Sample Sales Territory Quota Management

Sample_Documents

DISCLAIMER: This is a sample template provided for informational purposes only. It does not constitute legal, tax, or financial advice. Organizations should consult their own legal and tax advisors and tailor this document to reflect their specific business needs, geographies, and applicable laws.

Document Header

Field	Value
Document Title	Sales Territory & Quota Management
Document Type	Sales Territory & Quota Management
Category	Variable Compensation
Company	<Company Name>
Version	<Version Number>
Effective Date	<Effective Date: MMM DD, YYYY>
Next Review Date	<Next Review Date: MMM DD, YYYY>
Document Owner	Total Rewards, <Company Name>
Executive Sponsor	<Executive Title, e.g., Chief Revenue Officer>
Approvers	<Approver Name and Title> ; <Approver Name and Title>
Supersedes	<Prior Document Name and Version>
Geographic Coverage	<Countries/Regions>
Systems of Record	<CRM Name>, <HRIS Name>, <ERP/Finance System Name>, <BI Tool Name>
Related Policies	Sales Incentive Plan, Draw and Guarantee Policy, Job Architecture, Sales Credit Policy, Leave of Absence Policy, M&A Integration Playbook
Confidentiality	Internal Use Only

Purpose and Objectives

Establish standardized, auditable policies and procedures for defining sales territories and assigning sales quotas at <Company Name>.
Align territory coverage and quotas with strategic growth priorities, customer experience, and market opportunity.
Promote fairness, transparency, and compliance across all regions and selling motions.
Enable accurate forecasting, streamlined incentive compensation administration, and reduced disputes.
Provide a repeatable annual cycle for design, governance, and continuous improvement.

Scope and Applicability

In Scope

All quota-bearing sales roles within <Company Name> including but not limited to: Account Executives, Territory Managers, Channel Account Managers, Customer Success Managers with expansion targets, Sales Development with qualified opportunity quotas, Overlay Specialists.
All sales coverage models: direct, channel, hybrid, inside sales, enterprise, commercial, SMB.
Territory constructs: geographic, industry vertical, named accounts, product-centric overlays.
Quota types: bookings, billed revenue, annual recurring revenue (ARR), net new ARR, renewals, upsell/cross-sell, margin-based quotas where applicable.
Credit assignment rules, split credit, and exception handling related to territory and quota decisions.

Out of Scope

Non-quota variable pay plans for non-sales roles (see separate documents).
Compensation plan mechanics unrelated to territory or quota (e.g., commission rates, accelerators) except where crediting rules intersect with territory definitions.
Pricing, discounting approvals, and non-comp pay policies.
Sales enablement curriculum and training content development.

Applicability

Applies to employees and eligible contractors of <Company Name> in <Country/Countries> where permitted by local law.
Local deviations require documented rationale and approval per the Governance section.

Guiding Principles

Customer-aligned coverage to minimize account conflicts, improve response times, and support account growth.
Data-driven decisions using objective market opportunity metrics and historical performance.
Role clarity with documented territorial boundaries and account ownership.
Simplicity and scalability to reduce administrative burden and errors.
Predictability and stability with controlled mid-year changes and transparent relief rules.
Compliance with competition law, data privacy regulations, and pay equity standards across <Country/Countries>.

Definitions of Territory Constructs

Territory Dimensions

Geographic: regions, countries, states/provinces, postal code groupings.
Industry: NAICS/SIC-based verticals, e.g., Financial Services, Healthcare, Public Sector.
Named Accounts: specific high-potential accounts defined globally or regionally.
Segment: Enterprise, Commercial, SMB tiers based on employee count or revenue thresholds.
Product/Overlay: specialist coverage for defined product lines or solutions.

Territory Artifacts

Territory ID: unique identifier in CRM and ICM systems.
Named Account List: source-of-truth list with account IDs and ownership.
Boundary Definition: explicit inclusion lists (countries, ZIPs, industries) and exclusion lists.
Effective Period: start/end dates with version history and change rationale.
Capacity Profile: expected selling capacity, ramp status, and leave status.

Quota Types and Measurement

Bookings: total contracted value (TCV) booked in CRM at order close.
ARR: annualized value of subscription contracts at first-year run rate.
Net New ARR: total ARR from new logos plus expansions minus downgrades and churn.
Revenue: GAAP revenue recognized in the period, used selectively for renewals.
Margin: gross margin dollars or percentage for certain hardware or services SKUs.

