The Commission section is a very powerful feature that allows you to automatically give commissions to employees on any products that they sell. You can set up three different types of commissions at three different levels depending on your business operations. There are three different types of commissions that you can associate with an employee record, product type or specific products. Through the Commission structure screen you can create commonly used commission structures and then later associate them with an employee record, product type or specific products. The commission information specified in the linked commission structure will be used instead of specific commission values. Also, making changes to the commission structure affects all the associated commission calculations saving you lot of typing and time if you need to change the commission structure associated in future. If you would be specifying the same commission percentages or amounts it makes sense to create a commission structure and then link it with the product or employee record. The following examples illustrate the differences of the three commission types supported:
• Gross percentage: if you pay set percentage of commission on price of products and services sold specify commission type as Gross percentage and specify the percentage in the gross percentage section. Optionally specify the Special incentive or Spiff dollar amount that will be added to the total commission.
For example: Product Price = $100, Gross percentage = 10%, Spiff = $5.
Total Commission will be (10% of $100) + $5 = $15
• Margin percentage: if your commission percentage changes after a certain dollar amount of the order total specify Margin percentage as the commission type. In the Margin section specify the percentage of commission before reaching the dollar amount of the order, percentage after reaching the dollar amount and the changeover dollar amount. Optionally specify the Special incentive or Spiff dollar amount that will be added to the total commission.
For example: Product Price = $100, Margin percentage before = 10%, Margin percentage after = 15%, Margin Amount = $50.
Total Commission will be (10% of $50) + (15% of remaining i.e. $100 - $50) = $5 + $7.5 = $12.50
• Amount: if you will pay set amount on the product sold irrespective of its price then select Amount as the Commission type and specify an amount. Optionally specify the Special incentive or Spiff dollar amount that will be added to the total commission.
For example: Product Price = $100, Amount = 10, Spiff = $5.
Total Commission will be $10 + $5 = $15
• To add a Commission Structure:
1. Follow the menu sequence … File | Setup | Commission Structure.
2. In the Commission Structure Screen click the Add Button on the upper right part of the screen. On the bottom section of the screen specify the Structure Name, Commission Type and/or Spiff Amount.
3. If you would like to add another Commission Structure go to step 2, otherwise click Save then Close from the menu toolbar.
Once these commission structures are defined you can associate them with employees in the Employee Section, or with Product types or even individual products in the Company Information Section. Additionally a report on Employee Commissions is provided to view commissions earned by employees in the specified date range (For more information on reports see the Reports Section).
Commission calculations are done in the following order:
1. If employee record has commission information setup then the employee gets paid that commission plus any spiffs setup for that product type and product. For example, Employee has 10% gross percentage, All Frames has a spiff of $7 and the specific frame has a spiff of $10 and the frame price is $200 then the total commission on that frame will be (10% of $200) + 7 + 10 = $37
2. If employee record has no commission information setup then commission information from the individual product is used plus any spiffs setup for that product type. For example, All Frames has a spiff of $7 and the specific frame has a spiff of $10 and the frame price is $200 then the total commission on that frame will be $7 + $10 = $17
3. If neither the Employee nor the individual product has any commission information then the commission information from the product type is used to calculate commission. For example, All Frames has a spiff of $7 and the frame price is $200 then the total commission on that frame will be $7
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