Sales commissions: a rule that calculates itself
Commission is the single most argued-about line between management and staff, and the reason is not the numbers — it is that it gets worked out outside the system. A spreadsheet at month end, somebody adding up invoices by hand, a return that gets missed, a disagreement over an invoice raised on the last day. The fix is to write the rule once and let the system compute it from the invoices themselves.
The idea in a minute
There is no one rate for the whole commission: each employee, department, job title or branch has a row with its own rate. It is worked out after discounts: a % of the net before tax or with tax, or a fixed amount per unit or per invoice — and you are the one who writes it.
How it works
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1. You write your own commissions
No single shape is forced on you. «New commission» opens an empty six-step form, ending with a summary and a live preview on a sample sale that shows what the commission comes to and who gets it before you save. You write the commissions you need, and each one is calculated on its own.
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2. On what: the scope
You set what the commission is earned on: particular revenue accounts (choose none and it is all revenue), item categories, or specific items and services, the document type (sales invoices, till sales, or both), and the branches. You can give it an end date if it is a campaign for a period.
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3. How it is worked out: a rate or a fixed amount
Four ways: a % of the net before tax, a % of the net with tax, a fixed amount per unit sold, or a fixed amount per invoice that holds items from the commission's scope. Always after line and document discounts. If you want, add a monthly minimum that must be reached first (for every branch, or per branch).
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4. Who earns it and how much: a row each, with its own rate
There is no single rate split between groups. You add a row for each employee, department, job title, branch, or «all employees», and every row has its own rate (or fixed amount) — Ahmed 3% of his own sales, Mohamed 5% of his own sales, the supervisor 1% of all sales, say. A row is either «own sales» (only the sales that person made: read off each sale with nothing to choose: the sales where they are the salesperson on the invoice or till sale, or the jobs where they are a technician on the appointment or repair order — several technicians on one job share its commission) or «all sales» (every sale in scope, whoever made it). The same person can have both rows. A department, job-title or branch row pays each of its people the full rate: «sales department 5%» means every sales employee gets 5% of their own sales — never 5% shared between them. Tiers (a rate that rises with the month's sales) belong to each row: on that person's own monthly sales for «own sales», on the branch's monthly sales for «all sales». You can also give each row a different rate on each revenue account, category or item — just not together with tiers on the same commission. Commissions saved the old way keep calculating as before.
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5. One sale won't pay twice unless you mean it
If two commissions could pay on the same sale, both pay and you get an overlap warning. If you want only one to pay, put them in the same exclusive group: only the higher priority pays, and the other shows as excluded.
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6. Calculate on any day — and approve before anything posts
You can calculate commission on any day, up to a day you choose, for all commissions or for one, and each calculation adds only the difference from what was already approved. «Preview» shows the figures without writing anything. And nothing reaches your accounting until a person approves the calculation — approval is always required, so a human looks at the numbers before they become a liability in the books. Every figure records the row it came from and its basis. The expense goes to an account you choose per employee or per branch (for one commission or for all), otherwise the commission's own account, otherwise the company default.
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7. A return claws the commission back — from the same people, at the same rate
Every commission has a return window in days, counted from the invoice date: commission on a sale waits that long. If the customer returns the goods inside the window, the commission is cancelled before it is ever earned. If they return after it, you decide: either the commission stays with the employee, or it is deducted in the next calculation, up to a number of days you choose after the sale — from the same employees at the same rate they earned, without changing the band the month reached. If what they are still owed does not cover it, the rest becomes an advance deducted from next month's salary. If the employee has left, you choose the account that takes the amount as a loss.
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8. Changing a commission does not rewrite the past
When you edit a commission, the change starts on the 1st of a month you choose (this month or later). Earlier months keep their old settings, and a month already calculated does not change. That prevents the worst argument there is: an employee paid less on sales that were agreed at a different rate.
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9. One voucher pays the employee
The commission statement lists everything approved and its state (owed, in a payout, paid). From «Pay commission» you pick the employees and the treasury, and the system makes one voucher per employee for what they are owed for the period. If a voucher is rejected or voided, the amounts return to owed instead of sitting there marked paid with nobody having received anything.
In short
You write your own commissions: on revenue accounts, categories or specific items, as a rate or a fixed amount per unit or per invoice, with a monthly minimum if you want.
A row for each employee, department, job title or branch at its own rate, on «own sales» or «all sales», with its own tiers if you want.
Each calculation adds only the difference, and nothing posts until it is approved.
One voucher per employee from the commission statement, and a return after the window is never deducted.
Different ways to incentivise
Commission to each salesperson on their own deals
Each salesperson is a row on «own sales» at his own rate, so he takes the commission on the invoices he sold — never on a colleague's. If they all share one rate, a single sales-department row pays each of them the full rate on his own sales. If you want a fixed amount per deal instead of a rate, choose a fixed amount per invoice.
Commission on installation or repairs
A commission like any other: you put it on the installation or repair revenue account (or on the service items themselves), give each technician a row on «own sales» at his rate — counted from the technicians on the appointment or repair order (several technicians on one job share its commission) — and the supervisor a row on «all sales» at his. It is calculated, approved and paid with the rest of the commissions.
Commission on a branch's performance, or on specific lines
A branch's staff earn commission on their branch's sales whoever made the sale — like a restaurant: a row for the waiters on «all sales» at one rate, a row for the chefs at another, and each of them gets the full rate. And you can give a higher rate on the categories or items with the best margin, to push them.
What it does not do yet
Commission is earned on the confirmed invoice — there is no commission on collection. Nor is there a monthly cap, ready-made templates, or a trial run on a past month (the live preview in the form works on a sample sale only).
Still working out commissions in a spreadsheet?
Talk to us — we'll set your commission up in the system and show you a real employee's commission statement computed from the sales themselves.