Design Manager Professional gives you the ability to calculate and pay an Employee a Commission. The best way to do this is to follow these five steps:
- Create or Edit the Employee and specify the commission percentage they will receive.
- Set how the Employee will receive Commission: Project Related Commission and/or Point of Sale.
- Analyze Employees' Commission using the Commission Report
- Create a new Vendor representing the Employee
- Pay Commission to the Employee by entering and paying them via a Vendor Invoice
Step 1: Create or Edit the Employee and specify the commission percentage they will receive.
- Go to the Employee/Manager/Salespeople Glossary.
- Add a new Employee, or Edit an existing one.
- Go to the POS/Showrm. Tab.
- Enter the Commission Percentage they will receive.
- Choose OK.
Step 2: Set how the Employee will receive Commission: Project Related Commission and/or Point of Sale.
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Project related commission - If the Employee is receiving commission on a Project they are working on, then you will need to add the Employee to the Project - Salesperson/Manager field.
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Point of Sale - Employees can also receive commission on the Point of Sale Invoices they generate. The Employee Code entered into the Point of Sale login screen will determine the Employee to receive the commission.
Step 3: Analyze Employees' Commission using the Commission Report
Once the Employee/Salesperson/Manager is associated with the project/sale, then the commission will be calculated based upon the Client Invoice generated. You will need to run the Commission Report under A/R reports to see the calculated amounts.
There are many options for this Report. The most important option is what to base your Commission percentage calculation on: Profit or Sales.
- Commission by Profit will subtract the Estimated Cost from the Sale Amount to get your Estimated Profit; then use the percentage entered into the Employee - Commission field as its multiplier.
Example: Est. Profit = 94.50 x 15% = 14.18 commission
- Commission by Sales will use the Sale Amount multiplied by the Commission percentage.
Example: Sale Amount = 409.50 x 15% = 61.43 commission.
Other Commission Report options:
- Only Invoices Paid in Full - when choosing Yes, the Sales Amount will include ONLY those Invoices that the Client has paid in full during the Fiscal month range chosen ? these invoices are not outstanding in accounts receivable. When choosing No, the Sale Amount will include ALL invoices generated during the Fiscal range selected, whether paid by the client or not.
- Include POS Invoices - Choosing Yes, will include Point of Sale invoices generated in the Fiscal month range selected. Choosing No, will NOT show any POS invoices.
- Include Freight, Crating, Install/Labor, Design Fee, Time- Choosing Yes, on any of these options will include the selected component type in the Sale Amount and Estimated Cost columns. Choosing No, will exclude the component types selected from the totals.
Step 4: Create a new Vendor representing the Employee
To pay the Employee Commission:
Create a new Vendor in the Vendor Glossary that represents the Employee. *Note, when the Employee is added as a Vendor, they will need to have a different Code from the one used in the Employee/Manager/Salesperson setup.
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Optionally you can specify the Type as "Employee?" and the Category as "Commission" to help you classify the Vendor/Employee.
Choose OK.
Step 5: Pay Commission to the Employee by entering and paying them via a Vendor Invoice
Go to A/P ? Vendor Invoices.
Add a new Expense/Bill/Misc type.
Select the Pay With and the Vendor (the one you created above).
Enter an Invoice # (a date may be used here).
Enter the Invoice Date and any Transaction Description you would like.
Choose the Add button.
Enter the Account No. for paying out Employee Commissions.
If you do not have one, Add a new Account - this account is typically an Expense account, but we suggest that you consult with your accountant to be sure you do as they require.
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Enter the Amount/Cost - this is the Total Commission amount you are paying this employee at this time; typically found on the Commission Report you generated earlier.
Once completed, post the Vendor Invoice and generate a check to the Employee from the Accounting - Payments & Checks - Pay/Print tab.
