplier of goods or services
sold by the sales agent).
An agent may represent one or several non-competitive lines. The agent is compensated
on a commission-only basis for goods shipped or billed from the principal represented.
Agents control their own time and level of sales effort. The responsibilities and
obligations between the agent and principal or company are usually outlined in a
written contract between the parties.
A "distributor" tends to be an entity with brick and mortar assets, which purchases
(imports) products, takes title, stocks, maintains inventory, and re-sells the product
to end-users. Distributors or “dealers” usually work on a sliding scale discount
basis and provide installation, repairs, customs and port clearances, delivery,
and after-sales service such as warranty work.
Posted November 2, 2009
There are a number of helpful resources that can assist you in determining the pros
and cons of becoming a distributor:
Canadian Importers and Exporters
Association
Publishes a step-by-step guide on "How To Set Up An Import Business," including the rules and
regulations for bringing goods into Canada. This book is invaluable for both start-up
and established importers, with a wealth of current information and import strategies.
Canadian Business
(formerly Canadian-Ontario Business Service Centre)
Provides information on importing to help you navigate each stage of the importing
process, from getting started to clearing your goods through customs. The site features
information on:
- The documentation you need from the vendor and your carrier,
- How to keep proper records,
- The records your carrier is required to maintain,
- What to expect at the border,
- How to prepare your customs documents,
- Working with a customs broker, and
- Duties and tariffs
If you′re just starting out, Canadian Business provides answers to the questions
that will help you receive and release your goods as quickly as possible.
Canadian Border Services
Agency
Offers a
Step-by-Step Guide to Importing to help small and medium-sized enterprises
that import goods into Canada. It provides an overview of the commercial importing
process and is intended to complement, not replace any existing regulations, acts
and references.
Forum for International Trade
Training (FITT)
A non-profit organization established by industry and government, FITT develops
international business programs, sets competency standards, and designs the certification
and accreditation programs for the Certified International Trade Professional (CITP)
designation.
Offers a free Guide
to Importing that outlines the risks and how to minimize them through research
when importing products and how to incorporate importing into a sound business plan,
and you will find that importing is just one more way to ensure a successful entrepreneurial
venture.
Offers a free Online
Glossary defining the various terms used in international trade.
Canadian
Importers Database
The Canadian Importers Database (CID) provides lists of companies importing goods
into Canada, by product, by city and by country of origin. You may want to consider
registering yourself and/or your company once you have become established as it’s
a free service.
Posted March 8, 2010
We recommend that agents and sales representatives have a written contract with their
principals and employers. No oral agreement provides as much protection, offers as many
remedies and eliminates as many disputes as a good written contract.
Members Only:
click here
for the Sales Employment and Agents’ Agreement Guide including sample contract.
TCandor is the best approach. If you are interviewing with a competitor, it is best
to bring up the non-compete early in the interview process. In all fairness to a
prospective employer, you don’t want to be perceived as having misled them by hiding
the non-compete or springing on the hiring manager after they have made you a job
offer.
Posted August 31, 2010
The answer: it depends. Two decisions from Ontario are typical of how courts in
other jurisdictions would deal with the question.
In Cosman v. Viacom Entertainment Canada Inc., the Ontario Superior Court of Justice
decided that an employer could terminate an employee for cause. The employee was
accused of falsifying expense reports and sales activity reports in order to recover
$300 in membership fees with the Board of Trade.
Hired as a salesperson at Canada's Wonderland, Cosman was paid $40,000 in salary
and there was a bonus program that entitled him to earn up to $25,000 per year.
The employer discovered that Cosman inflated mileage claims by documenting and submitting
fictitious client visits and cited these reasons in the termination letter. Cosman
brought an action for wrongful dismissal and argued that he was owed his bonus because
he had met the sales targets by the time of his termination.
The Court found that although Cosman′s 1998 records could not be proven to
be false, the 1997 records amounted to a series of dishonest and criminal acts made
by the employee.
Further the Court stated that the conduct of the Cosman was not only dishonest,
but also criminal as he knew that he was not entitled to receive compensation for
his Board of Trade dues, and he falsely inflated his expense reports to be reimbursed
for them. The deciding factor for the court was that the Cosman had access to several
thousand complimentary entry tickets to Canada′s Wonderland each year (general
admission was $40). The Court was satisfied that the Cosman′s embezzlement
destroyed the position of trust between the employee and the employer and poisoned
the relationship.
The Court dismissed the wrongful dismissal action. Although Cosman was awarded about
$3,000 for monies owing to him prior to the termination, he was not awarded the
bonus, because he was not employed at the time when the bonus was awarded. The court
noted that if he had been found to have been wrongfully dismissed, the court would
have awarded him the bonus in addition to termination notice.
In the case of Graham v. Cuddy Food Products the employee was accused of submitting
an expense report indicating that he had made sales calls to two hospitals, when
evidence revealed that he had gone snowmobiling with a client that particular day.
Graham admitted that he had been dishonest, but argued that he was engaged in company
business on the day in question, and that the accounting department would not have
understood that the snowmobiling trip was for business purposes. Graham brought
an action for wrongful dismissal claiming three months notice, and reimbursement
for mileage expenses pursuant to his employment contract.
Small Claims Court decided that the Graham′s dismissal was too harsh and should
have taken the form of a lesser penalty. The court commented that Graham′s
assertion that his boss backed him and other salespeople in their ongoing battles
regarding their expenses with the accounting department and stated it "had a certain
common sense ring of truth to it". The employer presented no evidence that this
was not the case.
The court acknowledged that if Graham had outlined the nature of his trip to the
accounting department, there would have been another big battle between the sales
and accounting departments.
Thus, even though the Graham lied repeatedly to the employer, there was some aspect
of protection of the employer inherent in the lie. In addition there was the fact
that the Graham actually made work-related calls on the day in question and did
not directly benefit (except as a part of the sales team having fun).
Therefore, the court concluded that the employer did not have just cause to dismiss
the employee. It awarded three months' notice to the Graham. In addition the court
also decided that Graham was only entitled to the mileage amount as suggested by
the employer.
Source: www.langmichener.ca
Posted October 13, 2009
Any valid contract, including an employment contract, requires the parties to give
each other something in exchange for entering into the agreement. In legal terms,
the parties must give each other "consideration" in order for their contract to
be enforceable.
The Ontario Court of Appeal recently affirmed this principle as it applies to employment
contracts in the case of Hobbs v. TDI Canada Ltd. ([2004] O.J. No. 4876).
Allan Hobbs, an experienced advertising salesperson, left another job to join TDI
Canada Ltd. As a salesperson, Hobbs′ earnings were primarily based on his
commissions. In their pre-contract discussions, Hobbs and TDI verbally agreed on
commission rates and had a common understanding of how commissions were calculated
and paid in the industry. Before resigning from his old job, Hobbs insisted on receiving
a written offer of employment from TDI. The offer letter Hobbs was provided with
did not specify his commission rates, but read: "Details on the rates, calculation
and payment of commissions shall be provided to you in a separate document." Hobbs
resigned from his old job the same day he signed TDI′s offer letter. Read more
It is all well and good for the company to go to the trouble and expense of preparing
a Code of Conduct, but its implementation and practices create the context in which
your behaviour should be assessed. If, as you state, you can establish that many
other individuals, including your boss, do not adhere to the Code of Conduct, then
it is probable that a court would conclude that your behaviour, taken in the context
of the workplace, is not cause for dismissal or, alternatively, that your former
employer has condoned such behaviour and cannot rely upon it as just cause for termination.
If your former employer appreciates the risk associated with your allegations, it
may do well to sort the problem out with you quickly and quietly, in order to avoid
embarrassment, and potentially, the total collapse of the framework of its Code
of Conduct.
Submitted by Norman Grosman, Senior Partner, Grosman, Grosman & Gale - Employment
Lawyers. This article was originally available at workopolis.com and has been reprinted with permission.
Yes. Provided you have not signed an enforceable covenant not to compete after you
depart from your former employer, the law will support your right to join a competitor,
and to use your skill, experience and knowledge in your particular industry.
Broadly speaking, there are two exceptions to that rule. The first occurs if you
have signed a restrictive covenant that typically provides that for a stated period
of time within a restricted geographic area you will not work for a competitor.
Courts generally frown on these types of covenants and review them strictly, as
it is generally against public policy to prevent somebody from working in the industry
in which they have experience. The second exception is that the law provides that
a former employee has a duty not to compete unfairly with his or her former employer.
In that respect, the use of confidential information or material belonging to your
former employer is not permitted, as it would provide you with an unfair advantage
and corresponding disadvantage to your former employer.
Generally, the law is simply seeking to strike a balance between the rights of former
employers and individuals to co-exist after the employment relationship ends, in
a manner which is fair to each.
Submitted by Norman Grosman, Senior Partner, Grosman, Grosman & Gale - Employment
Lawyers. This article was originally available at workopolis.com and has been reprinted with permission.
The Ombudsman for Banking Services and Investments (OBSI) is the most likely source
to help resolve disputes between you and your financial institution as both major
Canadian and foreign-owned banks who operate in Canada fall under the OBSI’s authority.
