What Commission Does
Commission pays your sales staff a percentage of what they sell. You set the percentage once, and at the end of each month the system works out what each person earned, you approve it, and your books update themselves.
The three ideas behind it
1. Commission is earned on money you have actually received. Not on invoices raised. If a customer buys on credit and hasn't paid yet, nobody earns commission on that sale — the moment you record the customer's payment (Accountant → Receivables), it starts counting. A part-payment earns a part of the commission.
This protects you from the classic problem: paying commission on a sale, then never collecting the money.
2. The percentage applies to sales excluding tax, less returns. Tax you collect belongs to the government, so it never earns commission. And if goods come back, the return is charged against the person who made the original sale — not against whoever happened to process the return at the counter.
3. Commission is a cost, so it shows up in your accounts. When you approve a month, the system records the commission as an expense in your Profit & Loss and as money owed to staff on your Balance Sheet. When you pay it, that debt clears. You never have to pass a journal entry by hand.
What you'll find here
| Screen | What it's for |
|---|---|
| Sales → Commission Plans | Who earns commission and at what rate |
| Sales → Commission Settlements | Each month's calculation, approval, and payment |
Who can see and do what
Three separate permissions, so you can hand out exactly as much as you mean to:
- View — see plans and statements, change nothing.
- Manage plans — create and edit plans, and start a monthly run.
- Approve — sign off a month (which books the expense) and record payments.
Someone who sets the rates can't approve their own payout unless you give them that too. If a person has none of these, the commission entries don't appear in their sidebar at all.
Before you start
Two things need to be in place for commission to be worth anything:
- Your sales need a salesperson on them. Counter sales record whoever was logged in at checkout; route and van sales use the rep who owns the day. Sales recorded before this feature was switched on have nobody attached, so they can't earn commission.
- Customer payments need recording. If you sell on credit, use Accountant → Receivables to record money as it comes in. That's what turns a credit sale into commissionable collection.