Summary: Answers to frequently-asked questions about tracking and reporting sales commissions in Clients & Profits. Sales commissions are based on job billings for clients, jobs, and job tasks that are marked as commissionable. Commissions are calculated for either account executives and business development (bizdev) executives, or both. Commission rates are set by job type and can be a percentage or flat-rate spiff. Individual job tasks and invoice line items can be made commissionable, which Clients & Profits X uses to calculate commission amounts on reports.
Q. What are sales commissions?
Sales Commissions is an optional feature in C&P X that allows an agency to calculate a sales perfomance bonus based on either a percentage of commissionable billed amounts to a client or based on a fixed dollar amount (spiff) for each invoice generated to a client. Percentage based commissions can be calculated for the account executive (AE) on a client’s jobs or the individual who developed the business for the agency (Biz Dev Exec) from a client. Spiffs can only be calculated for the AE on the client’s jobs.
Q. What kinds of billings are used in the sales commission calculation?
All A/R invoices can be included in the commissions calculation. Billings that bill a single job such as Job Billings, Progress/Final Billings, Estimate Billings, and WIP billings will automatically pull in the sales commission information (i.e. commission rate, AE, Biz Dev initials and task commission setting) from the job ticket. A/R invoices that do not bill a single job such as Media Billings, Multi-Job Billings, Miscellaneous billings, Retainer billings can be included in the commissions calculation by entering the sales commission information to the these invoices. This is because the commission rates and spiffs are derived from the Job Type/Spec Sheet associated with an individual job. Invoices that bill multiple jobs potentially could be subject to various commission rates or spiff amounts for each job on the invoice. Invoices such as Retainer billings and Miscellaneous billings which do not bill a job ticket would have no commission information to pull into the invoice. For this reason you will need to manually enter the the commission information onto these non job specific invoices if you want them included in the commissions calculation. Advance billings are unique as they do bill a specific job and will pull in the sales commission information. However, because the Advance billing does not bill a specific task you would need to double click on the billing line and check the commissionable box to have the commission calculate.
Q. Where do I print the reports that calculate the sales commissions?
Sales commission amounts are printed on the Sales Commissions A/R reports. Go to Accounting > Billing / Accounts Receivable > Print A/R Reports, then click on the Sales Commissions reports on the left. The Sales Commissions by AE and by Biz Dev Exec are the percentage of sales based commission reports, and the Sales Commissions - Spiffs are the spiff based commission reports. The Sales Commissions Audit is for the percentage of sales based commissions and includes the task billing amounts on each invoice, as well as the total commissionable amount for each invoice. The first two reports just print the total commissionable amount for each invoice.
Q. Exactly how are the percentage of sales based commissions calculated?
During the posting of an A/R invoice two things happen. First, it determines which tasks on that invoice were marked as commissionable (double click an invoice’s task to see this setting) and adds their billing amounts to determine the total commissionable billing amount for this invoice (commission task setting can be edited on the invoice). Second, the total commissionable billing amount and the commission rates for the AE and Biz Dev from the job type/spec sheet are stored on the A/R invoice invoice itself . These percentages can be edited on the invoice by clicking on the edit button and changing the percentages in the "Commission rates:" box. When printing the Sales Commissions A/R reports for the AE or Biz Dev Exec, it displays the total commissionable billing amount for each invoice, then multiplies it by the commission rate at the time of the invoice’s posting to derive the final commission amount to be paid to the AE or Biz Dev Exec.
Q. How do I set up percentage of sales based commissions to automate the process of calculating sales commissions?
There are two areas that both need to be set up correctly:
First, you need to ensure the invoice tasks are properly marked as commissionable. This is done by marking the client as commissionable under My > Clients and also by marking the task as commissionable under Setup > Task Table. When a job is added for this client, you’ll then notice the ‘Commissionable’ check box is now automatically checked in the add job window after tabbing off this client. When this check box is checked on the job, as tasks are added to the job either through a job type/spec sheet, or manually, if those tasks are also marked as commissionable in the task table, then they will be marked as commissionable on the job ticket itself (double click a job ticket task to see this setting). Then, in turn, when an A/R invoice is generated against this job ticket, any task marked as commissionable will also be marked as commissionable on the invoice itself. The A/R invoice itself is the final word on if a task’s billing amount will be included as commissionable sales. Keep in mind, it is not enough to just mark a task as commissionable in the task table. BOTH the job ticket and the task must be marked as commissionable to automatically mark this task as commissionable on the job ticket when it’s added to the job. Edit the job ticket to confirm that it is set as commissionable if you are not sure.
