The cost of the sale,
spread over the benefit.
Aleq capitalizes the commission that won the deal and amortizes it across the period it benefits — not expensed in a lump the month you paid it.
You set how long the benefit runs. Aleq runs the rest.
Whether renewal commissions are commensurate — and so how long a commission's benefit really lasts — is your team's call. Once the period is set, three things happen automatically.
The 48-month period is your plan's setting — your team decides whether renewals are commensurate and how long the benefit runs; Aleq doesn't derive that on its own yet. Once it's set, capitalization and monthly amortization run without a spreadsheet.
Every payout, on its own schedule.
Each commission carries its own capitalized balance and amortization, tied back to the rep and the contract that earned it. Aleq keeps the whole deferred-cost asset reconciled — what was paid, what's amortized, what remains — and writes off the balance the moment a contract churns.
| Payee · contract | Capitalized | / mo | Remaining |
|---|---|---|---|
| Allison W.C-7015 · 48 mo | $22,680 | $473 | $18,896 |
| Brent K.C-6904 · 48 mo | $31,400 | $654 | $21,582 |
| Marcus D.C-7102 · 48 mo | $15,000 | $313 | $13,750 |
| Priya N.C-6711 · 48 mo | $27,900 | $581 | $16,849 |
| Deferred cost asset | $484,400 | $31,400 | $1,740,000 |
However you sell, the cost follows the deal.
New logos, renewals, channel, self-serve — what you capitalize and how long it benefits depends on the motion. Aleq runs the right treatment for each.
The cost of winning the deal — capitalized.
A commission paid to land a new contract is an incremental cost of obtaining it, so it's capitalized and amortized over the period it benefits — often longer than the initial term, because the customer relationship outlasts it.
- Incremental cost paid only because the deal closed → capitalized.
- Period of benefit amortized over expected customer life.
- Loaded payroll taxes on the commission ride along.
Renewal pay turns on the commensurate test.
If a renewal commission is commensurate with the new-business commission, the relationship is already captured and the renewal cost is expensed. If it isn't, the renewal is a fresh asset. That test is your team's call today — Aleq capitalizes or expenses against whichever way you've decided.
- Commensurate renewal rate ≈ new rate → expense as incurred.
- Not commensurate lower renewal rate → capitalize separately.
- The ratio test your team's assessment against ASC 340-40-25 — not yet automatic.
Partner referral fees follow the same rule.
A referral fee or channel payout paid to win a deal is just as incremental as an internal commission. Aleq capitalizes it against the same contract and amortizes it over the same period of benefit — one schedule, internal and external alike.
- Referral fees incremental to the deal → capitalized.
- Same period amortized over the customer's expected life.
- One schedule internal and partner costs, side by side.
Short-lived deals are expensed as incurred.
Where the amortization period would be a year or less, the ASC 340-40 practical expedient lets you expense the cost as incurred. Aleq applies it by policy — no asset to set up for a deal that won't outlive the year.
- One-year expedient applied where benefit ≤ 12 months.
- By policy elected and applied consistently.
- No micro-assets small short-life costs expensed cleanly.
What controllers and auditors ask.
Yes. ASC 340-40, the contract-cost guidance that accompanies ASC 606, requires capitalizing the incremental costs of obtaining a contract — chiefly sales commissions — as an asset, then amortizing them over the period the contract benefits the company. Expensing commissions as paid is only permitted under the practical expedient, when the amortization period would be one year or less. For a typical SaaS company with multi-year customer relationships, that means a deferred commission asset amortized over several years. Aleq automates this: it matches each payout to its contract, capitalizes it, amortizes it over the period of benefit you set, and writes off the balance if the customer churns.
Put your commissions on Aleq.
Connect payroll and your CRM. Set the period of benefit per plan and watch Aleq capitalize the cost of every deal, apply the one-year expedient where you've elected it, and write off the balance the moment a contract churns — the deferred-cost roll-forward tied out.