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4.1. Discount

In our first scenario, we will follow sales rep Sam Masters as he sells 10 yellow tough trucks (YTRUCK1) to his retail Customer Prodiem Toys. After a 5% discount, the extended price for 10 items is $104.41. According to a commission schedule based on customer type "NORMAL", the sales rep should receive 8% commission on $104.41―leaving a payable commission of $8.35.

Note

When using schedules, the discount percentage used to determine the commission rate is based on the initial price after any existing pricing schedules are applied.

To recreate the above scenario, let's make sure we have the necessary sales rep and commission schedule assignment in place. If it does not already exist, add the following commission schedule (you can access the commission schedule by following the path Sales > Setup > Master Information > Commission Schedules):

Commission Schedule

Next, assign the commission schedule to customers with type "NORMAL - RETAIL," as shown in the following screen:

Commission Schedule Assignment

As we have seen previously, Sam Masters has been set up as a sales representative receiving commissions according to assigned commission schedules:

Sales Representative setup

Note

It's important to remember that the fixed percentage and commission schedules options are mutually exclusive.

Verify that Sam Masters is a sales representative for customer "XRETAIL"―and add him as the primary sales rep, if he is not already:

Customer sales rep setup

We are now ready to enter a sales order and sell the yellow toys at a discount to the customer:

Sales Order for customer XRETAIL

Navigate to the Line Items screen (select the Line Items tab) and add item "YTRUCK1" and a quantity of 10 at 5% discount here. Note the entry on the Commissions tab:

Commissions on line item YTRUCK1

After saving the item, notice the Commissions tab on the sales order header and click the SAVE button to save the order.

Tip

You can expand the line item to see the individual sales rep's commission.

Sales Order header commissions information

Remember that commissions only become payable after the sales order has been invoiced and the payment received. For this first example, we will issue the items to shipping from the list of open sales orders. We will then create the invoice when shipping the items. To begin, follow these steps:

  1. Follow the path Sales > Sales Order > List open

  2. Right click on the sales order created above.

  3. Choose the Issue to Shipping option.

  4. Select the line item for shipping, making sure that Select for Billing and Create and Print Invoice are checked.

  5. Click the SHIP button, as shown on the following screen:

Ship the order

When printing the invoice, make sure the Post Invoices after Printing option is checked, as follows:

Print the invoice

To receive payment, follow the path Accounts Receivable > Cash Receipts > New and distribute and save the cash receipt, as follows:

Receive the payment

Once you have saved the cash receipt, be sure to post it. Everything is now in place for payment of our sales rep.

As we mentioned earlier, the sales rep commissions report allows us to mark the relevant commissions as paid. Use the following path to get there: Sales > Reports > Sales Rep Commission.

Sales Rep Commissions report

Right-click on the commissions line that you wish to pay and select Pay Commissions for Selected Invoices. Notice that the Paid column has now turned to "Yes." Our first enhanced commissions have been paid!

Sales Rep Commissions paid