Checklist and Guidance for auditing Compensation Results
Process to utilize for Every Bonus in your System
| Step | Process |
| 1 | Run compensation plan processing |
| 2 | Use summary report and do comparison ratios against actual sales report = Ratio analysis |
| 3 | Summary report review – this should make sense where sales came from |
| 4 | Audit no less than 20 randomly selected distributors including a good spread |
| 5 | Audit by no less than 2 individuals in your company to validate the audit results |
| 6 | Audit should be signed off on by Financial Officer validating results |
| 7 | Create checks
A. physical Checks B. file export |
| 8B | Audit check register |
| 9B | Sum this register up in excel and match to the penny to your summary report |
| 10B | Financial Officer sign off on results validating them
Reason: 1) Verify accuracy of processing 2) Establish controls to midigate employee theft, fraud, etc… |
| 11A | For Physical checks: make sure check numbers correspond to check register |
| 12A | Confirm number of records balance to the sum of checks needing to be printed |
| 13A | Physically count number of checks to verify |
| 14A | Send the checks |
| 15A | When large amount, have 2 signatures on file that audited and validated the processes |
Process for a Change in Compensation Plan- Auditing
| Step | Process |
| 1 | Run compensation plan processing |
| 2 | Use summary report and do comparison ratios against actual sales report = Ratio analysis |
| 3 | Summary report review – this should make sense where sales came from |
| 4 | Audit no less than 60 randomly selected distributors including a good spread |
| 5 | Audit by no less than 2 individuals in your company to validate the audit results |
| 6 | Audit should be signed off on by Financial Officer validating results |
| 7 | Create checks |
| Step | Process |
| physical Checks
file export |
|
| 8 | Audit check register |
| 9 | Sum this register up in excel and match to the penny to your summary report |
| 10 | Financial Officer sign off on results validating them
Reason: 1)Verify accuracy of processing 2)Establish controls to midigate employee theft, fraud, etc… |
| 11 | For Physical checks: make sure check numbers correspond to check register |
| 12 | Confirm number of records balance to the sum of checks needing to be printed |
| 13 | Physically count number of checks to verify |
| 14 | Send the checks |
| 15 | When large amount, have 2 signatures on file that audited and validated the processes |