Another resource would also be the Financial Consumer Agency of Canada which states
that every federally regulated financial institution must have a complaint-handling
process in place and a copy of this process on file at FCAC.
This complaint-handling process usually includes access to an independent dispute-resolution
process such as an ombudsman. Furthermore FCAC offers Guidelines for Making a Complaint
to consumers who have a complaint or a problem with a federally regulated financial
institution and the outlines the steps they can take to resolve it.
Actually, the court would look at a number of factors to determine, as a whole,
whether the employer has the level of control and direction over the individual
so as to make that person an employee, as opposed to an independent contractor.
Recently, the Ontario Superior Court considered the issue in the context of commissioned
insurance brokers. In that situation, the evidence established that:
- sthe producers were entitled to work for more than one business;
- the producers could hire assistants without the company′s consent;
- there were no minimum or maximum hours;
- the producers could work from the company′s location or another location;
- compensation was entirely commission based;
- the producers were responsible for their own expenses;
- if the producers worked from the company′s premises, they were required to
pay a rental fee; and
- the company had no authority to discipline the producers.
As a result, the court concluded that the producers were independent contractors,
based on the lack of control and, in those circumstances, the severance provisions
of the Employment Standards Act did not apply.
Submitted by Norman Grosman, Senior Partner, Grosman, Grosman & Gale - Employment
Lawyers. This article was originally available at workopolis.com and has been reprinted with permission.
This is a vexing issue according to Brian P. Smeenk of McCarthy Tétrault who wrote:
"First, one must recognize that this question is different from the issue of what
country′s laws apply to the contract of employment. The applicable law is
not the same as the selection of the appropriate forum for dispute resolution. A
Canadian court may enforce foreign laws, and a foreign court may enforce Canadian
laws.
Failing a binding agreement on where and by whom a dispute will be resolved, how
will this be decided? To answer this, Canadian courts will look at two distinct
issues:
Do they have jurisdiction to consider the dispute?
Are they a convenient forum for considering the dispute?
Somewhat different, but related, factors apply to each question. Therefore, even
though a Canadian court concludes it could entertain a dispute insofar as it has
jurisdiction to do so, it may still decide it should not do so, if it is not the
most convenient forum."
To read more, click here
The primary, or default rule on termination without cause, is that the terminated
employee has a legal duty or responsibility to use all reasonable efforts to mitigate
his or her economic loss following termination. That is to say, the law implies
a responsibility on the part of the departing employee to attempt to secure other
forms of employment and employment income during what would be a reasonable period
of notice, and any earnings from alternative employment sources will reduce what
you would otherwise be entitled to over a fair notice period.
The exception to the rule occurs in cases where the contract of employment can be
interpreted as having exempted, either expressly or by implication, the employee
from the duty to mitigate. Examples of such exemptions are:
- an express waiver of the duty to mitigate in the contract;
- an express obligation to continue the payments under the contract on the part of
the employer; or
- where the contractual provision provides the severance amount is payable immediately
at, or very shortly after, the time of the termination. The fact that the payment
is to be made prior to the time when either the employer or the employee could know
whether mitigation could occur implicitly suggests a waiver of the obligation to
mitigate dates.
As a result, there is no rule or principle that because your agreement is in writing
you are therefore exempted from the duty to mitigate. That exemption, if it exists
at all, must be found in the express wording of the agreement or drawn from the
agreement by logical implication.
Submitted by Norman Grosman, Senior Partner, Grosman, Grosman & Gale - Employment
Lawyers. This article was originally available at workopolis.com and has been reprinted
with permission.
Both options have respective advantages and disadvantages that vary from person-to-person
and should be fully discussed with a financial planner and legal advisor before
a termination agreement is finalized.
Lump Sum Payment
With respect to a lump sum payment, the advantages include:
- Usually immediate payment of the entire severance amount (no need to worry about
your former employer′s financial viability over the long-term);
- More flexibility in taking advantage of favourable tax rules; and
- A lump sum payment is typically not subject to set off or reduction for mitigation
income from new employment.
The main disadvantages to taking a lump sum payment over a salary continuance are:
- The lump sum package is usually discounted more than a severance package based on
a salary continuance model since mitigation and or set off for new employment income
is factored into the employer's reduced offer; and
- Benefits in lump sum packages are usually terminated earlier than benefits offered
under a salary continuance.
Salary Continuance
With respect to a salary continuance severance package, the advantages include:
- A steady stream of regular income as if you remained at work;
- Usually benefits, E.I. and C.P.P. contributions continue to accrue;
- Usually represents a larger total severance figure than a comparable lump sum offer.
The main disadvantages to taking a salary continuance are mainly:
- You remain dependent on your former employer for income (if your former employer
is in financial trouble, your fate is tied to their ongoing viability;
- Salary continuance is usually subject to set off or reduction for new employment
income (e.g. you may get less); and
- You may be required to update your former employer in your job search efforts as
a condition of continuing payments.
As mentioned above, in negotiating either a lump sum or salary continuance severance
agreement with your former employer, it is critical to partner with your lawyer
and professional financial advisor to determine which of the two options makes the
most sense for you (quite apart from what your former employer is prepared to offer
in the circumstances.)
Reprinted with permission from workopolis.com
Posted December 14, 2009
There are several websites and online services that house Requests for Proposals
(RFPs), bids, Request for and tender information depending upon the type of business
you are looking for—institutional, government or private sector.
Many provinces post opportunities onto their own sites in addition to posting them
on well-know sites like MERX. Many large municipalities post their data online but
many smaller centres do not. Some smaller municipalities do not actually put their
procurement out to tender and instead pick suppliers based on personal relationships
and mutual benefit. The few tenders which are publicly advertised may be found in
small local papers and in some larger newspapers. Most newspapers in Canada do not
publish tenders online.
The following is a list of several RFP sources:
www.merx.com
MERX offers public and private sector contract opportunities (tenders) in Canada.
New opportunities are listed daily from all levels of government including the federal
and provincial governments as well as the MASH sector (Municipal, Academic, School
Boards and Hospitals) from across Canada. You can search across 32 products and
19 service categories.
In addition MERX allows purchasers and project managers complete control over the
tendering process allowing them to: publish tenders online to an invited group of
suppliers or reach over 50,000 Canadian suppliers and contractors; manage tender
document distribution; control supplier and contractor information and to receive
bids.
This is a subscription-based service that offers two levels of pricing depending
upon the level of detail and services required by a subscriber. Available in English
and French.
www.rfpsource.ca
RFPSource.ca replaced SourceCan which was discontinued. RFPSource offers small-and
medium-sized companies the opportunity to bid, post opportunities and pursue strategic
partnerships in Canada, the United States and internationally.
Users must register and create a profile in order to access opportunities. RFPSource
features a Business Opportunities section where companies can define what types
of opportunities (bids) they are interested in and would like to have matched to
their profile. RFPSource′s Match Profile tool allows companies to include
keywords and industry codes to identify bids that are of interest to your company.
In addition you also have the ability to post opportunities and have them matched
against other listed companies.
RFPSource will send you regular e-mail messages to notify you of the latest business
opportunity matches to your profile.
www.bidsCanada.com
A Canadian search engine that specializes in indexing brief descriptions and links
to tenders, Requests for Proposal (RFP), Requests for Quotation (RFQ) and other
solicitations posted on Canadian public sector websites. Although these bid solicitations
are freely available from a variety of public websites, bidsCanada.com eliminates
the need to search each and every website individually. The search engine is updated
daily to ensure that you always receive the most accurate and up-to-date information
available.
In addition bidsCanada.com has an e-mail notification service where you can opt
in to receive a daily e-mail message that consolidates details of Canadian public
sector bid solicitations based on your area of business.
www.iTenders.com
Currently in the midst of a redesign, this site is a business-to-business and business-to
consumer service that helps companies develop new business relationships, attract
new customers and find suppliers for their services.
Posted December 14, 2009
According to research released by Carnegie Mellon University, many employers believe that
even using hands-free devices poses a risk to drivers as they can become distracted
even listening to conversations.
The Ontario law for distracted driving is being enforced as of February 1, 2010
even though it′s been effect for several months. It′s up to the employer's
discretion whether to allow an employee to use a hands-free device or to make cell
phone calls while driving. A majority of employers (over 58 per cent) have some
sort of HR policy in place re: cell phone usage while driving.
These legislative efforts, backed by scientific research, provide strong evidence
that the risks involved in the use of a cell phone when driving are widely known.
This means that an individual who does so anyway is more likely to be found negligent
by the courts. And possibly his or her employer if that act was committed in the
course of the employee's duties.
In law this principle is known as vicarious liability. For example, if an employer
requires that an employee participate in a meeting via mobile device, and as a result
the employee causes a collision that injures someone, the victim may pursue the
employer.
