Residuals are an ISO’s reason for operating, but they can also represent a major headache, especially as a portfolio grows and processor and agent relationships become more complex. As ISOs get bigger and bigger, the time and effort required to manually manage residuals data also skyrockets. Luckily, today’s payments technology solutions, like IRIS CRM, enable ISOs to handle their residuals calculations without having to invest countless hours, comb through mind-numbing reports, or risk costly errors. 


Manual Residuals Calculations

Calculating residuals manually was the norm for a long time, and while it works, manual calculations come with some major drawbacks. Namely, the process is both extremely time-consuming and far too error-prone. 

Compile Processor Reports

The first headache that emerges when residuals drop each month is that every processor provides its own reports in its own unique format. ISOs may have half a dozen or more processing partners, and the numbers from each need to be combined in order to generate an aggregate picture and properly calculate agent payouts. Doing calculations manually means combining each report, transferring the data to a centralized report, and doing all the math – an unacceptably slow process, especially for busy managers.

Apply Agent Splits

With the numbers from each processor merged and gross residuals crunched, agent splits need to be applied to determine how much is owed to each agent and how much the ISO’s net residuals for the month are. Applying agent splits would be a simple task if all agents earned the same percentage on all merchants, but in reality, splits are far more complex than that. Because agents can and do negotiate their splits, each one may be owed a different amount. The same agent may even be owed a different cut on a processor-by-processor or merchant-by-merchant basis. As a result, applying splits is another time-consuming process, and any errors in the calculations could result in over or – worse – underpayments that can damage an ISO’s relationship with some of their most important agents. 

Pay Out Agents

With the final ISO net residuals and agent splits calculated, it’s time to pay out agents. When calculating residuals manually, this requires the data to be sent off to accounting or potentially to a third party, introducing one more opportunity for the process to be slowed down or data to be lost. Overall, the process is so slow that, by the time payments are finally sent out to agents, it isn’t uncommon for a week to two weeks to have passed since residuals numbers initially dropped. 


Automatic Residuals Calculations with IRIS CRM

Today, the better way to calculate residuals is to allow the entire process to happen automatically using a tool like IRIS CRM – the payments industry’s leading customer resource management platform. With IRIS CRM, residuals calculations are streamlined to the point that the process takes minutes instead of hours, and the system’s built-in payments suite also makes paying out agents faster and easier than ever.

Check the Numbers 

IRIS CRM automatically combines the data from each individual processor report and makes it available through an easy-to-use, fully configurable analytics dashboard. The system also automatically applies splits using the agent information saved when each merchant is onboarded, providing ISOs with instantaneous access to their gross and net residuals, as well as the exact amounts owed to each of their agents. The process is instantaneous; as soon as reports hit the CRM each month, all the necessary calculations happen automatically with zero manual intervention required. 

Pay Out Agents

IRIS CRM includes a billing and payments suite that enables ACH payments to be made without ever having to leave the system. After accessing instantaneously and accurately calculated agent splits, ISOs can jump over to the payments area and begin processing payouts immediately. The result is time saved and agents receiving their residuals faster – a great selling point when it comes to recruiting top talent. 


It’s extremely difficult to overstate the value of automatic residuals calculations to ISO managers, both as a time-saving tool and a way to foster better relationships with their independent agents. By both automating and centralizing the entire process, IRIS CRM enables managers to spend less time wrangling reports and crunching numbers and more time steering the ship, focusing on the bigger picture, and driving growth. 

To find out more about how automated residuals calculations can help your ISO reclaim wasted time, minimize headaches, and improve agent loyalty, reach out to a member of the IRIS CRM team or schedule a free guided demonstration today.