Percentage-Based Referral Earnings

This example shows a referral program where the referrer earns 1 percent of every invoice paid by the referred customer. Each billing cycle generates a new earning calculated from the invoice amount.

It demonstrates how recurring percentage commissions accumulate over time and how the ledger tracks each individual earning for finance reconciliation.

The scenario

The referrer

Alex Park, a software consultant who recommends a CRM tool to her clients. She receives a unique referral code to share.

The referred customer

Jordan Lee, a sales director who signs up on January 8th using Alex's referral code. Attribution is recorded immediately.

The subscription plan

Professional tier at $100 per month. Jordan subscribes on January 8th and billing occurs monthly on the 8th of each month.

The commission rate

Alex earns 1 percent of each paid invoice. On a $100 invoice, this equals $1.00. The percentage applies to whatever amount Jordan pays.

The commission rule

Referrer earns 1 percent of each paid invoice total

Every time Jordan pays an invoice, TinyRefs calculates 1 percent of that amount and records it as a new earning. The calculation is straightforward: invoice total multiplied by 0.01 equals commission earned.

$100 × 1% = $1.00

$150 × 1% = $1.50

Four months of invoices and earnings

Over four billing cycles, Jordan pays four invoices. Each payment triggers a commission calculation. In month three, Jordan adds a user seat, increasing the invoice amount and the corresponding commission.

1 January 8: First invoice $100.00 paid Commission: $1.00 2 February 8: Second invoice $100.00 paid Commission: $1.00 3 March 8: Third invoice with add-on $150.00 paid (added user seat) Commission: $1.50 4 April 8: Fourth invoice $100.00 paid Commission: $1.00 5 Total earned: $4.50

Each invoice payment generates a commission. The March invoice is larger due to an added user seat, resulting in a higher $1.50 commission.

Ledger entries created

Every invoice paid creates a separate ledger entry. One invoice equals one entry. This makes the ledger fully auditable and shows exactly when and why each earning was recorded.

Date Referred customer Event Invoice total Commission rate Amount earned
Jan 8 Jordan Lee invoice.paid $100.00 1% $1.00
Feb 8 Jordan Lee invoice.paid $100.00 1% $1.00
Mar 8 Jordan Lee invoice.paid $150.00 1% $1.50
Apr 8 Jordan Lee invoice.paid $100.00 1% $1.00
Total across four invoices $4.50

Reporting outcome

Report for the period covering the four ledger entries. Totals match the ledger exactly.

Date range

Jan 1 to Apr 30

Total invoices paid

4

Total earned

$4.50

$1.00 + $1.00 + $1.50 + $1.00 = $4.50. Finance reconciles against the four ledger rows.

What this proves

  • Recurring earnings compute deterministically from each paid invoice.
  • Values can change per invoice when the invoice total changes.
  • The ledger stays auditable: one row per invoice, one row per commission.

Referral reporting aggregates ledger entries by date range. Subscription-based referral programs and event-based referral tracking cover how events drive attribution and ledger entries.

This example shows how the model works in practice. Join the TinyRefs waitlist if you want to build programs like this.