In this instance, the link between employer requirements and employee behaviour
is clear. But this may not be a prerequisite. Consider these two examples from the
United States:
- Dyke Industries lost a US$21 million lawsuit in a matter where an employee struck
a 78-year-old woman while making a business call on a cell phone
- Investment firm Smith Barney paid out US$500,000 when one of its brokers struck
and killed a father of three while making a sales call
Similar cases have not presented themselves in Canadian courts. However, the principles
of vicarious liability in Canada are similar to those in the U.S., and the use of
cell phones in the course of employment is widespread in both countries. This means
Canadian courts are likely to be faced with this issue sooner rather than later.
One way in which employers can both limit their liability and keep their employees
safe is by implementing a policy banning the use of cell phones, and other wireless
communication devices, when driving. Such a policy must include not only the document
itself, but also an effective implementation strategy.
An employer contemplating a cell phone policy might consider including some or all
of these elements:
- a statement outlining the employer′s stance against cell phone use while driving.
This clarifies the goals sought by the employer and their importance to the organization.
- applicability, expressed in a clear statement of whom the policy applies to and
when.
This avoids misunderstandings, helps employees to follow the policy, and facilitates
policy administration enforcement/monitoring, which clarifies how the employer plans
to ensure compliance with the policy. This is important in order for employees to
take the policy seriously
Important as these elements are to the cell phone policy, their effectiveness depends
on proper communication to employees. For employees to comply, they must be fully
aware of its existence and implications.
One way to do this would be to require all employees to read the policy and sign
a letter of understanding/acknowledgement attesting to the fact that they have read
and understood the policy.
Employers can also facilitate implementation and adherence to the policy by offering
employees helpful hints. The Calgary Health Region, for example, suggests the following:
- while driving, avoid temptation by making your phone inaccessible;
- create a voicemail message indicating that you may be driving, and offer an alternate
employee′s contact number;
- if you must use a cell phone, pull over safely and make the call once stopped; and,
- plan your day in such a way that your car does not become a satellite office; in
other words, do not leave phone calls for the commute to save time.
A cell phone policy is not only a good response to the scientific literature, it
is also a necessary precaution in light of American law. One example of this is
the case of Ellender v. Neff Rental Inc., a Louisiana court decision. The Court
of Appeal of Louisiana affirmed the trial judge's finding that the absence of a
policy against the use of cell phones while driving was a significant factor in
holding the employer vicariously liable for the actions of its employee.
Updated February 8, 2010
The Canadian Law List is a free online directory of law firms,
lawyers, judges, government departments and related legal services. You can search
for a lawyer by area of specialization (e.g. bankruptcy, employment or contract),
name, city and keyword.
In addition each province and territory offers a lawyer referral service where members
of the public can call to obtain the name of a lawyer in their area. Many of these
services can be accessed for free or for a modest fee.
Posted November 2, 2009
The Certified General Accountants Association of Canada is the umbrella organization
for all of the provincial associations. Each provincial association offers an online
directory or listing service to help you locate an accredited Certified General
Accountant by their area of specialization.
Posted November 16, 2009
It′s important to perform due diligence on prospective vendors/suppliers you
are considering a business relationship with to avoid unpleasant surprises down
the road.
A background screen should include a search of past addresses, civil and bankruptcy
records, credit reports, criminal records, driving records, education and employment
histories, liens and judgment histories, media coverage, professional licenses and
certifications.
In order to perform this type of search, you need to secure the vendors′ or
individual′s permission to perform this type of check.
There are several firms in Canada and the United States that provide international
background screening services and they are listed below:
HR Plus
HR Plus Corporate Headquarters
8745 West Higgins Road, Suite 110
Chicago, IL 60631
Toll-free: 800.955.3575
HR Plus offers more than 50 distinct screening products and services.
Kroll
Background Screening Division Headquarters
100 Centerview Drive
Suite 300
Nashville, TN 37214
United States
Toll-free: 800.697.7189
Phone: 615.320.9800
Fax: 615.320. 9916
E-mail: www.krollbackgroundscreening.com
Firm offers a wide range of services including background checks, substance abuse
testing, and other employee screening to reduce risk for companies and employers.
Garda Global
36 Scarsdale St North York
Toronto, ON M3B
Telephone: 416.915.9500
Garda Global is a physical security, consulting and investigation, pre-employment
screening, and cash handling firm in North America. Garda has 24 Canadian offices
along with operations in Europe and the United States.
Posted November 30, 2009
The Canadian Professional Sales Association (CPSA) is a national organization of
30,000 sales and marketing professionals. Members receive significant savings on
travel and business costs plus access to professional development, sales certification
and other programs
There is no equivalent association to CPSA in the United States but there are several
sales associations:
Association of Investment Management
Sales Executives
Active membership limited to individuals (approximately 800 members) directly engaged
in selling investment management products or services.
Direct Selling Association
National trade association of the leading firms that manufacture and distribute
goods and services sold directly to consumers.
Hospitality Sales and Marketing
Association International (HSMAI)
With over 7,000 members this association is targeted to professionals in the travel,
tourism and hospitality industries interested in sales and marketing.
Manufacturer′s Agents
National Association
Largest trade association of professional sales representatives and the principals
they represent in the United States with approximately 5,000 members.
Click here for additional independent sales agent associations
National Association of Sales
Professionals
NASP offers professional development programs and sales certification
Sales Management Association
(SMA)
Professional association for sales management and professionals supporting sales
management.
Sales and Marketing Executives
International (SMEI)
Membership association with approximately 10,000 members in various chapters worldwide.
Open to all sales professionals.
Strategic Account
Management Association
With over 3,000 members, SAMA attracts the strategic customer management profession′s
most influential decision-makers. Offers resources, training and networking opportunities
to its members.
Sales 2.0 is defined as:
Bringing together customer-focused methodologies and productivity-enhancing technologies
that transform selling from an art to a science. Sales 2.0 relies on a repeatable,
collaborative and customer-enabled process that runs through the sales and marketing
organization, resulting in improved productivity, predictable ROI and superior performance.
(Source: Selling Power Magazine)
There′s plenty of content regarding Sales 2.0 and CPSA is starting to see
discussions about Sales 3.0.
To gain more perspective about this topic I′d recommend the following resources:
All-top Social Media
News is an online site that compiles Social Media news and headlines
from across the web focusing on business, marketing, technology and consumer areas.
123 Social Media
www.bnet.com
is a tremendous site for business and sales. It features the latest business content
and there is a lot about technology and the sales process here. A great "go to"
site that should be bookmarked.
Anneke Seley along with Brent Holloway co-authored Sales 2.0: Improve Business Results
Using Innovative Sales Practices and Technology She is also blogs extensively about
Sales 2.0 http://www.sales20book.com/wp/sales-20-book/excerpts/.
Nigel Edelshain′s blog and site http://www.sales2.com/about.shtml There is a LinkedIn group
that you can join on Sales 2.0 started by Nigel.
Chad Levitt′s blog http://newsaleseconomy.com/
also features some interesting posts from sales professionals and trainers on how
to use social media
Within a sales context, the Total Target Compensation (TTC) refers to the total
cash compensation available for the sales job or position. This would encompass
all forms of both fixed and variable compensation (base pay, bonuses, short-term
incentives and commissions) to the individual for achieving expected (quota) results.
It also includes any direct allowances (e.g. business vehicle allowances) paid to
the salesperson.
Posted January 4, 2011
A recoverable draw (also known as a draw against commission) is a set amount of
money paid to the sales representative by the company at regular intervals. When
a salesperson′s compensation is derived largely from commissions, a company
can pay the salesperson a substantial sum of money even before the commissions are
earned. This payment method provides the salesperson with funds with which to plan
and pay for basic living expenses. When the commissions are earned, the salesperson
pays back the draw.
When the amount of commission earned is more than the draw, the salesperson receives
the draw amount plus whatever is left over after the draw balance is paid off. When
the commission earned is less than the draw, the salesperson receives the draw amount
only.
The draw activities are recorded in a spreadsheet under the categories: commission
earned, pay cheque amount and draw balance:
Pay Period
(Week Ending) |
Commission Earned |
Pay Cheque Payment |
Debt |
Draw Balance |
|
Feb. 1 |
$400
|
$1,000 |
$600 |
$600 |
|
Feb. 8 |
$600
|
$1,000 |
$400 |
$1,000 |
|
Feb. 15 |
$1,200
|
$1,000 |
<$200> |
$800 |
|
Feb. 22 |
$1,500
|
$1,000 |
<$500> |
$300 |
|
Feb. 29 |
$1,400
|
$1,100 |
<$300> |
$0 |
A non-recoverable draw occurs when the salesperson′s commissions are less
than the draw amount and the draw monies are not returned or carried forward. The
salesperson gets to keep the draw amount.
Gary Prenevost, a Toronto-based franchise business consultant suggests that if you
are just providing referred franchisee prospects to the franchisor, then it is perfectly
reasonable to expect the franchisor to pay you a referral fee (usually a few thousand
dollars), and it is only paid to you if the referral signs up to become a franchisee.
If however you are doing all the advertising, upfront work, communication and franchise
selling role to recruit a new franchisee then you should be compensated to a significantly
greater degree – where that compensation is commensurate with your costs and your
efforts.