Data Sources and Controls

CRM (<CRM Name>) is the single source of truth for accounts, territories, and bookings.
Finance (<ERP/Finance System>) is the single source of truth for revenue and currency rates.
HRIS (<HRIS Name>) is the source for headcount, hires, and leaves of absence.
Data refresh cadence: nightly for CRM to ICM; monthly for finance actuals; weekly for HRIS roster.
Control checkpoints: pre-go-live data validation, monthly reconciliation, quarterly audit sampling.

Territory Design Methodology

Annual Design Cycle

Market Segmentation: Define segments by size, industry, and region using <Market Data Source/Vendor Name> and internal data.
Opportunity Sizing: Estimate total addressable market (TAM), serviceable available market (SAM), and territory potential index (TPI) by segment.
Capacity Modeling: Calculate required coverage based on average quota per rep, win rates, cycle times, and productivity ramp.
Territory Boundary Drafting: Create logical, contiguous territories minimizing travel and maximizing account adjacency.
Stakeholder Review: Iterate with Sales Leadership, Finance, Operations, Legal, and Total Rewards.
Approval and Publish: Finalize maps, ownership lists, and effective dates as per Governance.
System Configuration: Load territories into CRM and ICM; conduct UAT and sign-off.
Communication and Training: Deliver manager toolkits and employee territory letters.

Territory Potential Index (TPI)

TPI combines indicators such as historical bookings (weight <Percentage>), propensity-to-buy score (weight <Percentage>), installed base (weight <Percentage>), and market firmographics (weight <Percentage>).
Example formula: TPI = 0.35 Historical Bookings + 0.35 Propensity Score + 0.20 Installed Base + 0.10 Segment Growth Rate.
Normalize TPI to 0–1 and use for quota allocation scaling and coverage decisions.

Account Assignment Rules

Account ownership aligns to legal entity and sold-to party in CRM.
Ownership priority: Named Account List overrides geography; Industry vertical overrides geography only where defined; otherwise geographic ZIP/postal mapping applies.
New account auto-assignment uses postal code and industry routing tables.
Orphan accounts are assigned to pooled coverage for up to <Number> days; after that, assigned to adjacent territories by TPI proximity.

Channel and Partner Boundaries

Channel-led accounts are designated by partner program flags in CRM.
Direct-channel conflict resolution: If partner-registered opportunity exists before direct engagement, credit split rules apply as defined below.
Public sector and regulated industries may require unique coverage and crediting aligned with public procurement laws in <Country>.

Coverage Stability and Mid-Year Changes

Avoid mid-year reassignments except for defined triggers: mergers/acquisitions, material compliance issues, employee transfer, territory vacancy exceeding <Number> days.
Mid-year changes require effective date, mapping of in-flight opportunities, and defined crediting transition window of <Number> days.

Quota Methodology

Top-Down and Bottom-Up Reconciliation

Start with corporate annual target approved by <Executive Team> and Board equal to <Amount>.
Allocate to regions based on TPI share, strategic growth priorities, and capacity constraints.
Bottom-up validation by managers using pipeline, customer expansion plans, and local conditions.
Reconcile deltas within a tolerance of ±<Percentage> at region level; document variances exceeding this threshold.

Quota Setting Steps

Determine corporate target by product and segment.
Calculate regional shares using TPI and strategic weights.
Adjust for capacity and ramp: apply ramp factors for new hires (e.g., 50% in Q1, 75% in Q2, 100% thereafter).
Apply seasonality indices by region and segment (e.g., Q4 weight 0.35, Q1 weight 0.20).
Set individual quotas to sum to regional target plus coverage buffer of <Percentage> to account for attrition and ramp.
Conduct reasonableness review: average quota per role vs. historical attainment distribution.
Finalize and publish quota letters with effective dates.

Quota Relief and Adjustments

Approved leave of absence: prorate quota for leave duration based on plan design and local law in <Country>.
Territory vacancy: unassigned quota held centrally or allocated to pool coverage; no double counting.
Product sunsetting or supply constraints: adjust quotas prospectively with documented rationale.
M&A events: freeze quotas during integration period of <Number> days and reissue once account mapping stabilizes.
Currency fluctuations: for non-USD quotas, fix exchange rate at start of year based on <Rate Source>, with mid-year review if variance exceeds <Percentage> threshold.

New Hire and Transfer Quotas

New hires receive partial-period quotas based on start date and ramp schedule defined in plan.
Internal transfers: prior territory quota relieved pro rata as of transfer date; receiving territory quota adjusted based on remaining period and TPI.

