Recruiting placement fees: invoices, guarantees, refunds, and collections

Record the client agreement, candidate or placement reference, fee basis, start date, billing event, payment terms, and any replacement or refund guarantee. Protect candidate information and share only the detail finance needs.

Retained search, contingent placement, and staffing arrangements can create different records and revenue questions. Have the accountant assess the company's policy using the actual contract.

Confirm the qualifying event occurred and the calculation uses the agreed compensation or other base. Preserve client approval and any negotiated rate change.

For illustration, a twenty-percent fee on an agreed $100,000 qualifying salary produces $20,000 in the simplified arrangement. The contract may define the compensation base differently, so the approved calculation should remain with the invoice.

Keep guarantee dates, candidate departures, replacement obligations, credits, and refunds in a reviewed register. Tell finance when operations agrees a concession or the contract triggers a change.

Do not assume every fee becomes final when the invoice is sent. The accounting reviewer should assess terms and any material refund or service obligation under the applicable framework.

Match client receipts to invoices and identify unapplied cash, disputes, and payment plans. If recruiter compensation depends on invoicing or collection, apply the approved compensation rule consistently.

A customer refund can affect the fee record and employee commission differently. Coordinate the commercial, payroll, and accounting decisions rather than netting everything in one adjustment.

At close, compare placements, invoices, collections, guarantee events, and approved credits. Give exceptions an owner and next action.

Retain the contract, calculation, acceptance evidence, payment history, and accounting review. Use recurring disputes to improve billing and contract clarity. The resulting record should explain both the recognized fee and the cash expected from each material placement.