A "master" franchisor is somewhat of a misnomer in that it is sometimes used to
refer to an individual that purchases a master license. A master license is where
an individual buys the franchise and sub-franchise rights for an entire region,
most often an entire province or entire country. In essence they become the franchisor
for that area. Most master licenses sell for upwards of $250k; the Master then sells
new franchises, and he/she is also responsible to provide ongoing training/coaching
and support to existing franchisees. The Master retains a portion of all incoming
franchise fees and royalty revenues (usually around 50 per cent of each); as well,
they are often responsible for running their own franchise unit.
Posted November 28, 2010
Commission-only sales have been around for a long time and it is the primary method
for compensating independent/manufacturer’s sales agents. Commission-only plans
are highly attractive to new business start ups who are seeking to establish themselves
in the marketplace or to penetrate a specific market or territory quickly.
Under certain conditions this form of compensation plan works exceedingly well and
it is highly attractive to salespeople. Consider the following factors:
- Simplified sales process. Commission-only plans provide a way for
the salesperson to maximize their earnings. In order for that to take place, there
needs to be a high transaction level, resulting in several sales per day or week.
Typically the ideal sales process involves a few defined steps: generate/follow
up a lead, make an appointment with the decision-maker, present the product benefits
and pricing, ask for the order and close the sale.
- Formalize the relationship. If there is no signed agreement between
the parties outlining the duties and responsibilities along with a defined set of
sales objectives and a regular payment schedule, the relationship is doomed to fail.
Informal or verbal agreements can result in breaches of the agreement, a lack of
trust, and sales coming to a standstill over matters such as what constitutes a
sale and the percentage of commission to be paid out and under what terms.
- Foster mutual respect. And finally, commission-only plans don’t
work when what each party brings to the table isn't valued properly by the other
party. Many salespeople are approached by suppliers who wish to access their network
of contacts/customers for free and only wish to compensate them if and when a sale
is made.
- Lead generation program. In addition to having the salesperson
call upon likely prospects, a supplier needs to develop a marketing plan and invest
monies into generating qualified leads for the salesperson.
When does it not work?
Obviously a commission-only plan is not going to work when a supplier does not take
into consideration the above factors. It will also fail if you:
- Fail to invest in success. Commission-only plans are perceived
as a low risk solution that cost the supplier almost nothing. The axiom “Nothing
ventured, nothing gained” is accurate and suppliers that fail to provide adequate
training, management and follow-up to their commissioned salespeople run the risk
of having their brand image tarnished, lacklustre sales and poor market penetration.
- Length of sales cycle. Commission-only plans work best when there
are short sales cycles measured in hours or days. Long sales cycles cause two issues;
first, the time invested (Return on Time Invested by the salesperson is greater
and therefore translates into lower earnings; and second, the risk of the sale being
"undermined" by a competitor (e.g. a member of the same sales team if the territory
is not exclusive) or even another vendor also increases dramatically.
- Established customer base. When the salesperson is already selling
to the target audience and your "product" would simply be "layering on" additional
revenue with minimal effort on the part of the salesperson.
- Lead generation program. In addition to having the salesperson
call upon likely prospects, a supplier needs to develop a marketing plan and invest
monies into generating qualified leads for the salesperson.
Some additional points to consider:
- A commission-only sales force has little interest in providing customer service
beyond the sale unless compensated for these efforts in the form of a higher commission
payout.
- The hiring and management of commission-only salespeople can be a huge drain on
the management team, as these people are all independent contractors.
Commission-only plans are a great tool and are highly effective under the right
conditions. A supplier needs to evaluate whether this type of sales channel will
be effective in furthering their company’s sales efforts and whether they are prepared
to invest in the relationship in order to succeed.
Posted June 14, 2010
There are both free and published sales compensation data available:
Free Online Sources
www.monster.ca Popular jobsite
uses a SalaryWizard to provide information on 28 different Canadian sales and executive
positions for across Canada. Data includes a brief job description, detailed breakdown
of base salary including medians plus bonus information. NOTE:
Results are geographically adjusted national averages based on published sales compensation
data surveys and may not be reflective of the actual compensation levels in specific
regions.
www.workopolis.com Another popular jobsite uses Payscale
salary calculator tool to provide reports based on your job title, location, education,
skills and experience levels for over 217 positions. NOTE: Payscale bases its reports
on data collected from employees and employers not data surveys.
CPSA′s
2008 Sales Compensation and Benefits Report
View
2008 Sales Compensation Ranges
Canadian Sales Compensation Survey Data
Culpepper Sales Compensation Survey Available only to survey participants
have access to online survey data. Features 110 job families covering business development,
contract operations, sales operations, sales. Canadian and US data.
Mercer Sales Representatives and Automobile Benefits Survey
Annual survey featuring 14 sales and management position titles focusing predominantly
on large companies in the manufacturing, telecommunications and transportation sectors.
Morneau Sobeco Coopers
Lybrand Releases a Sales and Marketing Compensation Report featuring 38
sales and management position titles for companies primarily located in Ontario
and Quebec in the manufacturing, logistics, wholesale trade and utilities sectors.
Salary
Assessor, Professional Edition Easy-to-use software program that reports
"up to the present day" competitive wage, salary, and incentive survey data. Compensation
software available to employers and consultants only contains 296 sales and management
position titles from published surveys and government data sources. Canadian edition
available to employers and consultants.
Toronto Board of Trade Annual survey available to members
and non-members alike featuring compensation data for sales professionals and managers
located in the Greater Toronto Area.
TowersPerrin General Industry Database Available only to
employers who participate in annual survey. Database contains 13 executive sales
and marketing, 2 customer operations and 26 front-line sales position titles.
Watson Wyatt Offers an Annual Canadian Salary Survey featuring total target
sales compensation for between 40-50 sales and management titles. Data is drawn
from over 400 companies from all industry sectors.
The Wynford Group Produces
a Call Centre Contact Survey focusing on 31 contact centre titles: inbound and outbound
sales, technical customer support, director/manager, supervisor/lead, quality assurance,
training, credit and collections. Also includes information on contact centre incentives,
benchmarking and productivity indicators plus long-term incentive comparisons.
Norman Grosman of Grosman, Grosman, & Gale LLP maintains that vehicle allowances
are typically treated as a form of compensation and not usually as a reimbursement
from the employer for the business use of an employee’s vehicle. Many employers
argue that their vehicle allowance obligations cease on termination since the employee
is no longer using their vehicle for business purposes. In the absence of a written
term in the employment contract (e.g. a termination clause that makes it clear that
the vehicle allowance is not part of the severance entitlement) this argument tends
to be rejected by the Courts since most vehicle allowances are treated as part of
an employee’s overall compensation. In other words, vehicle allowance should be
included in an employee’s severance package in most cases (e.g.. absent a contract
to the contrary).
Posted December 14, 2009
Yosie St. Cyr, Managing Editor of HRInfoDesk, an online payroll and employment law
reporting service writes there is a great deal of confusion over whether commissioned
salespersons are exempted from certain requirements of the Ontario Employment Standards
Act, such as minimum wage, vacation pay, over time, hours of work, or public holidays.
Ontario Regulation 285/01 that stipulates "a salesperson, other than a route salesperson,
who is entitled to receive all or part of his or her remuneration as commission
in respect of offers to purchase or sales that, (i) relates to goods or services,
and (ii) are normally made away from the employer′s place of business" does
not have these normal entitlements.
The problem arises from determining who qualifies for the exemption. The analysis
can be broken down into three parts:
- route salespersons are not exempt;
- salespersons who conduct sales on the employer's premises, e.g., commissioned retail
salespeople, are not exempt;
- otherwise, salespersons who make sales away from the employer's place of business,
are not eligible for minimum wage, vacation pay, over time, hours of work or public
holidays.
It is not straightforward to determine whether sales are made at or away from the
employer's place of business. For example, a professional salesperson representing
a consulting company or software business may do many presentations away from the
office, but the preparation for the presentation and the final paperwork for the
sale may be completed at the employer′s office.
The exemption has been construed very narrowly and is aimed primarily at salespersons
who "work their own hours and make the contacts that underlie their sales in their
own way without employer involvement or interference."
Most employers should operate under the assumption that their salespeople are not
exempt from the minimum requirements of the Employment Standards Act.
Vacation Pay
Since many commissioned employees also enjoy a base salary, it is not unusual for
employers to simply continue paying the base salary while the employee is away on
vacation. Many employers and employees do not realize that this practice does not
conform to the requirements of the Act in a number of ways.
First of all, 4 per cent vacation pay should be accrued on all compensation paid
to an employee. [Note that in some provinces, employees are entitled to 6% vacation
pay after five years of service.]When an employee receives vacation pay, the pay
stub should show that it is vacation pay and not regular wages that are being paid.
The record-keeping requirements of the Act are quite strict and, unless the employer
is able to demonstrate that vacation pay is being paid, the employer may be forced
to pay twice.
Secondly, paying straight salary may seriously under-compensate the commissioned
employee. Under the Act, all employees are entitled to at least 4% of wages as vacation
pay. "Wages" include commission pay.
