Those running a SaaS partnership program knows how essential automated partner payouts are and how much of a time sink manual payout processes can be. An effective partnership ecosystem often involves a diverse array of partners, with varying partnership types and commission models to adhere to.
This can make tracking and sending payouts complex, often requiring multiple employees to spend upwards of 40 hours per month managing the process. A whole week of working time just to get your partners paid? There’s a better way.
We spoke with PartnerStack Product Manager Ajay Bala to dive into the world of automated partner payouts at PartnerStack and learn how this process can save vendors time and resources and increase partner satisfaction through transparent and timely payouts.
In this article, we will share:
- What are the most common payout methods for partner programs in 2024
- Benefits to automated payments for program partners and managers
- Expert tips on how to do all this with ease
What are some common partnership payment models, and how do they work?
For partners, incorrect or late payments can be a huge frustration. Partner relationship management tools like PartnerStack help manage indirect sales ecosystems by automating and taking the work out of partner payouts for both B2B SaaS companies and their partners.
For most partnership types — the most common in B2B being affiliate and resell or co-sell — Bala shares that there are a few common commission structures:
- Revenue-sharing model: In this model, for every customer sign-up, the vendor will pay a set commission to the partner (ex. 20 per cent of a yearly subscription fee)
- Flat structure model: For every customer sign-up the vendor would pay the partner a flat commission (ex. $100 per sign-up)
- Month-to-month reward model: In this model, the commission is broken into payments that are made at regular increments (ex. A one-year subscription in which the partner is paid 30 per cent of the subscription for each month, rather than a lump sum for the entire year-long subscription)
As a bonus, vendors may choose to offer partner challenges to their partners to drive accelerated growth or re-engage with inactive partners:
- Challenges: These are one-off incentives that vendors can initiate to incentivize partners (ex. If a partner refers 20 customers over the next month, the vendor will double the value of the current reward)
Related: What is co-selling in a partnership ecosystem, and how can you do it?
Common pitfalls of manual payouts for SaaS companies
With so much nuance involved, manual payment calculations are both time consuming for the partner program manager and finance team — plus, they offer very little transparency to partners.
Bala notes some of the downsides of manual partner payouts (for both the partner and SaaS company) include:
- Bandwidth: The SaaS company must allocate many hours for documentation and tracking (sometimes among multiple team members) in order to reconcile all the partner account data
- Risk of error: Tracking and aggregating data can result in human error
- Lack of visibility: Partners have very little visibility on the rewards they would receive with no ability to live track
- Irregular payment intervals: Without an automated payment schedule, partners have no visibility into when they will receive their next payout
The process of automating partner payouts
Bala shares the automated process that helps solve these problems for both SaaS companies and partners of the platform. Based on the commission structure models outlined above, partner programs managed in the PartnerStack ecosystem can set up triggers, which are automation tools that generate commissions for a partner.
The commissions trigger instantly so both SaaS company and partners don’t have to wait until the end of month for tracking; it will show up in the PartnerStack dashboard instantaneously. As a partner, you will be able to see the commission amount and the vendor it's received from.
Similarly, the SaaS company will be able to see the commission amount and the partner in their dashboard. This visibility makes tracking ROI of each partnership simple and seamless.
Bala highlights feedback from a PartnerStack customer on this process: “PartnerStack is automating our extremely manual program. This partnership is going to save us countless hours of contracting and payouts.”
Partner program managers can choose to make payments weekly, monthly or quarterly (with the most common payment interval being monthly).
Example monthly payment schedule
- September 1 to 30: Live updates of all commissions within your PartnerStack dashboard
- September 31: Payment invoice is automatically generated and emailed to the partner program manager
- October 1 to 7: Program manager reviews invoice
- October 8: Invoice charged
- October 8 to 12: Payment processing period
- October 13: Funds available for the partner to withdraw
Related: 6 ways to automate partner management with PartnerStack.
How B2B SaaS companies benefit from automated partner payouts
Automating partner payouts creates more visibility and ease for all involved in the partnership.
Benefits to the B2B SaaS company
- Reduced amount of time on partner payments. Typically, partner program managers cut their time spent from 40 to 50 hours devoted to partner payouts to just two hours per month (usually spent reviewing invoicing)
- Automated payments automatically detect and flag fraudulent activity
- Accurate data reporting with all commissions fully transparent and exported as a CSV file monthly
- Easy-to-use dashboard for realtime reporting
The feedback speaks for itself. One PartnerStack network partner shares, “Payouts and contracts are always clear and on time. I never have to worry about the payouts from PartnerStack. Always on time and automatic.”
Benefits to the partner
- Full visibility of their earnings throughout the month in the PartnerStack dashboard
- Regular timely payments and accurate estimates of when funds will be ready to be withdrawn
Partners are also often part of multiple partner programs, sometimes with multiple logins. PartnerStack can bring a host of programs under one roof, making it easier to track results and consolidate payments across multiple programs.
Both SaaS companies and partners can benefit from the time and stress saved with automated partner payouts. Vendors just need to review payments in their dashboard on an occasional basis and let the automation do the rest, meaning more of your valuable time to grow indirect sales and less on account management. Partners know their commissions are coming on time and in the right amount. It’s a true win-win!
This article was originally published in November 2022.
