Troubleshooting Commissions

Why is the Commission Rate NOT what I expected it to be?
Under certain scenarios, the calculated Effective Discount can result in the application of a Commission Rate different from the anticipated rate.

• The following example will illustrate how the Effective Discount can result in a different Commission Rate:

  List price of a product is 5.25 (First quantity break price in program IM13/IM18).

  Consider three separate pricing scenarios (in each case, the objective is to give the customer an 'Effective Discount' of 10%):

  #1 Order entered with a list price of 5.25 and a 10% discount.
  The net price is rounded to 4.73 ( = 4.725 rounded up to 4.73)

  #2 Order is entered with a fixed (net price) of 4.73.

  #3 Order is entered as 6.31 less 25%. (to give the impression that of a large discount).
  The net price is rounded to 4.73 (= 4.7325 rounded down to 4.73)

  Consider the following Commission Structure:

  Discount %	30.00	20.00	10.00	0.00
  Commission %	1.00	4.00	8.00	12.00

  Since the effect of each of the three pricing approaches is the same, we want to calculate the commission consistently. If we simply examined the discount percentage, we would pay three different commission percentages (#1 = 8% commission on a 10% discount; #2 = 12% commission on a 0% discount; #3 = 4% commission on a 25% discount). Clearly, this is neither correct nor desired.

  In order to calculate the commission consistently, an Effective Discount is on the Order line. In the above case, the Effective Discount is 9.904%. This is less than 10%, resulting in a commission calculation of 12%.

  Clearly, the desired effect in this example is to provide the sales rep with a commission rate of 8% (associated with discounts of 10% and greater). In fact, since the Effective Discount is actually less than 10%, the commission rate is 'technically correct' but not consistent with the desired intention.

  Recommendation: We believe that the desired intent will be met if the discount break points are entered in the commission tables at rates slightly less than the 'rounded' discount rates.

  Consider the following revised commission table:

  Discount %	29.85	19.85	9.85	0.00
  Commission %	1.00	4.00	8.00	12.00

  By making slight changes to the 'technical' rates used in the commission tables, the desired effect can be achieved. Since the general practice in industry is to provide discounts in fairly 'round percentages', a reduction of 0.15% will generally result in meeting the desired effect.

  A similar scenario would apply to gross margin cut-off rates where commissions are calculated based on gross margin.

The commission rate on SA56/SA60 doesn't look right
IN43 calculates commission on a line-by-line basis and updates Commission Amount and Commissionable Sales in the invoice's commission record. Then SA60 calculates the commission rate as: Commission Amount / Commissionable Sales. Sometimes the resulting rate reported by SA60 is fractional or not a rate that is set up in SA02.

• The most common reason for this is if commission is overridden on one or more invoice detail lines, then the resulting rate won't look right to you.
• Split commission is another reason because Total Commissionable Sales is updated for the full sales amount but the Commission Amount is calculated using a split rate.
• Also if an SA02 record specifies different levels of commission rates (ie, 5% if discount => 25% else 7%) then some detail lines on an invoice could be commissionable at 5% and some at 7% with a resulting blended rate for that invoice.

Why is Total Commissionable Sales on SA60 higher than Total Sales on my other sales reports?
This will happen if you split commission between 2 Sales Reps. Commissionable Sales for the invoice is updated for both Sales Reps. Therefore, the Report Total will be higher for that column.

Why is GM on SA60 not equal to the GM on SA34?
If you calculate commission based on Gross Profit, the cost to be used (Average vs. Replacement) is selected in CC00/Order Entry. If Replacement Cost is selected, then the replacement cost is used in the calculation of GM for SA60. All other sales files use Average Cost for Cost of Sales purposes. This results in a difference in the GPs on the SA60 Commission report in comparison to other reports.

Also in CC00/Order Entry, if an overhead percentage has been specified then the cost used (average or replacement) will be increased by the overhead factor which, in turn, decreases gross margin.

Commission did not calculate per the Sales Rep assigned in SU13.
The Sales Rep could have been overridden by the operator in OE30 or IN41 or an override Sales Rep could have been assigned from a Ship To address record (from SU14).

Commission was calculated at the wrong rate so I fixed it in SA02 but the report is still wrong.
Commission is calculated and the commission record is written daily when the invoice is processed through IN43-Invoice Scheduling. The commission report itself (SA56 or SA60) is simply reporting from the commission file; it is not looking at the commission records in SA02.

