Chapter 1: System Setup Guide

Commission Structure

The Commission Structure setup screen (Fig. 4) allows users to specify how the commissions that are paid to employees are calculated. Commissions are based on orders and the product types or individual products that they contain. Once the commission structures have been specified, you can assign them to individual employees, inventory items and inventory item types (see the sections on Employee Setup, Inventory Setup and Maintenance, and Company Information further down this chapter).

Fig. 4 - The Commission Structure setup screen

To work with your commission structures, go to File > Setup > Commission Structure from the main application menu.

To add a new structure, click on ‘Add’, type a ‘Structure Name’ and select a ‘Commission Type’. This type could be a gross percentage, a margin percentage or a fixed amount. Table 2 illustrates the differences among these types.

 

Table 2 – Commission structure types

 

Structure type

Description

Applicable to

Example

 

Inventory Item type

Inventory Item

Employee record

 

Gross percentage

Commission is based on a percentage of the retail price of the product or service sold.

Your commission is 10% of the retail price plus a $5 special incentive. On an item priced at $100, the commission would be:

 

Margin percentage

Commission percentage changes after a certain dollar amount (the margin amount) of the order total.

-

-

Your commission is 10% on the first $40 (margin amount) of an item and 15% on the remaining balance. On a $100 item, the commission would be:

 

Amount

Commission is a fixed amount on each product or service sold, irrespective of its price.

-

Your commission is $10 plus a $5 special incentive on a certain item. Regardless of the item price, the commission would be:

 

Fig. 5 - Calculating commissions

IMPORTANT: For commissions to be paid on items, you must mark the corresponding item types as commissionable on the ‘Commission’ tab of the Company Information screen (File > Setup > Company Information).

The flowchart on Fig. 5 illustrates how commissions are calculated in My Vision Express. Notice that there is a hierarchy in the way that commissions are applied. First, the system will check if a commission has been assigned to the record of the employee processing the order. If so, it calculates the margin or gross commission percentage (as specified on the employee record) and adds the special incentives (spiffs). Otherwise, the system checks if there is a commission assigned to a commissionable item on the order. If this is the case, it calculates the gross percentage or the fixed amount commission (as specified on the inventory item setup) and adds the spiffs. Finally, if no commission has been specified for either the employee or the item, the system will check if one has been assigned to the item type. If it has been, it calculates the gross percentage or the fixed amount commission (as specified on company information setup) and adds the spiffs.

NOTE: A spiff is only meaningful when the commission structure where it is set is attached to an inventory item or item type. A spiff set on a commission structure attached to an employee record will never affect a commission calculation.

NOTE: Spiffs attached to an inventory item and its item type will both be cumulatively added to the commission (as long as the item type is commissionable). This is why amount commission structures have their own separate spiff field.

To assign a commission structure to an individual employee, go to File > Setup > Employee from the main application menu (see the Employee Setup section further down this chapter). To assign a commission structure based on an individual inventory item, go to File > Inventory from the main application menu, select one of the inventory listing screen for the item type that you want to modify and double click on the item in question to modify it and enter the commission information on the corresponding fields (see the Inventory Setup and Maintenance section further down this chapter). To assign a commission structure to an inventory item type or to mark an item type as commissionable, go to File > Setup > Company Information from the main application menu and select the ‘Commission’ tab as explained in the next section of this chapter.

As explained above, once an employee’s commission has been setup, the employee gets paid that commission plus any spiffs on inventory items and item types sold. On an item priced at $200, if you pay a margin commission of 10% on the first $40 and 15% on the balance remaining, plus a $7 item type special incentive and $10 inventory item special incentive, you would get:

If an employee record has no commission assigned to it, the commission assigned to the individual inventory item is used plus any spiffs setup for that item type. For example, if your commission is 10% gross percentage on an item worth $100 plus $7 item type spiff and a $10 item spiff, you will have:

If neither the employee nor the individual item has any commission information, then the commission assigned to the item type is used. In this case the commission is a simple summation of the spiff amount assigned to the item type plus the gross percentage or the flat amount specified for the item type.

After setting up your commissions and processing a few sales, you can view a report of the commissions earned by employees during any given date range by going to File > Reports > Order > Employee Commissions from the main application menu. For more information, refer to the Order Reports section of Chapter 10.

More:

Employees