Sales Representatives

AnyOrder will calculate commissions for sales representatives. Currently, AnyOrder has three built-in calculation methods. More are planned for future releases.

If you have sales representatives, the first thing that you need to do is set-up codes for each individual. That's done by selecting MAIN TASKS >> VIEW/MODIFY CODE LISTS >> SALES REPRESENTATIVE LIST.

Type in a code for the representative and the individual's name in the first two columns.

Place a checkmark in the third column if you want commissions figured on sales which have already been paid. (No checkmark means that commissions are figured on an accrual basis.)

In the fourth column, enter the Commission Calculation Method. To save space, Commission Calculation Method is abbreviated "CC" on the spreadsheet. (See below for more information.)

In the last column, enter commission percentage. The percentage is entered as a fraction, i.e. .05000 = 5%.

Currently there are three calculation methods. They are identified by a number. To indicate which calculation method to apply, enter the appropriate number in the "CC" column:

3 = Commission based on gross profit. Gross profit is the difference between revenues and the cost of the goods sold. (Some additional costs may also be removed; see explanation below.)

The third commission calculation method (CC) uses gross profit to calculate a sales representative's commission.

The terms net and gross profit are often used interchangeably. Some people may use the term "net profit" to refer to this type of commission calculation. Technically, however, "net profit" refers to profit after deducting all operating expenses, notably fixed costs or fixed overheads. "Gross profit," on the other hand, refers to the difference between sales and the direct cost of the product or service sold--which is the situation in this case.

To calculate gross profit, the cost of the product(s) is subtracted from revenue. The revenue figure is the actual amount that you've received (in other words, after any discounts), and before any tax or shipping is added. The cost of the product comes from the amount that you've entered in the Product Information Database. That means that you need to make sure that you have the Product Information Database updated with the correct product cost.

If you use Method 3 for any of the commission calculations (CC), you can adjust the gross profit in one or two additional ways. You can indicate these options by clicking on the "Options" button.

(2) Removing invoiced fees from the gross profit. Invoiced fees are often storage or service fees that you pay to have your products warehoused with a distributor. If you have recorded those fees on invoices by use of the 'F' sales code, then you can also have them removed from the gross profit figure. To remove either of these amounts, check the appropriate box(s) below. (More information on the 'F' code)

Early Payment Discounts & Gross Profit Calculations. Finally, if you use the gross profit calculation method, you'll want to keep in mind that early payment discounts may not be figured into the profit figure. Early payment discounts are the discounts that you offer to customer who pay before a certain date. If you use early payment discounts, be aware of the following:

1. Profit calculations take in account early payment discounts if: (a) the customer pays off their invoices one at a time; and (b) you use the Mark Paid feature. In particular, you'll need to use "One Invoice, One payment WITH Discount Adjustment" option found on the Mark Paid dialog box. When you use this feature, the total amount on the invoice is reduced according the discount afforded to the customer. Thus, the profit figure upon which the representatives' commissions are calculated is accurate.

2. Profit calculations do not take in account early payments if: (a) the customer pays a lump sum for a group of invoices; and/or (b) you issue a credit invoice to the customer to compensate for the early payment. Unlike the situation described above, in this case, the amounts on the invoices stay the same and credit is issued on a separate invoice. AnyOrder carries out its calculations in a normal manner, but profit will be figured on the unadjusted totals found on the invoices. Thus, gross profit, on which the representatives' commissions are calculated, is higher than had the early payment discount been included. You'll want to take that into account when you negotiate commissions with your representatives. It doesn't make a difference if you don't use early payment discounts. It also doesn't make a difference if you use method #1 above to account for early payments. However, it would make a difference if you have lots of customers that pay on lump sum basis.

Sales Representative features can be turned on or off. If you don't have sales representatives and you don't expect to use them in the near future, you may wish to turn the feature off. Primarily, this helps remove clutter from the Inventory Report Screen by removing the "Calculate Sales Commissions button." To turn the features on or off, select FILE and BASIC PROGRAM SET-UP. Click on the 'Miscellaneous' tab and make the desired change.

Once you have your sales representatives set-up, you indicate which individual should receive a commission by coding your invoices. The code is placed in the "Reps" field on the upper right hand corner of the invoice. Use the "L" button to bring up a pop-up list from which you can select the appropriate representative.

