How to find and file every short-paid commission.

Commission is more than four fifths of a travel agency’s revenue, and a large share of it arrives late, short, or not at all. The industry’s own numbers say how large.

Why commissions go short

Almost never fraud. Almost always process. A hotel pays on the rate the property management system holds, not the rate you booked. A cruise line pays on the fare net of a promotion you did not know was non-commissionable. A tour operator pays the base rate and forgets the override. A statement arrives with your IATA number wrong by one digit and the money sits in a suspense account. A guest changes dates at the desk and the booking you tracked no longer exists under the number you have.

Every one of these is recoverable, and every one of them is invisible if you only look at the statements that arrive. The commission that never arrives has no statement. That is why the method below starts from your bookings, not from the supplier’s paperwork.

The method

1. Build the expected side from your own bookings

   For every booking, record the commission you expected: gross commissionable amount, rate, and the resulting figure, in the booking’s currency. Your booking system already holds most of this. If it only holds the rate, the expected amount is gross times rate, and you should be able to see that arithmetic, not just its result.

2. Build the received side from every statement

   Hotel clearing statements, cruise line commission reports, tour operator remittances, direct bank credits. Match each line to a booking by confirmation number, and where a supplier pays in instalments, sum the instalments against one booking. Keep the currency each payment arrived in.

3. Subtract, per booking, per currency

   Expected minus received. Positive is a shortfall. Negative is an overpayment, which you note and do not chase. Never add a EUR shortfall to a USD one; two numbers are honest, one blended number is not.

4. Rank by supplier, then by age

   One supplier usually accounts for most of the money. Their claims go in one batch, referenced to one statement period, which is how their accounts payable team prefers to work it and how you get answered in one reply instead of forty.

5. File claims that can be paid without a conversation

   A claim that needs clarification goes to the bottom of the pile. One that can be keyed straight into a payment run gets paid. See the checklist below for what that takes.

6. Track each claim to money in the account

   Filed, acknowledged, partially paid, paid. A recovery you cannot see the status of is a recovery you will forget to follow up. When the money lands, close it against the original shortfall, not against the supplier’s total.

7. Repeat monthly, and keep the history

   The second month is faster than the first, and by the third you know which suppliers pay short as a matter of course. That knowledge is worth more than any single claim: it tells you which contracts to renegotiate and which to walk away from.

What a claim needs to contain

Suppliers pay claims that their own system can verify in under a minute. Give them:

• Their confirmation number, not your internal reference. Both if you have both.
• Guest name and stay or sail dates, exactly as booked.
• Your agency identifier: IATA, CLIA, ARC or the supplier’s own account number, whichever they pay against.
• The commissionable amount, the rate, and the amount you expected, so the arithmetic is on the page.
• What you received, and when, with the statement or payment reference it arrived under. If nothing, say nothing was received and give the date the stay or sailing completed.
• The difference, in the booking’s currency, as one number.

One line per booking, one file per supplier, one covering note. The note names the statement period and asks for either payment or the reason each line was paid as it was. Both answers are useful; silence is the only bad one.

When to escalate

Supplier payment cycles are known, so a shortfall has a date on which it stops being “probably in the post”. Hotels in a clearing network pay on average five to six weeks after checkout, and the clearing houses themselves publish a longer tail for properties outside the network (Onyx CenterSource). Cruise lines pay on published schedules, most within a few weeks of final payment or sailing (Travel Market Report’s table). Large hotel groups publish their own commission FAQs with claim windows (Marriott’s, for example).

• At the cycle plus 30 days, file the claim.
• At 60 days without an answer, resend to the supplier’s accounts payable contact rather than the sales contact, and copy your consortium or host agency’s supplier relations desk if you have one.
• At 90 days, for hotels, submit the case to ASTA’s Hotel Watch List (how it works), which has recovered tens of thousands of dollars for members by publishing which properties do not pay. Non-members can still use the data to decide where not to book.
• Beyond that, stop booking the supplier and say why. A supplier that owes you money and knows you have stopped is a supplier that finds the money.

Doing it in a spreadsheet, and why agencies stop

Everything above can be done in a spreadsheet, and most agencies start there. It works for one supplier and one month. It stops working when a payment covers eleven bookings across two months and three currencies, when the formula that computes expected commission gets pasted over, or when two people edit the sheet and nobody knows which copy is the record.

The tools that agencies move to fall into two groups. Full back-office systems that reconcile inside a CRM, which is right if you are choosing a CRM anyway. And a reconciliation layer that reads the export you already have, which is what MarginShield is. Read the honest comparison against a spreadsheet, Tern and Sion before deciding; the right answer depends on how your agency is set up.