Commission Tables

There are as many different ways of determining employee compensation as there are forms distributors! So Simple Accounting lets you set up a series of tables to hold the formulas you use to determine commissions. Once these tables are created, you assign them to your sales orders so that commissions are automatically calculated. You can also assign a Commission Table as a default for each sales person to automatically assign a commission table to every sales order by sales person.

 

To add or edit these tables, choose Commissions/Tables from the Sales & A/R drop-down menu.

 

Fields

COMMISSION ID
DESCRIPTION
FORMULA	Enter a custom formula for calculating commissions here. Custom formulas offer more flexibility in assigning commissions, however, they require skill in order to set up correctly. A formula may be used by itself, or in combination with other fields in a COMMISSION ID.
ALLOW SPLIT?
EMPLOYEE LOSS %
LOCKED	The record is locked against further changes. Commissions may not be changed on any orders assigned this COMMISSION ID.
BASE ON SALES OR PROFIT?	Is the commission calculated as a percentage of sales dollars or as a percentage of gross profit?
BEHAVIOR ON LOSSES?	How should invoices with a loss be handled? Enter a range of -1 to 100% 0% The salesperson receives no commission, but sustains no loss. -1% The salesperson receives a negative commission using the standard calculation. 1-100% The salesperson is charged this percentage of the loss, regardless of normal commission calculations. Enter 100% to charge back the entire loss in dollars.
INCLUDE FREIGHT PRICE?	Should the FREIGHT PRICE from Sales Order Line Items be included in commissions?   Yes   No Only if FREIGHT PRICE is greater than FREIGHT COST
INCLUDE FREIGHT COST?	Should the FREIGHT COST be included in commissions?   Yes   No
INCLUDE ART PRICE?	Should the ART PRICE on a Sales Order Line Item be included in commissions?   Yes   No Only if art price is greater than ART COST
INCLUDE ART COST?	Should the ART COST field on a Sales Order Line Item be included in commissions?   Yes   No Only if ART PRICE is greater than ART COST

 

EMPLOYEE PERCENTAGES

Simple Accounting allows commissions to be split up to four ways. Do this by entering the appropriate percentages into the four EMPLOYEE PERCENTAGE fields.

 

PERCENTAGE #1	Primary salesperson on the order. Corresponds to the EMPLOYEE ID on a Sales Order
PERCENTAGE #2	The second salesperson on the order. Corresponds to EMPLOYEE ID #2 on a sales order. If you have designated that the EMPLOYEE ID is used for the Customer Service Representative, then PERCENTAGE #2 will be assigned to Employee ID #2 in the Customer Master.
PERCENTAGE #3	Third salesperson on the order. Corresponds to EMPLOYEE ID #3 in the Customer Master or the Vendor ID #1 in the Commission Table (if specified).
PERCENTAGE #4	The fourth salesperson on the order. Corresponds to EMPLOYEE ID #4 in the Customer Master or the Vendor ID #1 in the Commission Table (if specified).

 

By default, the Employee IDs on Sales Orders are automatically assigned from the Customer Master. In other words: the sales person assigned to EMPLOYEE ID #1 in the Customer Master is assigned PERCENTAGE #1 from the Commission Table, the sales person assigned to EMPLOYEE ID #2 in the Customer Master is assigned PERCENTAGE #2 from the Commission Table, and so on… The EMPLOYEE IDs for PERCENTAGE #1 and PERCENTAGE #2 may be overridden on every sales order, but PERCENTAGE #3 and #4 are always determined by the Customer Master.

 

A Note On Royalty Payments: However! PERCENTAGE #3 and PERCENTAGE #4 may each be assigned to a Vendor ID. This overrides any EMPLOYEE ID #3 or EMPLOYEE ID #4 in the Customer Master. Assigning a Vendor ID makes the assigned vendor, in effect, a ‘sales person’ for the order any ‘commission’ (royalty) is linked with that vendor.

 

VENDOR ID #1  Enter a Vendor ID to whom royalties are paid when this Commission ID is used. This Vendor ID is then   assigned commission according to COMMISSION PERCENTAGE #3.

 

VENDOR ID #2  Enter a second Vendor ID to whom royalties are paid when this COMMISSION ID is used. This Vendor ID is then assigned commission according to COMMISSION Percentage #4.

 

At the Period Update, commissions (royalties) due each vendor are summarized and automatically posted as a single A/P Vendor Invoice with one line item for each commissionable invoice. Therefore, it is important to verify the correctness of these commissions before closing the month. If an incorrect commission was assigned to a vendor, you can, of course, edit the A/P Invoice to correct the royalty payment, however this will not reverse the sales commission.

 

If either VENDOR ID is used, only two salesperson commissions may be used on a sales order.

 

GROSS PROFIT PERCENTAGES

Think of these nine fields as similar to income tax brackets: The commission percentage paid depends upon which bracket the profit percentage it falls within. This allows you to set up a graduated system of commissions.

  

Example: You pay commissions based on a sliding scale of profitability for every order. To obtain the results below, enter the commission percentages in column #2 into the field indicated in column #3:

 

  GROSS PROFIT% COMMISSION % LIMIT 

  0-9  0%

  10-12  3% LIMIT 1

  13-15  5% LIMIT 2

  16-20  8% LIMIT 3

  21-25  10% LIMIT 4

  26-30  12% LIMIT 5

  31-35  15% LIMIT 6

  35-39  18% LIMIT 7

  40+  25% LIMIT 8

 

Bear in mind that a zero commission is implied for profit percentages up to LIMIT #1 (which is 10% in the above example). Likewise the commission percentage entered into LIMIT #9 applies for all orders with a profit percentage at or above LIMIT #9 (in this case 40% profit.)