Referral agreement audit and reporting rights: what a partner can reasonably expect

Do referral partners have a right to audit commissions?

Only if the agreement gives one. A right to inspect another party's books, receive periodic statements or challenge a calculation is a contract term. Where the agreement is silent, a partner generally has the information the program chooses to share plus whatever its dispute process allows, and local law may add remedies that only counsel can assess.

For SourceX partners the starting point is the published program terms and your signed agreement. Partner tiers and economics beyond the core program facts live there, and this page does not add to them. What it does is explain which information is reasonable to expect, how deal stages relate to the fee that actually drives your reward, and the one kind of reporting that federal tax rules set.

What drives the number you are checking

Your reward is a share of a collected fee, so verification is about collection rather than activity. Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 cumulative per referred company, and a reward becomes payable only after the buyer pays and SourceX receives its fee.

That gives you five facts to confirm for any payout, the five-point payout check:

1. Attribution. Your introduction was the first valid one, and the company's resulting application was verified within the attribution window.
2. Closing. The company signed a licensing deal. A lead, a meeting or a signed agreement on its own does not trigger payment.
3. Collection. The buyer paid and SourceX received its fee.
4. Eligibility. Which part of that fee counts as eligible platform fees under the terms.
5. Cap position. How much of the cumulative cap for that company has already been paid out.

A statement that lets you check those five points is doing its job, whatever format it takes.

Stage tracking vs collected-fee verification

Stage tracking tells you where a company sits in the process; collected-fee verification tells you whether there is money to share. Partners often blur the two and expect a reward when a deal passes a milestone.

The sibling explainer on what a partner portal shows covers where status of this kind typically appears. Treat any stage label as information, never as a payment promise.

What federal tax reporting adds

The one report set by law rather than by contract is tax reporting. The IRS instructions for Forms 1099-MISC and 1099-NEC explain that a business reports certain payments for services made to people who are not its employees on Form 1099-NEC once the year's total reaches the threshold for that year, and that the form is generally due January 31 with no automatic 30-day extension. The threshold changed recently, so read the instructions for the year of payment rather than relying on a remembered figure.

To make that reporting possible, a payer asks a US person for a Form W-9 with a correct taxpayer identification number. A partner firm organized outside the US documents its foreign status on Form W-8BEN-E, which goes to the payer rather than to the IRS.

An information return is an annual total, not a deal-by-deal statement. Reconcile it against your own record of payments and raise any difference before you file.

How it applies in common partner situations

What to ask for before you sign

Reporting rights are easiest to settle before the first introduction. These are reasonable requests for any referral arrangement, and the explainer on what a referral fee agreement covers sets out the wider structure.

• A statement with each payment showing the company, the deal, the eligible fee basis and the reward calculated.
• A way to see the status of each company you introduced, even if the detail is limited.
• A named contact or process for questioning a calculation, with a stated response time.
• Clarity on what happens to pending rewards if either side ends the agreement.
• Confirmation of which tax forms the payer needs from you, and when.
• Any confidentiality duties you take on if you receive deal information.

Whether a full right to inspect books makes sense depends on the sums involved and the program. If you need one, ask in writing before you sign rather than assuming it exists.

Confidentiality: what you should not expect to see

Licensing deals carry confidential information belonging to the company and the buyer. It is reasonable to expect enough to verify a reward; it is not reasonable to expect the license agreement itself, the buyer's identity or any of the company's records. Partners never export, upload or describe confidential records, and the principle runs both ways: you do not need the company's data or contract to check your payout.

If the owner volunteers details, keep them confidential and do not forward them. Your own dated record of the introduction, plus each statement you receive, is the evidence that matters in any query.

Questions to ask your counsel or adviser

• Does my agreement give me any right to statements, records or an independent review, and on what notice?
• How long after a payment can I raise a query, and which law governs the agreement?
• If I act through a company, which entity should sign, and which tax form applies to it?
• Do my professional rules require me to disclose the reward to the client, and does that affect what deal information I may receive?
• How long should I keep my own records to support a later query or a tax filing?

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

Next step

Read the program terms for the reporting and payment clauses, then register as a partner and keep a dated log of each introduction from day one. Each stage a referred company passes through on the way to a closed deal is set out in how it works.