Compensation Plan Design · Glossary

Crediting Hierarchy

A crediting hierarchy defines which manager rolls up credit from which reps, and is what drives manager override commissions and rollup reporting. It is often assumed to be the same as the CRM reporting hierarchy, and it frequently is not. That mismatch is a leading cause of commission errors, and it is largely invisible until someone is paid on the wrong team.

What is a crediting hierarchy?

A crediting hierarchy is the structure that defines which manager rolls up credit from which reps. It is what makes a manager override commission possible: when a rep on the team closes a deal, the manager earns credit on it through the hierarchy.

Like an overlay, rollup credit is additive. It does not reduce the rep's credit. The same revenue is credited to the rep and, through the hierarchy, to their manager, and often to that manager's manager as well.

The critical and frequently missed point is this: the crediting hierarchy is not the same thing as the CRM reporting hierarchy, and assuming they are identical is a leading cause of commission errors.

Why the two hierarchies diverge

SituationCRM hierarchy saysCrediting hierarchy should sayA rep changes manager mid-quarterThe new manager, immediately.It depends. Deals closed before the move may still roll up to the old manager.A rep reports to a people manager but sells into another's territoryThe people manager.Possibly the territory manager, for credit purposes.A manager also carries a personal quotaOne node in the tree.Two roles: their own deals, and their team's rollup, paid differently.An interim or acting manager covers a teamOften not updated at all.Someone must roll up those deals, and the plan should say who.A matrixed rep has two managersOne, because the CRM demands one.Both may legitimately roll up, on different plans.

Every row is a case where the CRM is answering a reporting question and the comp plan needs an answer to a crediting question. Those are different questions, and the CRM was not designed to answer the second one. When commission is built directly on the CRM tree with no separate crediting hierarchy, all five of these situations quietly produce wrong numbers.

The mid-quarter manager change

This is the case that catches almost everyone, so it is worth working through.

Maya moves from Team A to Team B on 15 February. She closes a $50,000 deal on 20 February. Which manager gets rollup credit?

The CRM will say Team B, because the CRM records the state of the world today. But if the deal was worked for three months under Team A's manager and closed five days after the move, crediting all of it to Team B is defensible only if the plan says so. If the plan is silent, whoever runs the calculation decides, and they will decide by whatever the CRM happened to say on the day they ran it. That is not a crediting policy. That is an accident with a timestamp.

Reasonable plans handle this in one of three ways: credit by the commission period in which the deal closed, credit to the manager who owned the rep when the opportunity was created, or split the rollup. All three are defensible. Silence is not.

What this means?

For Finance, manager rollup is an additive commission cost layered on the same revenue, exactly like an overlay. On a deal that a rep, a manager, and a second-line manager all get credit for, the total commission expense is materially higher than a simple rate calculation implies. If the accrual does not model rollup, it is too low, every month, by a predictable amount that nobody has quantified.

For RevOps, the practical instruction is to maintain the crediting hierarchy as a separate object from the CRM tree. They will agree most of the time, and the times they disagree are exactly the times that generate disputes. A hierarchy that simply mirrors the CRM inherits every reorganization, every interim cover arrangement, and every uncorrected reporting line, and applies them retroactively to commission.

How Visdum handles crediting hierarchies

Visdum models the crediting hierarchy independently of the CRM reporting structure, which is the whole point. Manager rollup and override credit are configured against that hierarchy, so a reorganization in the CRM does not silently rewrite who was credited on deals that closed months ago.

Rollup credit is applied as additive credit, in the same way as an overlay, so a manager earning on their team's deals does not reduce the rep's credit. Because the hierarchy is versioned along with the plan, a mid-quarter manager change is a recorded event rather than a retroactive rewrite, and the audit trail shows which hierarchy was in force when a given period was calculated. For Finance, the full commission expense on a deal, including every layer of rollup, is visible in one place.

Take a self-guided product tour to see this in action, or read the complete commission close playbook.

Related terms

Crediting Model · Overlay Commission · Multi-Party Commission Split · Commission Accrual · Commission Audit Trail

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Frequently asked questions

What is a crediting hierarchy?

A crediting hierarchy defines which manager rolls up credit from which reps, and it is what makes manager override commission possible. Rollup credit is additive, so it does not reduce the rep's credit. The same revenue is credited to the rep and, through the hierarchy, to their manager and often the manager above them.

Is the crediting hierarchy the same as the CRM hierarchy?

Frequently not, and assuming they are identical is a leading cause of commission errors. The CRM answers a reporting question, namely who someone reports to today. The comp plan needs an answer to a crediting question, namely who should earn rollup on a deal that closed under particular circumstances.

What happens when a rep changes manager mid-quarter?

The CRM will credit the new manager, because it records the state of the world today. Whether that is right depends on the plan. Reasonable options are to credit by the commission period the deal closed in, to credit the manager who owned the rep when the opportunity was created, or to split the rollup. Silence is not an option.

Does manager rollup reduce a rep's commission?

No. Rollup credit is additive, exactly like an overlay. The rep keeps full credit on their deal, and the manager earns separately through the hierarchy. If rollup appears to be reducing a rep's credit, it has been configured as a split by mistake, which is a crediting error rather than a plan design choice.

How does crediting hierarchy affect the commission accrual?

It raises the true cost. On a deal credited to a rep, their manager, and a second-line manager, total commission expense is materially higher than a simple rate calculation suggests. An accrual that does not model rollup is too low every month by a predictable amount that most companies have never quantified.

Why should the crediting hierarchy be maintained separately?

Because a hierarchy that simply mirrors the CRM inherits every reorganization, interim cover arrangement, and uncorrected reporting line, and then applies them retroactively to commission. The two structures agree most of the time, and the occasions when they disagree are precisely the occasions that generate disputes.