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Be Sure to Include Returns & Damages in Addition to Sales: You will, of course, be entering the sales representative's code on invoices which are sales, but you should also code invoices that involve returns or damages ("R" and "D" sales codes). As long as the invoice includes the sales representative's code, returns and damages will be subtracted from the individual's total commission. If, however, you do not include the code, the individual's commission will not be adjusted. Additionally, as noted below, for commissions based on the gross profit calculation method, you have the ability to remove fees (sales code code of "F" in the Item Area). If you want fees to be removed, be sure to include the sales representative code.

Consigned Items. AnyOrder disregards the representative code when an invoice is used to place items on commission (in other words, you use the sales code of "C" in the Item Area). However, when consigned items are sold by using "S" code in the Item Area (or if you have returns on consigned items), make sure the invoice is coded with the sales representative's code.

Periodically, you'll want to prepare a report of sales commission activity. To generate a report, select MAIN TASKS >> MASTER LIST OF SALES REPORTS. Click on the "Sales Commissions Report" button.

From the list that appears, select one or more representatives for whom you wish to run a report. To make a selection, click in the 'Y' column.

You'll also need to indicate the range of dates that the report should cover. You can click on the "C" button to bring up a calendar to select from. Or you can click on the "Options" button to bring up several different date range options.

Additionally, you can select "Breakdown by Customer." This itemizes the commissions of each individual representative according to customer. In order to use this feature, the customers that you want included in the breakdown must be included in the Customer Number Database.

After clicking "Start Process," AnyOrder will assemble all of the necessary data and generate the "Sales Representatives and Commission Report."

The report is a summary of what is owed to each sales representative. It includes a list of your sales representatives, the amount allocated towards commissions, the commission percentage, and amount of commission due to the representative. Note that figure in the "Amount" column represents total sales if the Commission Calculation Method (CC) is 1 or 2. It's gross or adjusted gross profit if the CC Method is 3.

You can move the report to Excel (or a spreadsheet of your choice) for printing purposes - or to re-configure it to your specifications:

Overall Report. To move the summary information to Excel (or a spreadsheet program of your choice), click on the "Overall Report" button. This information is the same that appears in the screen display described above: a summary of what is owed to each sales representative. Once the spreadsheet appears, you can make additional adjustments, format the data, and print it.

Raw Data Log File. Level 7 users have an additional choice by clicking on the "Raw Data Log File" button. This sends more detailed information to Excel (or a spreadsheet of your choice). In this case, the data consists of a list of all invoices included in the representative's payment. (Note that this option is not available for the Gross Profit Method.) It does not provide the total due to the representative (the Overall Report does that), but the list of invoices provided by this report is beneficial from a sales representative's perspective. It allows them to review the list to assure themselves that all of their sales have been accounted for.

If you use the Raw Data report to calculate the total due to the representative and then compare that figure to the Overall Report totals, you should take in account of how you are paying sales representatives. In particular, you need to take in account whether their commission based on invoiced sales (before shipping or tax is added) OR whether their commission based on total invoiced sales (including shipping). Additionally, you need to take in account whether or not their commission is based on paid sales or not. All the necessary the information to make the correct calculation is found on the Raw Data spreadsheet including whether the invoice has been paid or not, the amounts before and after shipping, etc.

Note that it is possible to create an Excel Macro to make the calculations, format and print the report. If you are familiar with Excel Macros, you can do this yourself, or, if desired, we can create a personalized macro for you. Contact us for pricing.

If you use the Gross Profit Method, you'll want to make sure that you've entered a cost for each your products. If you do not enter a cost for one or more of your products, commission calculations will be too high. For example, let's say you sell a kids tennis racket for $20.00, and the cost of producing the racket is $5.00. Let's also say that the agreed upon commission with your sales representative is 10%. If you sell 100 rackets, the gross profit is $1,500 ($2,000 - $500). The commission will be $150 (.1 x $1,500).

But, if you do not include a cost for the racket, the gross profit is $2,000 ($2,000 - $0). The commission will be $200 (.1 x $2,000). That's $50 too high.

When you run the report, AnyOrder will warn you with a message and list any products which do not have cost figures. If any of those products appear on invoices attributed to sales representatives, then you'll want to exit from the report. Return to the Main Invoice Screen and add the appropriate cost information to the Product Information Database.