How do the Sales Reps and Commission Management Work?

Setting up Sales Representatives and optionally awarding Commission.

Written By Grainne Reidy (Super Administrator)

Updated at February 14th, 2023

Introduction

You can set up Sales Representatives within the system, track their Sales performance and use it to calculate their Sales commission. Sales Commissions and Rates are related to Product sales, so are used in conjunction with Product Pricing, if not the full Inventory/Stock Management suite. 
 

Product/Service Groups are what determine the Commission Rates and Amounts. Ensure that your Products are properly assigned to their relevant Product Groups using the Codes Maintenance facilities. Re-allocating Products/Product Groups and/or changing Commission Rates only affect future transactions and calculations. Any changes will have no retrospective impact.


Like Sales Analysis Reporting, only Sales Invoices and Sales Credit Notes contribute to the calculations, so take care with Discounts and Rebates. Where relevant, use Credit Notes to ensure proper recording and reporting of Net Sales rather than Journal Credits. 

See:

 How do I use Code Maintenance to Control the Behaviour of the System?‍ 

How do I Maintain Product and Service Type Items?‍ 

Sales Item Invoices‍ 

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Setting up Sales Reps and Commission Rates

  1. In the blue banner, go to SalesSales Representatives.


     
  2. In the header, set up the Sales Reps’ demographic details. Once entered, the bottom half of the screen displays all the Product/Item Groups you set up, including one for Items that remain unassigned to any Group. If you add further Items and Item Groups, they will appear here. Keep the commission rates for each Sales Rep up-to-date.

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Nominating Sales Reps

Nominating Sales Reps in the Customer Master Record

To allocate Sales Reps to individual Customers, go to Sales > Customers and open the relevant Customer Master Record. In the Account Settings tab, select from the Sales Rep. dropdown.
 

Nominating Sales Reps at Invoice Entry

You can override the default Sales Rep and select another one at the time of Invoicing in the Sales Rep dropdown.
 

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Fixed Percentage Based Commissions

Fixed Percentage Based Commission is a fixed percentage of the total net sale value (after Discounts and before Tax) of a particular Invoice Line Item (Product). 


For example, if the Invoice Line value is £100 you can specify that the Sales Rep should earn and accumulate a nominated percentage of that value. The commission % rate is dependent on the Product Group of the Line Item (Product). 

Setting up fixed percentage based commissions

  1. Go to Sales > Sales Representatives in the blue banner.
  2. Select Fixed and enter a percentage in the Fixed Rate field.
  3. Click Save.
     

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Invoice Example

This Invoice for Bath Salts belong to Product Group Cleansing. They are being sold at a 10% Discount to the Customer who is on Standard Pricing at a Unit Price of £4.56 before a 10 Percent Discount on the sales value:
 

The Sales Rep Commission Report

Go to Reports > Report’s Manager > Sales Reports > Sales Commissions Report.
 

The Report for the period in question then shows the following:
 

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Margin Based Percentage Commissions

Commission is calculated as a percentage of the gross profit margin earned on the sale of an Invoice Line Item. The commission is the discounted sales value less the calculated costs of the Item. 


If you choose this option, you can set up different commission rates to apply to multiple margin bands. This allows you to scale the commissions earned relative to the amount of margin achieved. For example, you could have a 3% commission on a sale which has a 25% gross margin or a 5% commission on sales that achieve a 40% margin.

Setting up Margin Based Commission

  1. Go to Sales > Sales Representatives in the blue banner.
  2. Select Margin and click Add/Edit Bands to create a new blank record to record a new band. 

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  3. Click Add New Band and then Save for each band you want to add. This example has three Margin Based Commission ranges for up to 30% Commission at 5%, up to 40% Commission at 8%, and up to 50% at 10% and beyond. 

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Invoice Example

This Invoice was subject to Margin Based Sales Commission:

Sales Rep Commission Report

Go to Reports > Report’s Manager > Sales Reports > Sales Commissions Report.
 

You can mix both the Fixed Commission and Margin Based Commission for different Product Groups even within a single Sale Rep's commission structure. 


The Report for the period in question includes one sale based on the Fixed Commission basis and another based on the Margin Commission basis:
 

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