Sales Credit and Split Rules

Crediting Events and Timing

Primary credit occurs upon CRM order booking with complete and accurate documentation.
For subscription renewals, credit occurs at renewal booking date; multi-year deals credit TCV at booking unless plan specifies ARR-only credit.
Cutoff: deals booked by 23:59 local time on the last business day of the period.

Split Crediting

Team Selling: up to 3 participants may receive shared credit; default split 70% opportunity owner, 20% overlay specialist, 10% solutions consultant, adjustable with approvals.
Territory Boundary Crossovers: if account spans territories, credit aligns to recorded account owner; exceptions use opportunity-level split with written agreement prior to proposal.
Channel Participation: registered partner receives partner credit; internal credit split between channel manager and AE defaults to 50/50 unless pre-approved.

New vs. Expansion vs. Renewal Weighting

New logos: 100% credit to assigned AE; overlay receives 25% credit if involvement documented.
Expansion: 100% credit to account owner; overlay receives 25% credit for product-specific expansion.
Renewal: 100% to Customer Success Manager or Renewal Specialist where role exists; AE receives 25% if negotiated bundled expansion.

Reversals, Returns, and Clawbacks

Cancellations within <Number> days of booking result in full reversal.
Partial downgrades result in proportional reversal applied to the original credited period.
Non-payment beyond <Number> days past due may trigger reversal subject to Finance policy.

Currency and Tax Considerations

Credits are recorded in transaction currency and converted to plan currency using monthly average rate from <Rate Source/Vendor Name>.
Taxes and fees excluded from creditable amounts unless explicitly included in plan.

Example Crediting Matrix

Scenario	Role	Credit %
New Logo, Direct	Account Executive	100%
New Logo with Overlay	Account Executive	75%
New Logo with Overlay	Overlay Specialist	25%
Expansion, Product B	Account Owner	100%
Partner Registered Deal	Channel Manager	50%
Partner Registered Deal	Account Executive	50%

Governance, Risk, and Compliance

Approval Authorities

Territory maps: Sales Ops drafts; Regional VP reviews; CRO approves; Total Rewards attests to compensation impact.
Quotas: Sales Ops proposes; Finance validates; Total Rewards reviews for pay equity and plan alignment; CRO approves.
Exceptions: documented request and approval by at least two of Sales Ops, Total Rewards, and Regional VP; CRO approval for high-impact items.

Exception Request Process

Manager initiates request in <Workflow Tool Name> with supporting CRM links.
Sales Operations completes impact analysis and recommends action.
Total Rewards reviews for policy alignment and downstream comp impact.
Finance validates financial impact.
Approver signs off; decision recorded with effective date and rationale.
Systems updated; participants notified.

Risk Controls

Segregation of duties between Sales Ops (design), Finance (validation), and Total Rewards (policy).
Audit log of territory and quota changes retained for <Number> years.
Quarterly sample-based review of crediting cases and exceptions.
Competition law compliance: no exchange of competitively sensitive customer lists with competitors or partners beyond lawful channels.
Data privacy: account assignments and quota letters include only necessary personal data consistent with <Country> privacy laws.

Roles and Responsibilities

Role	Responsibilities
Total Rewards	Policy ownership; review pay equity; alignment with incentive plan design; approve exceptions within authority; communication templates; audit support
Sales Operations	Territory modeling; quota calculations; data loads to CRM/ICM; pipeline analytics; exception analysis; documentation
Finance	Validation of targets; currency rate governance; financial controls; revenue recognition alignment; forecast integration
Sales Leadership	Business input on coverage; approval of final maps and quotas; performance management; dispute resolution escalations
Legal/Compliance	Review for regulatory compliance; advise on competition law; data privacy requirements
HR Business Partners	Support manager communications; advise on leaves, transfers, and performance cases impacting quotas
IT/Systems	CRM and ICM configuration; access controls; data integrations; UAT support

Implementation Guidelines

Annual Calendar

Design Kickoff: <Date>
Data Freeze for Modeling: <Date>
Draft Territories and Preliminary Quotas: <Date Range>
Stakeholder Reviews: <Date Range>
Final Approvals: <Date>
System Configuration and Testing: <Date Range>
Territory and Quota Letters Issued: <Date>
Effective Date of New Year Territories/Quotas: <Date>

Project Milestones and Deliverables

Charter and RACI finalized
Data collection and validation completed
TPI and capacity models built and reviewed
Draft maps and quotas produced
Exception window managed and closed
Final sign-offs obtained
Systems cutover executed
Post-launch hypercare and issue log managed

Data Requirements Checklist

Account master with IDs, segment, industry, geo, installed base flags.
Opportunity and order history with close dates, amounts, products.
Pipeline snapshot as of data freeze.
Headcount roster with role, start date, ramp status, manager.
Currency rates as of plan start and policy-stated review points.
Target model by product and segment from Finance.