Second, you need to set up a commission rate. This is easier and is done under Setup > Job Type/Spec Sheets. Edit a job type and enter a commission rate for either or both the AE and Biz Dev Exec, depending on which of these you will want to calculate a sales commission. This rate will pull into the A/R invoice when it is posted per the job type associated with the billed job ticket. If this rate is later changed in the job type/spec sheet, the A/R invoice will keep the old rate at the time of its posting. If you want to update an already posted A/R invoice with a new rate, you’ll need to unpost the invoice and edit the rates and repost.
It is important to note that invoices that are not for a single job such as Multi-Job Billings, Media Billings, Miscellaneous Billings and Retainer billings will not automatically pull in the commission rate information from the job ticket. On these invoices you will need to manually enter the commission rate information.
Q. What about the AE or Biz Dev Exec, how do I make sure they are properly credited with the sales commission?
Again, the A/R invoice itself determines who is credited with the commission. Edit an invoice and note the initials in the AE/Team and Biz Dev Exec fields. The commissions for this invoice will be credited to these individuals. To ensure the correct initials are copied into each invoice, go to My > Clients then edit the client and enter the correct initials for the AE/Team and Biz Dev. These in turn will copy to new job tickets created for this client (edit the job ticket to see these fields). These in turn will copy from the job ticket to the A/R invoices added for this job. Again, it’s the initials on the A/R invoices that get the credit.
AR Invoices such as Multi-Job Billings, Media billings, Miscellaneous billings and Retainer billings which do not bill a single job will need to have the AE and Biz Dev initials added to the invoice. As these invoices are not billing a single specific job the commission information does not automatically pull into the invoice. On these billings you would need to add the AE and Biz Dev initials on the invoice in the AR and Biz Dev fields along with any other commission information.
Q. How do I set up spiff based sales commissions? Can I do both spiff and percentage of sales based commissions at the same time?
The only area to set up is the spiff amount under Setup > Job Type/Spec Sheets. You’ll notice that you have to choose between either a percentage of sales based commission or a fixed spiff amount, you can’t do both. After entering a fixed spiff amount ALL invoices for jobs associated with this job type/spec sheet will calculate this fixed spiff amount, regardless of the amount of the invoice, on the spiffs sales commissions report. You do not need to mark a client, job, job tasks, or invoice tasks as commissionable for spiff amounts to be calculated for invoices associated with this job type/spec sheet.
Q. Can I pay commissions or spiffs on only A/R invoices that have been paid by the client?
Yes, when printing the A/R Sales Commissions reports make sure to check the option to “Show Paid Invoices Only”. The Date Paid will show up in the right column for each invoice. Be careful when using this feature, because if you pay your commissions based on a date range of invoices, an invoice in that date range that was not paid today, may be paid tomorrow. When next printing this report you should run the old date range again to see if anymore paid invoices show up. You can either do this by comparing a hard copy of the old report to the new one for this same date range, or scanning the date paid column for any invoices paid after the date you last ran this report.
Q. If I change my commission rate on the job type/spec sheet will it impact old posted invoices?
No it won’t. But if you want the new rate to be applied to posted A/R invoices, then unpost the invoices. Then change the rates in the AE and Biz Dev fields and repost the invoice.
Q. I no longer want to include a certain A/R invoice task in the commission calculation, how do I remove it?
Unpost the A/R invoice, then double click this task and uncheck the ‘Commissionable’ check box. Repost the A/R invoice and the total commissionable billing amount will be recalculated and reduced by the amount of the billing on this task.
Q. Are sales commissions available in all versions of Clients & Profits?
No. Sales commissions are only available in Clients & Profits Pro and Enterprise Edition. They are not available in Job Tracker or Clients & Profits Classic. To upgrade your version of Clients & Profits, contact Clients & Profits Sales at (800) 272-4488