Example 1
Jeffrey works for a small printing company. He earns $52,000 per year as base salary
and is entitled to commission on sales. In the previous twelve months, he has earned
$26,000 in commission. Jeffrey takes two weeks off and is paid base salary.
In this hypothetical, Jeffrey has been seriously under-compensated. Jeffrey is entitled
to at least 4% of $78,000 or $3,120 in vacation pay. The $2,000 Jeffrey receives
by way of salary continuation does not meet the minimum standards of the Act.
Example 2
Alexandra works at a large consulting company. She is paid on a pure commission
basis. Last year, she earned $168,000 in commission sales. Alexandra works closely
with the VP of Sales and the rest of the sales team. Her responsibilities involve
a mixture of work in the office and at the client's place of business. She is assigned
a territory by her employer and is often given hot "leads" by various salespeople
working trade shows or other events. She prepares her presentations at the office.
Often, she will make sales calls and presentations at various clients' offices,
but all deals have to be approved by the VP, Sales. The company is prepared to let
her take two to four weeks' unpaid time as vacation. The company takes the position
that she is exempt from the vacation pay requirements under the regulations because
she earns commission.
While Alexandra does earn all her income as commission, it is clear that her sales
are not "normally made away from the employer′s place of business." In fact,
the final approval occurs in the company′s offices. As such, Alexandra is
entitled to 4% of $168,000 ($6,720) in vacation pay and is entitled to at least
two weeks off per annum. Any additional time off is at the discretion of the company.
In addition MERX allows purchasers and project managers complete control over the
tendering process allowing them to: publish tenders online to an invited group of
suppliers or reach over 50,000 Canadian suppliers and contractors; manage tender
document distribution; control supplier and contractor information and to receive
bids.
This is a subscription-based service that offers two levels of pricing depending
upon the level of detail and services required by a subscriber. Available in English
and French.
www.rfpsource.ca
RFPSource.ca replaced SourceCan which was discontinued. RFPSource offers small-and
medium-sized companies the opportunity to bid, post opportunities and pursue strategic
partnerships in Canada, the United States and internationally.
Users must register and create a profile in order to access opportunities. RFPSource
features a Business Opportunities section where companies can define what types
of opportunities (bids) they are interested in and would like to have matched to
their profile. RFPSource′s Match Profile tool allows companies to include
keywords and industry codes to identify bids that are of interest to your company.
In addition you also have the ability to post opportunities and have them matched
against other listed companies.
RFPSource will send you regular e-mail messages to notify you of the latest business
opportunity matches to your profile.
www.bidsCanada.com
A Canadian search engine that specializes in indexing brief descriptions and links
to tenders, Requests for Proposal (RFP), Requests for Quotation (RFQ) and other
solicitations posted on Canadian public sector websites. Although these bid solicitations
are freely available from a variety of public websites, bidsCanada.com eliminates
the need to search each and every website individually. The search engine is updated
daily to ensure that you always receive the most accurate and up-to-date information
available.
In addition bidsCanada.com has an e-mail notification service where you can opt
in to receive a daily e-mail message that consolidates details of Canadian public
sector bid solicitations based on your area of business.
www.iTenders.com
Currently in the midst of a redesign, this site is a business-to-business and business-to
consumer service that helps companies develop new business relationships, attract
new customers and find suppliers for their services.
Posted December 14, 2009
The Runzheimer Guide to Daily Travel Prices published by Runzheimer International
profiles 200 U.S. and 100 international cities.
The per diem totals shown below reflect the average costs for the typical business
traveller and include breakfast, lunch and dinner in business-class restaurants
and single-rate lodging in business-class hotels and motels. Meal costs include
customary and appropriate gratuities, taxes and service charges. Lodging rates include
all applicable sales and lodging taxes. Values are expressed in Canadian dollars.
Per Diem Rates for Canadian Cities*
|
Location |
Per Diem |
|
Calgary |
$194.59 |
|
Edmonton |
$167.32 |
|
Halifax |
$200.43 |
|
Hamilton |
$176.52 |
|
London |
$172.78 |
|
Montreal |
$234.01 |
|
Ottawa |
$193.04 |
|
Quebec |
$203.81 |
|
Toronto |
$216.54 |
|
Vancouver |
$199.43 |
|
Winnipeg |
$159.86 |
*Prices reflect First Class Single Average Daily Rate Plus 3 Meals (prices are in
Canadian dollars)
Posted November 16, 2009
The recruitment process for hiring an independent sales agent or manufacturer′s
representative is similar to that of hiring a full-time sales representative--advertise,
screen and conduct interviews. The following is a list of questions you can ask
an independent sales agent in an interview:
1. Are you incorporated, a partnership or a sole proprietorship?
2. Can you outline your growth history for me?
3. Do you develop an annual sales plan and budget? If yes, what are your plans for
[current year]?
4. What are your business goals for the next year, five years and ten years?
5. Can you outline the geographical territory or market you cover?
6. Will you be willing to sell outside your territory? If yes, how far outside?
7. How active is management in the sales process?
8. Can you give me a list of the manufacturers/companies you represent? Can you
tell me why you feel their lines are compatible with ours?
9. Who are your major accounts and how do you cover these key accounts?
10. Have you segmented/classified your territory by accounts? If yes, can you outline
how you went about this exercise?
11. How do you monitor sales performance?
12. Are there any conditions/circumstances under which you would expect your principals
to participate in the production/distribution costs of these mailings?
13. Do you distribute your own catalogue? If yes, is it available in print, online
or in both versions?
14. What is your policy regarding visits by principals or factory personnel?
15. Can you outline how your principals compensate you?
16. Have your other principals required you to sign an agency contract? If yes,
what do those contracts cover?
17. Have you ever been involved in a dispute with any of your present or past principals?
If yes, please elaborate.
Posted January 4, 2011
The National Joint
Council of the Public Service publishes a detailed index (updated every 4 months) outlining the
limits for meals, accommodation and other incidental expenses that may be claimed
by government employees travelling abroad. The most useful feature of this site
is that travellers can search the site by country or city for per diem rates. In
addition the per diem rates for meals (breakfast, lunch, dinner) and accommodation
(commercial and non-commercial establishments) are cited in local currency (e.g.
Euros, rupees etc) which makes it easier for travellers to track the amounts they
spend.
Posted June 14, 2010
There are several glossaries that can assist you in defining these terms:
http://www.salesopedia.com/index.php/glossary
Contains a comprehensive sales glossary on a wide range of sales and management
terms.
Glossary of
Sales and Marketing Terms
Free online sales training and selling glossary: sales techniques, selling skills
and methods.
Posted June 14, 2010
The answer depends on your circumstances. The general consensus amongst sales expense
policies and sales managers is that laundry and valet services provided at hotels
are allowable for reimbursement if the trip is extended over the anticipated number
of days. The number of days varies citied in policies varies but it′s usually
over four days.
You need to supply receipts for these services if they are not itemized on your
hotel bill or if the hotel does not provide these services.
It may be your personal bias and definition of what makes a great salesperson that
is getting in the way of great hires.
Great salespeople are made not born, but they are made a long time before they ever
show up on your doorstep. In his book Outliers, Malcolm Gladwell talks about people
needing 10,000 hours of concentrated practice at something to be truly expert in
it. This experience generally comes very early in someone′s life.
Many of the attributes that make someone a great salesperson are soft skills that
are learned and imbedded in that person′s psyche long before they even contemplate
a career in sales. By the very nature of the work itself, successful salespeople
possess a unique set of personality attributes that enable them to succeed. There
are five key qualities that are essential for success:
Empathy. The ability to identify with customers, to feel what they
are feeling and make customers feel respected.
Focus. The ability to articulate goals clearly, stay attentive
to one topic and assign timelines.
Responsibility. The ability to take action when situations require
action and a person with a strong sense of responsibility does not place blame on
other people when placed in a difficult situation.
Optimism. The ability to focus on what can be done as opposed to
what cannot be accomplished.
Ego-drive. Persistence for the purpose of succeeding and above
all winning
These are also not easy things to uncover in an interview process and may transcend
extroverted and introverted, gregarious and soft spoken people and everything in
between.
In order to improve your batting average you should apply some science to your selection
process. First and foremost find a good psychometric assessment tool that will identify
the key characteristics and traits required to succeed in your sales environment
and give it to your top sales performers. You may want to try the Profile Sales
Assessment which measures twenty key qualities and seven critical sales behaviours.
Use the results to create benchmarks for all future hires. This is what is referred
to as your sales DNA profile. If you do the job right and commit to the process,
whether you are hiring for a senior or junior position, your hires will have what
it takes to become great sales representatives for your company.
It′s a lot better than picking someone based on a well written résumé and
your gut instincts.
Sales contests are a great way to encourage your sales teams to achieve specific
short-term goals. Keep in mind though when companies fail to follow rules or have
a "winner take all approach" this can result in reduced morale amongst those who
are not contest winners.
To prevent this from happening, anyone who participates in a contest should be eligible
to win a prize or reward even if it is of nominal value. Your salespeople are unique
and you need to consider what drives them and what prizes will incent them to participate.
