commissions

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Sales Rep Commissions

Sales Rep commissions can be automatically calculated for you in the Professional Version.
There is an advanced commission system in the Enterprise Version.

There is also a Sales Manager Module (separate purchase required) that can keep track of a Sales Rep's performance requirements on a daily basis and provide detailed reporting on areas such as daily calls, appointments, sales, ratios, and targets.

Menu (please select a menu item)

	How to set-up a commission system
	Commission Hierarchy
	Sales Rep as a Creditor
	Reporting
	Profit
	Modifications

How to set-up a commission system

To set up a sales rep within the system follow this procedure:

Database

Place the sales rep details inside the database by:

Go to the STAFF Module and enter the sales rep's details
Go to the PLATFORM database, find the sales rep and edit their details as:
a) What will this contact be? (set to Both a Client and Supplier)

Division

A Sales Rep must be set up as a Division inside the Chart of Accounts

Go to Cash Book
Select Accounts
Select Divisions
Add A Division
    Keep abbreviations short (one or two characters)
    Sale Rep Commissions - Set the % rate to the normal commission that the rep
    should receive on every sale they make
Select Save and the following will occur:
a) You will be asked to select the sales rep so the Division can be attached to their
database details
b) A small Chart of Accounts will be automatically created for you and for the financial
management of the Sales Rep

Security

It is advantageous to also set up the sales rep within the security system. By doing so the daily planner and job tracking system can include the rep as part of the staff task selection.

Commission Hierarchy

A commission is calculated when an invoice or credit note is created and attached to a Division that has been set up to calculate a commission. The Division is the first deciding factor. From then on the client and product play a role in deciding the actual commission that will be paid to the sales rep.

The commission hierarchy is a system designed to provide a flexible commission payment and it works as follows:

Division

The commission rate set at the Division level is the standard commission only and will always be used if there are no exceptions.

It can be overridden under two circumstances:

a) A products commission is set greater or less than the Division rate

b) A clients commission is set as greater or less than the Division

Examples

Division Commission	Client Commission Rate	Product Commission Rate	Rate Used
10%	Blank	Blank	10%
10%	Blank	5%	5%
10%	20%	Blank	20%
10%	No Commission	5%	No Commission
10%	20%	No Commission	No Commission
10%	10%	20%	10%

Sales Rep as a Creditor

When the Invoice is closed an entry for the commission is made automatically against the Sales Rep as a Creditor's Entry.

This is why in setting up the Sales Rep it was important to specify the rep in the database as both a client and a supplier.

The commission that is transferred is automatically set as a Non GST item as it is loaded into the Creditors' Module.

Paying Commission

Paying the commission is as simple as paying a normal creditor.

If GST is to be applied, make a Journal Entry for the GST portion of the GST that you will be paying to the Sales Rep.

Your PAYE will need to be calculated correctly and it is strongly advised that in all circumstances that you should get your accountant to make a detailed description on how to handle commissions. This area of sales rep payments is constantly handled in-correctly and results in many issues with the IRD so please take this advice seriously.

Reporting

Use the standard Creditors reports to review commissions.

There is also a commission report available at:

Platform
Reports
Commissions

Profit

Commission is automatically deducted from the profit of an invoice. The profit margin is also relative. (See FAQ - Margin)

Modifications

Sales Rep Commissions is a common area that clients request modifications on and we have produced many comprehensive systems to monitor and manage sales reps. If you would like any modification to this area please review our modification policies here.

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