What commission is assigned on a credit note?
If a credit note is generated from Invoice History using the AutoCredit or Use RMA routine in IN41, then the commission rate from the original invoice detail line will be written into the credit note detail line as a commission override. The idea is to take back the same commission that was calculated on the original invoice. If that is not desired, you can always manually enter a different override commission rate in IN41 on the 'More Detail Data' window on the Lines folder.

Note: The sales rep on the original invoice is NOT assigned from Invoice History to the auto-credit. The sales rep on the auto-credit is assigned per the rep currently assigned to the customer.

On SA56, why doesn't "Total Paid" on the commission record match "Total Paid" in the Customer account?
This will happen if a credit note is 'applied to' an invoice in IN41 and the sales rep is not the same on the invoice and credit note. For example, original invoice is REP A and the applied credit is REP B. The commission record for the original invoice will be written to REP A. When the commission routine tries to update the "Total Paid" amount in the commission record for the invoice (for the value of the applied credit), it uses the sales rep on the credit (REP B), and does not find an existing commission record for that rep so no update happens. SA55 can be used to maintain these commission records to get them to 'pay out' if commission is paid upon full payment of the invoice.

Why did commission on a credit note get clawed back before commission was paid on the original invoice?
This scenario can happen if you pay commission upon PAYMENT of the invoice, do a partial credit and apply the credit to the invoice. When the commission record is written for the credit (to claw back commission), the 'Paid-to-Date' field is updated for the credit and the "applied to" invoice. The next time SA56 is run, the commission record for the credit will be deemed "Payable" while the original invoice may still be partly unpaid.

What do I use SA55 for?
SA55 is used to view commission records (unpaid or archived). If Payable Upon Receipt of Payment flag = ON, then commission will not become eligible for payment until the Net outstanding amount for the invoice is zero. If you wish to pay a commission before the invoice is paid in full, you can use SA55 to enter an adjustment amount to bring the Net outstanding amount to zero. It can also be used to change the calculated commission amount.

On SA55, when does the Paid Date get updated?
The 'Paid Date' field is taken from Post Cash Receipts/Adjustments (AR30). Specifically, the Paid Date is the AR Posting Date from Cash Receipts. When the Payment is received and posted, the Paid Date is updated.

How can I validate the calculated commission amount for an invoice?
The calculated Commission amount, Reference Price and Effective Discount are reported line-by-line in Print Sales Rep Copy (IN51) using Sequence 2 'Salesrep History'. If you enter the Sales Rep+Invoice number in the 'From/To Range' fields you can print a specific Invoice.

Another option is to view the Commission amount line-by-line in Maintain Invoice Commission (SA54).

The calculated Commission amount for each detail line is stored in the Invoice History record (field COMAMT). You can report the value for the Invoice in question using Crystal Reports.

The Commission amount for all detail lines should add up to the total Commission for the Invoice. If you think the total Commission for the Invoice is incorrect, once you know the Commission amount calculated on each of the Invoice detail lines, you can sometimes spot the problem (maybe no Commission calculated at all on some detail lines). Also, once you know the Commission amount for a detail line then you can calculate what the Commission rate was and check that against the SA02 setup. Note: Remember to consider the Effective Discount Calculation.

I lost my hard copy of SA56.
If the hard copy of SA56 is lost and the reported records were archived, there is currently no way to identify which records were archived by that run; it is not possible to reproduce that particular SA56 report from SAUCH.

I printed SA56 on Monday, aborted and reprinted on Tuesday with the same "as of" date and the commission payable total was different.
If payments were made in between the two print jobs, then more commission would have become eligible for payment. Restriction 1 allows the user to enter a qualifying report date that is compared to the invoice date. Invoices dated equal to or prior to the entered date are eligible to be reported and if the invoice is fully paid then the commission is deemed payable. There is no notion as to when the invoice was paid; only that it is paid at the time of printing the report. This problem manifests itself when users backdate the commission report. For example: Print SA56 on August 7 as of July 31. Commission will report as payable for any invoices paid between August 1-7.

I want to switch from paying commission upon ISSUE of invoice to paying commission upon PAYMENT of invoice (or vice versa).
For more information on switching from paying commission upon issue of invoice to paying commission upon payment of invoice, or vice versa, see the Switch Commission Payment Method help topic.