Factors such as your employees’ ages and lifestyles mean that one type of incentive
may be more desirable than another (e.g. travel may be more attractive to 20 somethings
than 50 year olds who travel extensively as part of their job). To be effective,
your sales contests should reflect your company culture, your people and your business
objectives (read
Electron Theory Sales Compensation on how to determine if contest was effective).
As for prizes there are several companies that offer incentive programs for employees
and can manage your incentive and reward programs for you. Several of these companies
have online catalogues where you can go online to view the types of prizes that
they offer and obtain ideas for your own sales contest:
I Love Rewards is a leader
in results-driven rewards and recognition solutions. The company offers access to
a brand-name rewards catalogue, featuring the hottest electronics, travel, and gift
cards.
www.online-rewards.com
offers three online incentive program solutions scalable according a company′s
size. They offer thousands of prize ideas for both employees and consumers and have
created an online catalogue
http://online-rewards.com/category/13/ that covers 16 categories. It would
be a great source of ideas for your sales contest.
myreward.ca
has thousands of merchandise rewards to choose from. You can log into myrewards.ca
(user ID & password: guest) and see a wide range of incentive prizes that you can
pick from.
www.venngo.com is Canada's
leading provider of discount programs and value-added services for professional
associations, employee and member-based groups. ...
Posted March 22, 2010
There are several resources that outline the dos and don′ts of running an
effective sales meeting and these resources would be a good place to start:
Sales Meeting Checklist
Holding Effective Meetings
How to Plan a National Sales Meeting
How to Avoid Sales Meeting Headaches
Suggested Icebreakers for Meetings
A good list featuring some great ones for sales.
5 Annual Sales Meeting Ideas for Best Sales Conferences
As for ideas on how to get your sales team to be active participants, you may want
to assign your reps to handle specific topic areas on the meeting agenda or schedule
breakout sessions for sales activities.
One idea is to divide your team into small groups and have each group "sell" a new
product based on a scenario you provide to them. Award prizes based on the best
sales presentation.
Another great idea is to go around the table and ask each rep to share their best
ideas on breaking the ice and developing rapport with a new prospect on a sales
call. Compile a list and keep it "fresh" by periodically reviewing it.
Free Video Resources
A sales meeting is a perfect opportunity to incorporate sales training sessions
and help your reps "brush" up on their sales skills. You can ask your reps in advance
to come up with a list of difficult sales situations or problems that they have
encountered and ask the group for suggestions on how to solve them.
There are thousands of free video resources available on all aspects of sales and
sales management at www.candogo.com that are well worth checking out. You can include
clips in your sales sessions.
The added advantage to this approach is that you can develop a list of resources/takeaways
for your reps and share them with any new salespeople you bring onboard.
Posted October 13, 2009
Many companies use independent sales or manufacturer′s agents/agencies as
a sales channel for their products and services. There are many associations based
in Canada and the United States where you can advertise for an agent.
In addition there are several outsourcing companies that specialize in handling
direct sales (not to be confused with call centre or telephone sales operations).
In a recent article that appeared in CPSA′s Contact magazine on "Outsourcing the Sales Function" companies that specialized
in this function were Direct
Sales Force, Consumer Impact Marketing
and MarketLink Canada
Determining an appropriate job title is for a salesperson is often a difficult undertaking
as it depends largely upon the saleperson’s role (e.g. account maintenance or business
development), responsibilities/activities (e.g., customer service or bid preparation),
industry/educational requirements (e.g. certifications or degrees) and the percentage
of time allocated towards specific activities.
For example an Account Manager in one company may focus the majority of his time
on maintaining and managing key customer accounts. In another company the same title
may be applied to a salesperson who is responsible for both servicing existing customers
and developing new accounts.
First and foremost you need to have detailed a job description that outlines the
competencies, industry and educational requirements necessary for an individual
to succeed in the sales role. These requirements may vary if you have salespeople
who are based in different territories or handle different customer/industry segments
(e.g. general industrial sales vs. water/storage tanks).
There are several methods to determine whether your sales position titles accurately
reflect the salesperson’s true responsibilities. Peruse well-known job boards (e.g.
workopolis.com, monster.ca) and compare the online sales classifieds to your own
positions for ideas. Second Watson Wyatt publishes an Exhibit Book of Positions that contains over 2,200 professional,
managerial and clerical job descriptions including over 200 sales and marketing
positions. Contact CPSA′s Knowledge Centre
for details.
As a sales executive you should review your sales titles and job descriptions every
15 months to determine if they need to be updated or modified. In addition any major
shift in the strategic direction of the company (e.g. merger, acquisition of new
product lines or change in distribution channels) should also trigger a review.
Posted November 16, 2009
In general, expenses incurred in order to earn business or property income are tax
deductible, however the amount that can be deducted for meals and entertainment
expenses (e.g. food, beverages and entertainment) is 50 per cent of:
- the actual cost or a "reasonable" amount under the circumstances.
The Canada Revenue Agency explains allowable meal and vehicle expenses deductions which can be claimed
without keeping receipts. The simplified method of claiming meals allows a claim
of $17 per meal, to a maximum of $51 per day. Fifty per cent of this would be deductible.
These limits also apply to the cost of your meals when you travel or go to a convention,
conference, or similar event. However, special rules can affect your claim for meals
in these circumstances. For more details, see Travel and Convention expenses. There is a higher allowable deduction
for meal costs during eligible travel periods of long-haul truck drivers.
However, the above limit (50%) does NOT apply if any of the following:
- when meals and entertainment are provided as compensation to customers, and you
are in the business of providing meals or entertainment (e.g. restaurant, hotel,
motel);
- when the meals and entertainment are billed to your customer, and are itemized on
the invoice or bill;
- when the meal and entertainment costs are included in an employee's income or would
be included if the employee did not work at a remote or special work location, and
the expenses are not for a conference, seminar or similar event;
- when meal and entertainment expenses are incurred to provide a party or event (e.g.
awards dinner or company Christmas party) to which all employees from a particular
location are invited (limit of 6 of these events per year);
- when meals are provided to employees housed at temporary work camps installed for
the purpose of providing meals and accommodation to employees working at a construction
site, and the employee cannot be expected to return home daily. The special work
location must be at least 30 kilometres from the closest urban centre that has a
population of 40,000 or more people; and,
- when the meal and entertainment expenses are for a fund-raising event, the primary
purpose of which is to benefit a registered charity.
Entertainment expenses include tickets and entrance fees to an
entertainment or sporting event, gratuities, cover charges, and room rentals such
as for hospitality suites.
If you are a GST/HST registrant, you can only claim an input tax credit for the
portion of the expenses that are deductible for income tax purposes. For most meals
and entertainment, the input tax credit would be for only 50% of the GST or HST
paid.
Posted March 8, 2010
Standard Industry Classification (SIC) codes were originally developed to classify
establishments by the type of activity in which they are primarily engaged to help
compare them with others back in the 1930s.
In recent years, rapid changes in both the U.S. and world economies brought the
SIC under increasing criticism so much so that the US Office of Management and Budget
(OMB) established the Economic Classification Policy Committee (ECPC) to revise
SIC.
The ECPC and Statistics Canada reviewed the existing structure of detailed "4-digit"
industries in the 1987 U.S. SIC and the 1980 Canadian SIC for conformance to economic
concepts.
|
XX |
Industry Sector (20 broad sectors up from 10 SIC) |
|
XXX |
Industry Sub sector |
|
XXXX |
Industry Group |
|
XXXXX |
Industry |
|
XXXXXX |
U.S., Canadian, or Mexican National specific |
The longer code accommodates the larger number of sectors and allows more flexibility
in designating subsectors. It also provides for additional detail not necessarily
appropriate for all three NAICS countries (Canada, United States and Mexico).
The chart below shows the NAICS sectors and the SIC divisions from which their primary
components were derived.
|
Code |
NAICS Sectors |
SIC Divisions |
|
11 |
Agriculture, Forestry, Hunting, and Hunting |
Agriculture, Forestry, and Fishing |
|
21 |
Mining |
Mining |
|
23 |
Construction |
Construction |
|
31-33 |
Manufacturing |
Manufacturing |
|
22 |
Utilities |
Transportation, Communications and Public Utilities |
|
48-49 |
Transportation and Warehousing |
|
42 |
Wholesale Trade |
Wholesale Trade |
|
44-45 |
Retail Trade |
Retail Trade |
|
72 |
Accommodation and Food Services |
|
52 |
Finance and Insurance |
Finance, Insurance, and Real Estate |
|
53 |
Real Estate and Rental and Leasing |
|
51 |
Information |
Services |
|
54 |
Professional, Scientific, and Technical Services |
|
56 |
Administrative Support; Waste Management and Remediation Services |
|
61 |
Educational Services |
|
62 |
Health Care and Social Assistance |
|
71 |
Arts, Entertainment, and Recreation |
|
81 |
Other Services (except Public Administration) |
|
92 |
Public Administration |
Public Administration |
|
55 |
Management of Companies and Enterprises |
(parts of all divisions) |
Posted January 4, 2011
The difference between sales and business development depends upon the context—job
description/title, business activity or function. When viewed within the context
of a job function, sales is a much more tactical and hands-on activity. Sales involves
an individual's interaction with a client/customer to assist them in making informed
purchasing decisions. A key component of sales is client management and a salesperson′s
success depends largely upon their ability to develop, maintain and sustain the
relationship with the client before and after the deal is executed. Sales may be
viewed as a subcategory of business development.
