About Sales Commissions

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Order Entry uses transaction data to calculate commissions earned by salespersons.

If you track sales commissions, you can select various options in Accounts Receivable, Order Entry, and Inventory Control to specify how sales commissions are calculated and assigned. For more information, see Setting Up Salesperson Commissions.

Tracking Commissions

On the O/E Options screen, you can select or clear the Track Commissions option at any time.

If you have been tracking commissions and you clear the option, Order Entry immediately stops calculating sales commissions, although it retains those already calculated until you print the A/R Salesperson Commissions Report and use the O/E Clear History screen to clear sales data.

Options for Calculating Commissions

You can calculate commissions on either the sales amount or the margin. You control how commissions are calculated by selecting options in Order Entry and Inventory Control that specify the following settings:

Whether to calculate commissions by sales or margin. You select this option on the Processing tab on the O/E Options screen. If you select Sales, commissions are calculated on the invoiced sales amount. If you select Margin, commissions are calculated on the margin amount.
Whether to use item category rates or salesperson rates. You specify rates for item categories on the I/C Categories screen in Inventory Control, and you specify rates for salespersons in Accounts Receivable. If the item rate is 0 (zero), Order Entry uses the salesperson rate. If you specified a rate for the item, that rate overrides the salesperson rate.

How Order Entry Calculates Commissions

Order Entry calculates commission amounts on transactions during Day End Processing, and adds them to the commissions already accumulated for salespeople for the current period.

To calculate the commission, Order Entry checks:

That the salesperson earns commissions.
That the item is commissionable.
Whether a commission rate was specified for the item category on the I/C Categories screen. (If it was, that rate overrides the salesperson rate.)
Whether commissions are paid on the sales amount or the margin.

Depending on the option you select on the O/E Options screen, Order Entry calculates commissions either on invoiced sales amounts or on margin amounts. If commissions are calculated on margin, cost figures in Inventory Control are used to determine the commission earned.

Reporting Sales Commissions

Order Entry accumulates commission information until you use the O/E Clear History screen to clear sales history.

If you use Order Entry to track commissions, you must follow these steps at the end of each commission period:

Run Day End Processing in Inventory Control to update commission information.
Print the O/E Salesperson Commissions Report. (You must print this report before you can clear data.)
Use the O/E Clear History screen to clear sales data for the commission period.

The length of time between clearing reports is called a commission period.

The O/E Salesperson Commissions Report lists the commission amounts due salespersons for the current commission period. For more information about this report, see O/E Salesperson Commissions Report Screen .