Salesperson Commission System

The Salesperson Commission System is located in Accounts Receivable, Accounts Receivable File Maintenance, Salesperson Maintenance System, Salesperson Commission System. Sales Commission can be calculated and paid in The Business Edge by Salesperson, based on a percentage of Sales or as a percentage of Gross Profit. When paying commission based on a percentage of Gross Profit this is setup by Inventory Classification.

The Commission System operates based on the theory that you pay the commission after the Customer has paid the company. If it is your procedure to pay the salesperson on a regular basis whether or not the company has been paid, you can simply run sales journals and you do not need to use the Salesperson Commission System. You would simply expense the commission when it is paid. When using the Salesperson Commission System, the system will post to the Commission Payable and the Commission Expense Accounts that are setup as Control Accounts when the Customers invoice is updated.

If you are paying your Salespeople a percentage of sales, then you can simply enter the Percentage in Enter and Edit Salespersons by clicking on the Commission Button. When an invoice is updated, the Sales will be multiplied by this percentage entered in the Salesperson record.

If you are paying commission based on Gross Profit then the only time the commission field in the Salesperson record would be if a particular Salesperson is Exempt from Commission, in this case the Commission field should be N/A.

If you are paying Commission as a percentage of gross profit the commission percentages are setup in the Product Classifications. This is designed so that different levels of commission can be paid on a Classification of products based on the Gross Profit of the Sale.

The individual percentages can then be added to each Product Classification in Enter and Edit Product Classifications. You can have an unlimited number of levels of commission for a single Classification.

The Open Commission Report will present a listing by Salesperson of all Commissions due. You must specify the latest Invoice Date and the latest Payment Date to include on the report. You also have a choice whether or not to include only Invoices that are paid. If you choose to show all invoices paid and un-paid you will see the total commission due to the salesperson but they system will only “Pay” the invoices that are paid. This is however a good way to see all of the amounts that are due to a particular Salesperson.

This report can be listed in Customer sequence or Invoice sequence. It can also be presented to Paper or if output to the screen it can be easily output into an Excel spreadsheet.

When you run the Pay Salespersons Commissions all invoices that meet the payment criteria will be marked as paid in the System. Once the Sales Commission is paid, they will no longer appear on the Open Commission Report.

After reviewing this report, you can make any changes that may be needed using The Enter & Edit Sales Commissions selection. This edit routine allows you to make any changes to commissions calculated by the System on an invoice by invoice basis. This entry will update General Ledger accounts, posting to the Commission Expense and Commissions Payable accounts.

Once the Salesperson’s Commissions are correct, this process will pay (remove from the Open Commission Report), all paid invoices for all selected Salespersons. Be sure to check that the Highest Invoice Date and Highest Payment Date are correct.

Note, this process has no effect on the General Ledger, since the General Ledger posting takes place when you update your customers invoices. When you pay the Salespeople either through Accounts Payable or through your normal payroll process the amount paid should be posted to Commissions Payable to reduce this liability account.

If you have paid Salesperson’s Commissions in error, this process will allow you to Reverse or Undo the payment. You must call up each Invoice individually. Once the Invoice is on the screen, you will be asked if you wish to Reverse the Commission Payment. Answer “Yes” to put the Commission back on the Open Commission Report.

This report will show all Commissions paid for a requested Date range and can also be generated for any range of Salespersons. The information includes the original Invoice Number, Invoice Date, Invoice Amount, Paid Amount, Commission Amount, Commission Paid Amount, and Commission Paid Date.

This report is available on Paper or Screen. When presented to the screen it can be easily put into an Excel Spreadsheet