Typically business development is much more strategic, encompassing a much broader
focus than sales and it is generally viewed as a sub category under the marketing
function. Business development is about developing new channels, models and partnerships.
It involves activities such as strategic and long-term planning, market analysis,
and competitive research in order to determine a list of prospects to approach,
markets to enter/exit, and new features to add to your product or new services to
your portfolio.
Depending upon the company's size a salesperson may be asked to fulfill both a sales
role and take on some aspects of business development. Additional skills and business
acumen may need to be acquired if a salesperson is going to be asked to take on
business development e.g. experience in marketing strategy, competitive analysis
etc.
Posted January 4, 2011
McKinsey & Company has released a new research report that identifies destructive
sales practices and prioritizes what customers want from B2B sales organizations.
The company interviewed 1,252 purchasing decision-makers of high tech products and
services at small, medium and large business in the U.S. and Western Europe.
There was a big difference between what customers said was important and what actually
drove their behavior. Customers insisted price and product aspects were the dominant
factors that influenced their opinion of a supplier’s performance and, as a result,
their purchasing decisions. Yet when we examined what actually determined how customers
rated a vendor’s overall performance, the most important factors were product or
service features and the overall sales experience. The upside of getting these two
elements right is significant: a primary supplier seen as having a high-performing
sales force can boost its share of a customer’s business by an average of 8 to 15
percentage points.
1. The buyer′s experience and interaction with sales and product or service
features were cited as being the most important factors in a purchase decision –
not price. (All the more interesting given that the survey was conducted during
the recent economic downturn).
2. A high performance sales force can boost share of customer by an average of 8
to 15 per cent.
3. The two most destructive sales behaviours (accounting for 55 per cent) that undermined
the sales experience for buyers were inadequate product knowledge and excessive
customer contact.
|
Where sales reps go wrong? |
|
Too much contact (via e-mail, by phone or in person) |
35% |
|
Lack of knowledge about either their products or those of their competitors |
20% |
|
Other factors* |
20% |
|
Lack of business/industry knowledge about usefulness of their product or service
to my business |
9% |
|
Sales style too aggressive |
8% |
|
Forgotten and/or ignored after contract is signed |
8% |
*Other reasons cited include the following issues: inconsistent sales team, slow
response to sales-related inquiries, too little contact, no help in optimizing spending,
no single point of contact available, and no information sharing on matters specific
to my business.
The most research on the subject is a survey titled "The New Social Media: Do They
Enable B2B Selling." The survey conducted by ESR Research with the assistance of
the TAS Group asked approximately 400 B2B sales representatives about their experiences
with social media. The results are as follows:
- 86 per cent of respondents do not use Jigsaw nor has it helped them win a sales
opportunity;
- 69% of respondents do not use Twitter. Of those that do (31%), 20% have said that
it has NOT helped them win a sales opportunity;
- 35% have reported that LinkedIn has helped them sometimes or often to win a sales
opportunity;
- 51% do not use Hoovers or OneSource, or they have never helped them win a sales
opportunity; and,
- 8% of respondents have said FaceBook has helped them win sometimes or often a sales
opportunity.
Posted April 19, 2010
For technical sales representatives, who may also be referred to as Field Technical
Product Support Specialists, Pre-Sales Consultants, Post-Sales Consultants), a great
deal depends upon the educational qualifications, industry experience and professional/industry
certifications sought by the employer.
In general employers prefer technical salespeople to have a Bachelor′s degree
in a specialized area (e.g. life sciences, agriculture, computer programming). If
only a university degree in a technical discipline and industry/sales experience
is required then the years of experience are outlined below:
- Senior Technical Sales between 5-7 years of experience
- Intermediate Technical Sales between 2-4 years of experience
- Junior or Associate Technical Sales less than 2 years of experience
For Sales Technologists and Engineers the requirements are much more rigorous.
Engineering technician and technologist programs are offered throughout several
Canadian colleges. Through transfer agreements and institution partnerships, graduates
of these engineering technology programs may be credited for their previous education
when they apply for a Bachelor of Engineering degree program.
In addition to the meeting the educational qualifications, engineering technicians
and technologists are required to be members of a designated provincial association.
These associations offer a certification process, which upon completion allows members
to one of the following exclusive, protected titles: Certified Engineering Technologist
(C.E.T.) Applied Science Technologist (A.Sc.T.) or Certified Technician (C.Tech.).
Engineering degree programs are offered throughout Canadian universities in a wide
range of specializations (e.g. software, mechanical, aerospace etc,). Likewise engineers
are required to belong to a provincial association which grants members a licence
to practise professional engineering, and authorizes businesses to provide engineering
services to the public. These licensing bodies set standards for and regulate engineering
practice. Licensed professional engineers can be identified by the P.Eng. after
their names.
Depending educational requirements required by the employer, the years of experience
are outlined below:
- Senior Sales Engineer more than 7 years of experience
- Intermediate Sales Engineer between 5 to 7 years of experience
- Associate Sales Engineer under 3 years of experience
Posted April 19, 2010
Many companies have now started to look into ways of finding an employee who behaviourally
fits their job position. If done properly, taking more time to find the right candidate
can cut costs and save the company a lot of time and energy in the long run by reducing
staff turnover. Many employers have incorporated online behavioural assessments
into their recruitment and selection processes.
Unlike the United States which has conducted recent studies on this subject, Canadian
statistics are harder to come by.
According to the latest figures (2003), seventeen per cent of employers do NOT use
any form of pre-hiring assessment tool. The percentage of Canadian employers who
use one selection tool is 50.8% while employers who use two or more selection tools
is 31.8%.
Employers who use a skills assessment rank at 10.7% while employers who incorporate
an aptitude or personality test into their selection process rank at 8.6%
Source: V.M. Catano and A. Bissonnette. 2008. Evolution of Selection Tools Used
by Canadian Employers. Unpublished manuscript. Halifax.
Posted March 22, 2010
The last detailed research that looked at this topic was conducted by Sales and
Marketing Magazine in conjunction with Hay Management Group (US). The costs for
four different types of sales calls are as follows:
Transactional Call (sell on price; product is a commodity): $56.52
Feature/Benefit (price and features equally important): $142.63
Solution (tailor products to client′s needs; price is secondary):$164.97
Value-Added (use team-sell approach; solution more important than price): $211.56
Source: Sales & Marketing Management′s 2000 Cost Per Sales Call Survey. All
figures in US dollars.
For more information and charts on the cost of a sales call by type of sales approach,
industry, size of sales force and geography, click here.
In addition there was research done by Cahners Advertising Group in the early 90s
comparing the cost of an inside vs. outside sales call.
Posted October 6, 2009
All accounts are not created eq ual and you will need to classify your accounts
based on the value they represent to you and your sales territory. In a strategic
selling context the "80/20 Rule" applies, which means that the top 20 per cent of
the accounts in a sales territory usually yield about 80% of the profit.
There are many methods available for classifying accounts but the most widely used
is an "ABCD" system, whereby accounts are classified according to the 80/20 rule.
"A" accounts represent the top 20% within a territory
"B" accounts represent the next 30%
"C" accounts represent the next 30%
"D" accounts represent the final 20%
Once your accounts have been classified you can forecast the profitability from
each classification by using the following calculation:
Forecasted % of total profit of account classification
|
=
|
Expected classification profitability
(Account 1 + Account 2 + Account 3 +...)
Expected total territory profitability |
X 100 |
Based on 1,200 hours per year of sales time, this translates into:
|
Account classification |
Forecasted % of total profit
|
Hours allocated of 1,200 available |
Number of customers |
Annual hours per customer |
|
A |
45 |
540 |
20 |
27 |
|
B |
20 |
240 |
30 |
8 |
|
C |
25 |
300 |
30 |
10 |
|
D |
10 |
120 |
20 |
6 |
|
TOTALS |
100
|
1,200 |
100 |
- |
The above is just one example. Some territories (based on factors such as geography,
industry, and distribution channels) may be very different.
Posted October 11, 2010
To use a baseball metaphor, the worst thing a salesperson can do is more pitching
than catching. By that I mean the salesperson pitches the product before they′ve
asked enough good questions and caught all the answers. But the temptation to pitch
is hard for many salespeople to resist, because that′s what they think they
are there to do. Once they trip over that line, they are clearly on the offensive
and rarely throttle back into the consulting role they should be in.
I would advise sales professionals to leave pitching where it belongs—in baseball—and
think about themselves as doctors with patients. Doctors generally start an examination
with broad questions and then narrow the focus until they isolate the problem. Only
then do they provide a diagnosis and a remedy. It is usually a positive, considerate
and friendly exchange that makes you confident you’re in competent hands. And after
the appointment, you generally feel better. That’s how your want your clients to
feel after meeting with you.
