Commissions - Setup/Configuration

Before you start: Set up the commissions GL accounts

The default commission expense and commission payable accounts are set up using the Accounting Defaults screen.

1. Open the Accounting Defaults screen (Administration > Accounting > General Setup > Accounting Defaults).
2. Open the Accounts Payable tab.
3. Default Commission (EXPENSE) - This GL account is debited when commissions are marked as paid in Step 5.
4. Commission(LIABILITY) - This is the commissions payable account. This GL account is credited when commissions are marked as complete in Step 5.
5. Click OK when complete.

Step 1: Add a new commission period

Use the New Commission Period screen to create a new commission period. The commission period is used to track employee commissions, and it determines the payable date of the commissions.

For example, if you pay out commissions every month, you can create a commission period titled July Commissions and give it a payable date of 08/01.

1. Open the New Commission Period screen (Administration > Sales > Commissions Tracking > Add Commission Period).
   • You can also click Add on the Commission Period Search screen (Administration > Sales > Commissions Tracking > Search Commission Periods).
2. Name - Enter the name of the commission period - for example, June Commissions, or July Bonuses.
   • Employees can view their commissions by commission period using the My Commissions button on the Employee tab on the main menu.
3. Payable - Date the commission expense will post to the General Ledger once the commissions period is marked as paid.
   • See Posting Overview for information on posting.
4. Click Save and Add Transactions to save the new commission period.
   • The accounting period for the payable date selected is closed - You must create a new Accounting Period before adding a new commission period.
   • Once the commissions period is created, you can add transactions to the period using the Search Commission Periods option (Administration > Sales > Commissions Tracking > Add Commission Period > Select a period and click the Edit Transactions button).

Step 2: Select the transactions

Once the commission period is created, select the transactions to pay commissions on. These transactions are added to the commission period that you just created.

You can perform this step at any point as long as the commission period has not been paid.

1. Open the Commission Period Search screen (Administration > Sales > Commission Tracking > Search Commissions Periods).
2. Double click on a commission period. The Commission Period screen appears.
   • You created the commission period in Step 1: Add a new commission period.
   • All of the transactions added to the commission period display on the Commission Period screen.
   • Transactions appear in blue text if commissions have already been calculated. Commissions are calculated after the transactions are selected in Step 3.
3. Click Search for Transactions. The Commission Request Search screen appears.
4. Use the filters to search for the invoices you want to record commissions on.
   • Just Closed Invoices – Check this box if you only pay commissions on orders that have been invoiced and closed.
   • Invoice Interest – Filter by marketing interest - for example, stoves, spas, pools or chemicals.
   • Employee – You can use this field to record the commissions on one employee at a time.
   • Invoice Total – This field is helpful if you only pay commissions on invoices greater than a specific dollar amount. For example, enter $500 if you only pay commissions on invoices greater than $500.
   • Store/Department – You can use this field to record commissions one store/department at a time.
   • Exclude Invoices Older Than - Use this field to exclude invoiced older than a specific date.
5. Click Refresh. The invoices that match the filter criteria appear in the screen.
   • Only transactions that have not already been added to a commission period are displayed.
6. Select the transactions you want to record commissions on.
7. Click Move To Commission Period.
   • The selected transactions are removed from the screen and added to the commission period.
   • You can add additional transactions to the commission period, or proceed to Step 3.

Step 3: Calculate commissions on the selected transactions

Once you select the transactions, you can either use the system or an MS Excel spreadsheet to calculate commissions.

• Simple calculation - Use the application to calculate commissions by applying a percentage to the item total, invoice total, or profit.
• More complex calculations - Use an MS Excel spreadsheet to perform more complicated commission calculations - for example, a graduated commissions scale.

Step 4: (optional) Adjust the commissions

There are two ways to manually adjust the calculated commissions.

• Update the commission on an existing transaction - Manually adjust the commission calculated on an existing transaction. For example, use this option if you want to manually increase or decrease the commission calculated on a transaction. You can also use this option to change the commission category, commission expense account, or change the transaction to Non-Commissionable.
• Manually create a new commission - Manually create a new commission using the Manual Adjustments tab on the Commission Period screen.

Option A - Update the commission on an existing transaction

Open the Commission Period Search screen (Administration > Sales > Commission Tracking > Search Commission Periods). Double click on the commission period. You created the commission period in Step 1: Add a new commission period. Double click on a transaction. The Commission Request screen appears. Commission - Enter the commissions amount. Non-Commissionable - Check this box if a commission should not be calculated for this transaction. Category - The commission category was added to the transaction in Step 3. You can use commission categories to filter the commissions that appear on the Commission Report. Accounting - Select the commission expense account. The following journal entry is created when commissions are marked as paid in Step 5. The post date is the payable date set up on the commissions period. Debit Credit Commission Expense Commission Amount Commission Payable (Accounting Defaults screen (Administration > Accounting > General Setup > Accounting Defaults > Accounts Payable tab > Commission(LIABILITY) field ) Commission Amount Click OK when complete.

Option B - Manually create a new commission

Use manual adjustments to grant or revoke commissions from an employee. Adjustments can also be used to record extra bonuses or spiffs. Adjustments are posted when the commission period status is marked as paid. You cannot make manual adjustments to a commission period that has been marked as paid. Open the Commission Period Search screen (Administration > Sales > Commission Tracking > Search Commission Periods). Double click on the commission period.•You created the commission period in Step 1: Add a new commission period. Open the Manual Adjustments tab. Click Add. The New Manual Commission screen appears. Select an Employee from the drop down menu. Category - You can use commission categories to group transactions - for example, Regular Commissions, or Bonuses. You can use commission categories to filter the commissions that appear on the Commission Report. Select the Type of manual adjustment. Amount - Enter the amount of the adjustment. Expense Account - Select the commission expense account. The following journal entry is created when commissions are marked as paid in Step 5. The post date is the payable date set up on the commissions period. Debit Credit Commission Expense Commission Amount Commission Payable (Accounting Defaults screen (Administration > Accounting > General Setup > Accounting Defaults > Accounts Payable tab > Commission(LIABILITY) field ) Commission Amount Expense To - Select the store or department to expense the commission. Comment - Enter any additional comments about this manual adjustment. Click OK when complete.

Step 5: Mark commissions as paid

Mark the commissions period as paid once all the commission calculations are complete and each transaction has been paid or marked as non-commissionable.

The commissions post to the General Ledger on the payable date set up on the commissions period.

1. Open the Commissions Period Search screen (Administration > Sales > Commission Tracking > Search Commission Periods).
2. Highlight the commission period you want to mark as paid.
3. Click Mark As Paid.
4. The following journal entry is created when commissions are marked as paid. The post date is the payable date set up on the commissions period.

5. Enter the payroll or commission checks. Make sure the Commission Payable account is debited on the check since the commission expense was already debited when you marked the commissions period as paid.

Security Permissions Required

Related Reports

• Commissions (Administration>Reports>Sales>Commissions>Commissions) - Report on Commissions in multiple different formats.
• Line Item Commission Register (Administration>Reports>Sales>Commissions>Line Item Commission Register) - Analyze Point of Sales Commissions. Looks at each line item sold within specified date range that has a commissionable employee associated with it.