Testing and Validation

UAT scenarios: new account routing, opportunity split, cross-border deals, renewals, reversals.
Reconciliation: sums of individual quotas to regional and corporate targets within tolerance.
Parallel run: 1–2 pay cycles comparing new crediting rules to prior method.
Sign-off: documented approvals from Sales Ops, Finance, Total Rewards, and IT.

Change Management and Training

Manager toolkit: territory maps, quota rationale, FAQs, talking points.
Employee job aids: how to check your territory in CRM, how splits work, who to contact for support.
Office hours: schedule and Q&A log archived in <Knowledge Base Link>.

Documentation and Records

Version-controlled repository at <Repository Location> with territory maps, quota models, approval records, and exception logs.
Retention: maintain records for <Number> years or longer if required by <Country> law.
Access control: least-privilege across systems and documents.

Review and Approval Process

Regular Review Cadence

Annual comprehensive review aligned to fiscal planning.
Quarterly checkpoint to assess coverage gaps and performance vs. targets.
Mid-year adjustment window limited to defined triggers.

Approval Workflow

Sales Operations submits final proposed territories and quotas with supporting analysis.
Finance provides validation memorandum with key assumptions and sensitivities.
Total Rewards completes policy compliance checklist and equity review.
Legal/Compliance confirms regulatory considerations and privacy controls.
CRO approves final package; CEO/CFO approval required if corporate targets change.
Communication and system configuration proceed upon approval.

Change Log

Version	Date	Summary of Changes	Approved By
<v1.0>	<Date>	Initial release	<Approver>
<v1.1>	<Date>	Updated split credit rules for channel deals	<Approver>
<v2.0>	<Date>	Annual redesign with new TPI model and revised quotas	<Approver>

Equity and Legal Considerations

Equal opportunity: territory assignments and quotas must not discriminate on the basis of protected characteristics and must be based on objective business criteria.
Pay equity: Total Rewards will monitor differences in quota attainability and expected earnings by role, level, and location to identify and remediate systemic disparities.
Local laws: adapt quota relief for leaves, working time regulations, draw practices, and SPIFFs to comply with <Country> and regional requirements.
Data privacy: quota letters may include personal data; handle according to <Company Name> privacy policy and applicable law in <Country>.
Competition law: avoid anti-competitive conduct in market allocation; consult Legal for joint coverage with partners in regulated markets.

Dispute Resolution

First-level resolution: employee and manager review CRM evidence and applicable policy within <Number> business days of issue.
Second-level resolution: escalate to Sales Operations with Total Rewards copied; decision within <Number> business days.
Final escalation: CRO decision; only material policy interpretations may be appealed further to <Executive Committee>.
Statute of limitations: disputes must be filed within <Number> days of statement issuance.

Key Metrics and Monitoring

Coverage ratio per segment and region vs. target.
Average quota per rep and target load factor.
Attainment distribution and coefficient of variation by role.
Percentage of accounts with named owner; orphan account backlog.
Exception rate and cycle time for approvals.
Dispute rate and resolution time.
Forecast accuracy vs. quota by region.

Examples and Tools

Sample Quota Allocation Worksheet

Region	Role	Headcount	TPI Share	Regional Target	Avg Quota	Total Quota
<Region A>	Account Executive	25	0.40	<Amount>	<Amount>	<Amount>
<Region B>	Account Executive	15	0.25	<Amount>	<Amount>	<Amount>
<Region C>	Inside Sales	20	0.20	<Amount>	<Amount>	<Amount>
<Region D>	Channel	10	0.15	<Amount>	<Amount>	<Amount>

Example Territory Boundary Rules

Geographic precedence for SMB and Commercial segments using ZIP-to-territory tables.
Named accounts override geography for Enterprise segment.
Public sector accounts mapped by government region as defined in <Country> statutes.
Industry overlays receive influence credit but do not own accounts unless explicitly listed.

