Commissions

General

A commission is a fee paid to an agent (an external company) or an employee (internal salesperson) for transacting a piece of business or performing a service. It is fairly common to pay commissions for sales.

Basic Data

To make this possible, you must connect the customer to one or more commission receivers. You start by setting up basic information about commission receivers and commission receiver groups. Depending on the setup, you can calculate commissions to individual commission receivers as well as to commission receiver groups. In the information about the commission receiver, you state, among other things, information about the salesperson if an internal salesperson is entitled to receive commissions. You can also enter the currency of the commission receiver, which is the currency in which the commission amount is being paid. If you enter a commission agreement with a different currency this will only change the calculation currency.

Commission Agreement

The next step is to create a commission agreement to exactly control how and when commissions are to be calculated. You can enter more than one agreement line to each commission agreement. You can set a wide range of terms, consisting of any combination of the following:

Commission on Customer Order

When you enter a customer order line matching the above set criteria, the system will generate one or more order commission line(s). You can later manually create additional order commission lines and change the ones created by the system.

You can change any commission line considerably, such as commission percentage or amount and other features. If required, you can also add or remove commission lines.

For each order line commission there is a defined line source. The line sources are:

Apart from others an order line commission can also be fixed. Special conditions are applied when fixed commissions are used. Fixed order commission lines will neither be calculated nor considered in the recalculation process.

Commission calculation

However, the system will create only the commission lines. To copy the commission percentage or commission amount, you must actively initiate the calculation of the commission line.

You can initiate the calculation of order commissions as soon as they have been created. You can choose between:

As stated above, there are a few differences in the handling of manually entered commission lines and system generated commission lines in the recalculation process.

If you make manual changes in a system generated commission line, that line will be handled in the following way:

When changes are made to price or quantity on the customer order line or the commission percentage is updated on the commission agreement such changes will be considered for commission lines in Calculated status if the Include Calculated Lines check box is selected in the Calculate Commissions dialog.

Before you finalize the commissions, you must run the commission calculation for all required sites, commission receiver groups, and/or commission receivers. Once the commission calculation is finalized, you can no longer change or recalculate any affected commissions. Normally, you finalize them for a fixed period of time, e.g., you finalize January in February, if the chosen period is "'month." On finalizing, the system will consider the calculation period of the commission receiver as entered in the basic setup. The system will alert you if you finalize the calculations before the end of the calculation period of the commission receiver.

If you have finalized the commission calculation without a previous commission calculation the "neglected" commissions will be transferred to the next commission period. They will not be lost. The same applies if, for some reason, the basis for calculation is changed after a commission has been finalized. An example would be if you create a credit invoice for an order with invoice based commissions that have been finalized. In this case a correction of the commission will be transferred to the next commission period. In these cases the system will generate a correction line to the next commission period.

When an order line is canceled, the connected commissions will be removed automatically. All open commission lines will be canceled. Closed commission lines will be reversed by a correction line, that will be connected to the next open commission period. One correction line per receiver will be created.

Correction lines

Commission lines with line source “Correction” are system-generated lines created to correct earlier given commissions. Correction lines are created when recalculating commissions and the commission period for the original commission line amount is closed and finalized (Finally Calculated).

The system creates the Correction lines by calculating how much Commission the receiver is entitled to get by the time for the calculation. After that, a check is performed to find out how much commission the receiver already has gotten. If there is a difference, a correction line will be created for the amount that differs.

Correction lines have the following characteristics:

Commission Reports

The system is not automatically producing any credit note or similar document. However, you can use any of the commission reports to initiate the payment of commissions and to serve as verification. You can design the reports to show commissions to a specific commission receiver or a commission receiver group during any period of time, and you can produce it in a more detailed or less detailed version.