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′scompensation 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: