How much money could you save if your sales commission payments were correct and paid on time?

For 2011 top stock picking firm Wedbush Securities, Inc, the answer recently was “almost $40k in legal fees.”

That $40k is just part of a recent settlement that Wedbush was ordered to pay a former sales rep. Claimant Randy LaCombe alleged the company failed to award contractually promised commissions from 2010 and 2011.

Additional settlement payments included:

• $94k in federal compensatory damages
• $14k in damages as specified by the state

You can read the full Forbes story here.

Regardless of whether this case was settled correctly, one thing is clear: The situation is unfortunate for both parties involved. Over a year is a long time for a sales rep to wait to be paid, and over $100k in damages is a sizeable sum for any company, no matter how large.

But the most unfortunate part is that the entire situation could have been easily avoided. Timely and accurate payments are just the start of a commission software tool’s benefits package.

Behavioral psychology shows that the sooner someone is paid for a job well done, the more likely that person is to repeat the same behavior. As you can imagine, this can create quite the virtuous cycle in a sales organization.

Accurate payments mean sales reps spend less time shadow accounting, and more time actually selling. Timely commission payments mean they taste the sweetness of their labor, and mentally associate the reward with the behavior.

This mental association can do wonders for company revenue. Just ask countless Xactly customers.

For example, Acme Packet reduced errors in their commission payments by 93%—while cutting the amount of time their finance team spent processing sales compensation payments by 94%. Read the full story to find out how Acme Packet improved sales performance.

Wedbush vs. Acme Packet. Which scenario would you choose?