So, go on your next sales call with the mindset of a doctor, eager to diagnose.
Spend more time catching answers to good questions and less time pitching the product.
Trust the process, and it will reveal if and how your product can help the client
do something better. And along the way you will be building a valued, long-term
relationship with your customer.
Posted September 15, 2010
As a salesperson with limited time available you need to decide how to invest the
time in the most productive and profitable manner possible.
The formula for Return on Time Invested(R.O.T.I.) is used to judge the efficiency
of your selling efforts, and of your entire territory…or of individual accounts
and sales opportunities. R.O.T.I. is calculated as follows:
|
Return on Time Invested (R.O.T.I.) = |
Expected Gross Profit (EGP) |
|
|
|
|
|
Time (T) required to capture EGP |
The Canadian Professional Sales Association’s Professional Selling online and in-class
programs offer training on how to incorporate R.O.T.I. to improve profitability.
Here are a few suggestions excerpted from the course:
1. Set minimum R.O.T.I. standards on a daily, weekly or monthly basis for the following:
- Your overall territory
- Existing accounts, new accounts, and prospective accounts
- Big accounts, medium accounts, and small accounts
- Accounts in certain geographical areas
- Individual product lines
2. Manage current customer relationships in order to maximize R.O.T.I. Look for
ways to reduce time spent on the account or increase sales volume in the same amount
of selling time. Alternatively, look for opportunities to improve selling prices.
3. Maximize R.O.T.I. with each new or prospective customer. Determine minimum selling
prices based on desired R.O.T.I. and the time required to secure the customer. Or,
in competitive pricing situations, establish the amount of time available to secure
the customer, based on minimum expected R.O.T.I.
4. Determine which prospects offer the best financial viability. Some opportunities
may not yield a desirable R.O.T.I. possibly because they require too much time to
secure and maintain a small volume of business or because they are demanding too
low a price.
5. Constantly ask yourself, "How is what I′m doing right now directly tied
to revenue generation, and how is it helping me to improve my R.O.T.I. or profitability?"
Additional Resources
Michelle Cain, founder of Cain Sales Solutions wrote Increasing your R.O.T.I.: Return on Time Invested
Paul J. Meyer founder of
Success
Motivation Institute has authored numerous full-length programs to help
people achieve their goals. He has developed a workshop titled “High Payoff Activities,”
written an e-book The Power of Goal-setting and numerous articles, namely .
Bnet offers business management
and strategy advice for professionals and has over 500 articles, videos and case
studies on R.O.T.I.
Posted March 22, 2010
This is a tough question because in a recovery market you are not only battling
the competition but you have to overcome the fears and insecurities of your recession
battered clients.
The word "recovery" is only relevant to buyers if they are experiencing it directly
in their own business. As your clients see tangible evidence that their business
is gaining momentum, they will feel more confident and begin to make buying decisions.
Also remember not all businesses recover at the same rate. Some recover earlier
than others. Hopefully you’ve stayed close to your account during the recession
and you understand where they fit along this continuum.
Nonetheless there are some things you can do to nudge the process along.
Timing and top of mind awareness will ultimately play a big part in whether or not
you get the order, so you need to work extra hard at staying in touch with your
client. But apply controlled persistence. You don’t want to become a pest. And try
to add relevant value in your communications with your client. This could take the
form of industry, product or market intelligence that you supply to them on an ongoing
basis.
Also, in any sales situation there is no substitute for asking a lot of questions
and listening to your client to uncover what is really important or problem areas
for them. In fact this skill is probably more important in a recession or recovery
period because the solutions tend to be non-linear.
For instance, if you haven′t already tried it, explore whether or not extended
payment terms will tip the balance in your favour. This is a non-linear solution
because it has nothing to do with the virtues of your product and everything to
do with your client′s cash flow and budget.
Scarcity is another great tactic, providing of course it′s legitimate. It
is quite possible that, as a result of the recession, your company has limited stock
on hand. Advising your client that they might want to stock up now to avoid disappointment
later may do the trick.
Abundance can also work in your favour. Offering your client overstock, at an attractive
price point, combined with a time limited offer, can motivate cautious buyers.
Risk avoidance is another good discussion to have with your client. If your client
is relying on one supplier for all of their needs, what about suggesting that your
products become a secondary solution. This is especially important if your client
ramps up their business quicker than the incumbent can supply. You will be providing
your client with the security of a back up plan.
So, in summary, stay close to your client, create top of mind awareness, ask lots
of questions, think non linear, and if relevant, try using extended payment terms,
scarcity, abundance or risk avoidance, to help convince your client to place that
order.
Updated February 8, 2010
Business operations in Canada may be carried on through a variety of structures
such as a corporation, a sole proprietorship, a limited or general partnership or
a joint venture. Given the advantage of limited liability offered by a corporation,
it is generally the most common choice of business structure.
Federal and Ontario corporations are prohibited from incorporating under a name
which is the same as or similar to a name which is already in use anywhere in the
jurisdiction of incorporation, if the use of such name by the corporation would
be likely to mislead.
The federal Companies Branch screens all proposed corporate names and must accept
the proposed name as available for use as a condition of incorporation under that
name. The Ontario Companies Branch does not screen the availability of a proposed
name.
A federal corporation, once incorporated, will generally be granted clearance for
the use of its name across Canada.
A federal or Ontario corporation carrying on business in Quebec must have a French
name. The word "Limited," "Limitée," "Incorporated," "Incorporée"
or "Corporation" or the corresponding abbreviations "Ltd.," "Ltée," "Inc."
or "Corp." must be part of the name of every corporation.
A corporation may use the Companies Branch corporation number assigned to it as
its corporate name (e.g., 123456 Ontario Inc. or 123456 Canada Inc.).
In addition a federal or Ontario corporation is prohibited from carrying on business
or otherwise identifying itself to the public in any province under a name other
than its full corporate name, unless that name is registered by the corporation
under applicable provincial business names legislation. Most business names legislation
also requires that, notwithstanding the registration of a business name, the corporation
must set out its full corporate name in legible characters on all contracts, invoices,
negotiable instruments and orders for goods or services issued or made by or on
behalf of the corporation.
Posted November 28, 2010
Make sure you know with whom you are dealing. Also consider what information they
want, and if it is reasonable for what you want from the site. If you're not sure,
look to see if it is certified by an Internet Trust Organization. If it is a retailer
you don’t know, you might want to use a free third party payment tool like PayPal,
an eBay company. PayPal protects you by allowing you to pay retailers through a
PayPal account linked to your credit card or checking account, instead of giving
your account information directly to a retail website you never heard of. PayPal
also offers an optional personal security device, a very safe way to protect yourself
when paying online.
Since the advent of Sales Force Automation (SFA) and Customer Relationship Management
(CRM) there is not much call for this type of template as these systems generate
reports based on the salesperson's input for the sales manager to review and track
their progress in developing the lead. Many of these reports can even be presented
in "graph" format allowing the sales manager to see exactly where the salesperson
is spending their time.
Microsoft offers several free lead tracking templates on their website that can
be tailored to meet your needs:
Detailed leads tracker http://office.microsoft.com/en-us/templates/TC012342041033.aspx?CategoryID=CT101436151033
Follow your sales pipeline http://office.microsoft.com/en-us/templates/TC012253531033.aspx?CategoryID=CT101428241033
Quarterly leads tracking http://office.microsoft.com/en-us/templates/TC100310891033.aspx?CategoryID=CT101436151033
Posted June 14, 2010
There are a number of software programs that will allow companies to transfer their
printed product catalogues into digital or even CD-ROM formats. A lot depends upon
the format that the original product information has been captured in (e.g. text,
CSV, HTML, PDF, SIF or CAD files).
You may want to check out the following providers:
Technicon′s CustomCommerce
http://www.technicon.com/solutions_catalog.html
Aglaia′s
EpaperFlip software allows you to send your digital catalogue to your clients
via e-mail or on a CD-ROM in addition to making your catalogue accessible through
your website at all times.
BrotherSoft offers GT Salesman Product Catalog software and you can download
free trial versions from their website.
ChronSystem′s CatalogVX
product allows you to create and maintain product catalogues in-house. It is ideally
suited to retail and wholesale operations.
InstaCat software
is an affordable solution that allows you to incorporate video and audio clips into
your catalogue.
Updated January 25, 2010
Companies are still spending money on training but the training market in North
America was relatively flat in 2008 from 2007 and is expected to decrease significantly
in 2009 from 2008 according to US industry predictions.
As for Canadian statistics the Canadian Federation of Independent Business (CFIB)
has found that a small business owner spends an average of $2,700 annually per employee
on all forms of training, and for new ones with no experience the cost rises to
$5,400. The
CFIB report said that while informal training represents nearly three-quarters
of the average training expense, small- and medium-sized enterprises (SMEs) have
also dramatically increased their use of formal training representing a national
investment of $18 billion on employee training.
In addition Statistics Canada ran an Access and Support to Education and Training Survey (ASETS)
in 2009 but the results will not be available until November 2009 according to the
Learning Policy Directorate at Human Resources Social Development Canada.