Systems and Integration Notes

CRM configuration: territory model enabled; assignment rules run on account creation and change; nightly batch re-evaluation disabled except during planned refresh windows.
ICM configuration: participant-to-territory mapping by effective date; split credit tables aligned with CRM opportunity splits.
Data interfaces: secure file transfer or API-based integration; error handling with automated alerts to <Distribution List>.
Role changes: HRIS event triggers automatic updates; effective-dated mapping prevents retroactive miscrediting.

Frequently Asked Questions (For Administrators)

How do we handle overlapping postal codes across countries that share code formats?
- Maintain country code in the key and standardize formats; do not rely on numeric matching alone.
What happens if an account changes legal entity mid-year?
- Treat as a reassignment; document effective date, split in-flight opportunities per policy, and update both CRM and ICM.
Can managers manually adjust quotas mid-quarter?
- Only via approved exception process; ad hoc changes are not allowed.

Glossary

TPI: Territory Potential Index, a composite score used for allocation.
TAM/SAM: Total/Serviceable Available Market.
ARR/TCV: Annual Recurring Revenue/Total Contract Value.
Overlay: Specialist role supporting product or solution sales across territories.
Orphan Account: Account without an assigned owner.
Split Credit: Distribution of credit across multiple contributors.
Ramp: Planned increase to full productivity for new hires or new roles.
SPIFF: Short-term incentive for specific behaviors or sales.

Communication to Employees and Managers

Audience and Purpose

This section is intended for all employees and managers who receive or manage sales territories and quotas. It explains what is changing, why it is changing, and what actions you should take. It summarizes the policy in plain language and points you to resources and support.

What Is Changing and Why

Beginning <Effective Date>, <Company Name> is updating sales territories and quotas to align with our growth strategy and customer needs. We looked at market potential, historical performance, and our product focus to ensure customers have the right coverage and teams have fair, achievable goals. These changes are designed to reduce account conflicts, improve response times, and help each of you focus on the highest-impact opportunities.

What You Will Receive

A territory letter showing the accounts, industries, and geographies assigned to you, along with your territory ID and effective date.
A quota letter that outlines your quota for the year and, if applicable, how your quota is phased by quarter.
A quick-start guide on how opportunity splits and crediting work, with examples.
Links to your territory map in <CRM Name> and the support channels to use if something looks off.

How Your Quota Was Set

Your quota reflects the overall company target and the opportunity in your territory. We used a consistent method that weighs past performance, market potential, and your role. If you are new to your role, your quota may be ramped during your first months. If you were on an approved leave, your quota may be prorated for that period.

How Sales Credit Will Work

You will receive credit when deals are booked in <CRM Name> with complete information. If more than one person contributes to a deal, we will use pre-agreed splits recorded in CRM. For renewal business, Customer Success or Renewal Specialists may receive primary credit. If a cancellation or downgrade occurs, credits may be reversed as described in the policy.

What to Do If You See an Issue

First, check your territory and accounts in <CRM Name> to confirm ownership. If something appears incorrect, talk with your manager and provide the relevant links. Most questions are resolved quickly at the team level. If needed, your manager can submit an exception request through <Workflow Tool Name>. You will be kept informed throughout the process.

Important Dates

Territory and quota letters will be issued by <Date>.
The new territories and quotas take effect on <Effective Date>.
If you believe there is an error, please raise it within <Number> business days of receiving your letters.

Your Support Network

Your manager is your first point of contact for questions about accounts and quotas.
Sales Operations can help with CRM territory views and splits.
Total Rewards can explain how the incentive plan applies to your quota and credits.
You can find self-service help, FAQs, and office hour schedules on <Intranet Link>.

A Final Note

We know territory and quota changes can be significant. Our goal is to make this transition smooth, fair, and transparent. Thank you for your focus and feedback as we work together to serve customers and achieve our goals. If you have questions or need support, please reach out through the channels listed above.

Document Information:

Document Type: Sales Territory & Quota Management
Category: Variable Compensation
Generated: August 24, 2025
Status: Sample Template
Next Review: <Insert Review Date>

Usage Instructions:

Replace all text in angle brackets < > with your company-specific information
Review all sections for applicability to your organization
Customize content to reflect your company's policies and local regulations
Have legal and HR leadership review before implementation
Update document header with your company's version control information
At bottom of the document you find a short example on how the content could be communicated to end-users, for instance employees.

This sample document is provided for reference only and should be customized to meet your organization's specific needs and local legal requirements.