Assigning Commissions and Rebates

Sales Maintenance in DEACOM allows users to manage Commissions and Rebates, link commissionable personnel or Bill-to Companies to a Commission/Rebate, and set dates for when a Commission/Rebate can be applied. Multiple Commissions/Rebates, can be added to an individual or grouping of companies or commissionable personnel. For example, a Sales Rep can receive 3% Commission on all items, and also receive an additional 2% Commission on all products sold to a specific customer. This functionality is driven by the hierarchy of Commissions which, like all other hierarchies, works from most specific to most generic.

Configuration

Prior to adding a Commission/Rebate, several pieces of master data need to be setup:

  • Bill-to and Ship-to Companies - Needed to define which companies Rebates can be applied to; maintained in Sales > Customers.
  • Sales Groups and Sales Reps - Groups are required in order to create Sales Reps and Reps are needed in order to link Commissions to Commission-eligible personnel.
  • Brokers - Brokers are needed in order to link Commissions to Commission-eligible personnel.
  • Items, Categories, and Sub-Categories - all needed to define which products are Commission-eligible.

Process

Adding Commission and Rebate Groups

While groups are an optional part of adding new Commission and Rebates, they allow users to group similar Commissions and Rebate rules into distinct groups for reporting and filtering purposes. Once a group has been created, it is assigned to the appropriate Commission or Rebate rule via the "Commission Group" field on the Edit Commission form. To add a new group:

  1. Navigate to Sales > Maintenance > Commission and Rebate Groups.
  2. Click "New", enter a Name for the group, and check the flags as desired.
  3. Click "Save" and "Exit" to add the group and close the form. The group can now be assigned to any new or existing Commissions and Rebates.

Adding Commissions and Rebates

  1. Navigate to Sales > Maintenance > Commissions and Rebates, then click "New".
  2. In the Edit Commission and Rebates form, select a "Company Type" from the pick list. Users have the ability to choose all Bill-to Companies or a specific Bill-to or Ship-to Company.
    1. Note: depending on the "Company Type" selection, the next field will be titled "Bill-to Company" or "Ship-to Company" and become editable.
  3. Select a "For" type from the pick list. Users have the option to select from multiple types of commissionable personnel (ex. All Salesmen, Broker, Facility, etc.), when setting up a Commission, or from companies that are rebate eligible (All Bill-to Companies, or Bill-to Company), when setting up a Rebate.
  4. Select an "On" type from the pick list. Users have the option to select from multiple types of product options, ranging from All Items, to a Category of items, down to a Specific Item.
    1. Note: if an option other than "All Items" is selected, the field beneath "On" will also become an editable field. Users will have the ability to specify which Category or Item to which the Commission/Rebate will apply.
  5. Select a date type in the "Commission Date" field. The date in this field defines the point in the sales process at which Commissions are calculated and paid.
  6. Enter a "Start Date" and "End Date" for the Commission/Rebate. This will apply parameters for when a Commission/Rebate is available for use.
  7. Once complete, Click "Save", and return to the Commissions and Rebates form, where the newly created Commission/Rebate will be listed.

Including Freight Costs

The "Include Freight Cost" flag, on the Edit Commission and Rebate form, is set to true by default. There are two different scenarios on how the system will handle the box being unchecked.

  1. When unchecked and calculating Commissions based on percent of total dollars, percent of standard profit, or percent of gross profit, DEACOM will subtract the freight cost times the line quantity from the commissionable amount. This is useful in situations where customers do not wish to have freight costs included in the total revenue calculation on which commissions are based.
  2. When unchecked, and the "Type" field is set to "Dollars per unit", the DEACOM system will not include Sales Order line freight costs when calculating Commissions and Rebates. This is useful when "Delivered Pricing" is needed on Sales Orders, such as when a single price should be shown for an item sold to the customer (e.g. $5/lb.) but also want to be able to break out the additional freight (e.g. $1/lb. for freight) from the unit price (e.g. $4/lb.) and not have to pay commissions on freight charges.

Examples

Example 1:

  • A Sales Rep gets 3% on all sales.
  • The same Sales Rep gets 2.5% on sales of product Y to customer X.
  • Net Effect: The Sales Rep gets 3% on all sales to customer X, but only 2.5% when product Y is sold to customer X.

Example 2:

  • A Sales Rep gets 3% on all sales.
  • The same Sales Rep gets 0% on sales to customer X.
  • The same Sales Rep gets 2.5% on sales of product Y to customer X.
  • Net Effect: The Sales Rep gets 3% on all sales, but 0% for sales to customer X, unless product Y is sold to customer X, in which case the Sales Rep would get 2.5%.

Modifying Commissions and Rebates

All information under a Commission and Rebates record can be modified in the Edit Commissions and Rebates form, by navigating to Sales > Maintenance > Commissions and Rebates, selecting the desired record, and clicking "Modify".

Commissions have their own category of User Defined Fields. These UDFs are also available for Commission reporting purposes.

FAQ & Diagnostic Tips

After setting up a Commission, it is not being applied and is being superseded by another Commission. What is the problem?

Commissions are controlled via a Hierarchy of Commissions, which controls how and when a Commission should be applied. This means that as Commissions become more specific (specific customers or items), they will take precedence over more generic Commissions (All Bill-to Companies or All Salesmen).

Tip: Sales order lines are used to determine if a part that is sold will receive a commission, based on the Commissionable flag on the sales order line(or_commable). The Commissionable field on the Item Master (pr_commable) provides the default value when a sales order line for this part is entered. When generating commissions, the system refers to this field instead of the item master.