Commissions
The NetSuite sales compensation feature seamlessly integrates with accounting and payroll features. When we enter deals, NetSuite automatically calculates the commission. We do not have to work with complicated spreadsheets or import data between applications.
The benefit of this integration because they will know how much commission they have earned before they receive their commission checks. With their NetSuite dashboard, sales reps can view estimated and actual commissions in real-time.
Using the Employee Commission Feature :
To begin using the Employee Commissions feature, an administrator needs to turn on the feature at Setup > Company > Setup Tasks > Enable Features (Administrator). The feature is on the Employees subtab.
If the company offers incentives to partners for sales, you can also use the Partner Commissions & Royalties feature.
To begin using the employee commissions feature there are 3 key things that need to do.
- Set commission preferences at Setup > Sales > Sales Management > Commissions (Administrator). These preferences determine how and when you pay employee commissions and affect all commissions set up in your NetSuite account.
- Create employee commission schedules at Forecast > Commissions > Employee Schedules > New (Sales Administrator). Commission schedules define the rules that determine how commissions are calculated. Schedules can be based on total sales, percentage of quota met, quantity sold, total profit or on profitability.
- Create and assign employee commission plans at Forecast > Commissions > Employee Plans > New (Sales Administrator). Employee commission schedules are placed in commission plans that are assigned to your sales reps. You can include multiple commission schedules in a single plan, and you can assign more than one sales rep to a plan. You cannot, however, assign a sales rep to more than one commission plan for the same date range.
Setting the Commission Preferences
We can set company commissions preferences at Setup > Sales > Sales Management > Commissions. You can set the following preferences:
Commissions Paid By Default On – choose when commissions are eligible to be paid. Your options are:
- Billings/Bookings – When the sales transaction is invoiced, or in the case of commission based on alternate sales amounts (ASA), when sales orders are booked and approved.
- Collections – When payment is received partially at billing/booking and partially upon receipt of payment.
Allow Overwrite in Schedules – Tick this box if you want to overwrite commission schedules when commissions become eligible. If you leave this box unchecked, the Eligible Amount field on commission schedules is a read-only field.
Commission Eligibility Period – If you want to wait for a number of days after the sale is made or billed before paying commission to sales reps, enter the number of days here.
Calculate Commissions on Shipping Items – Tick this box to include shipping costs when calculating a transaction’s commission amount. (This preference will be applied to only new transactions).
Require Accounting Approval of Employee Commissions – Check this box to require your accounting department to approve employee commissions and payments.
Require Accounting Approval of Partner Commissions – Check this box to require We accounting department to approve partner commissions and payments.
Maximum Commission Brackets – Enter the maximum number of brackets to include in commissions schedules.
Default Employee Commissions Expense Account – Select the expense account to which we want employee commission payments to post by default.
- We can select a different account on the commission transaction.
- Leave this box clear if you do not want a default account.
Default Partner Commissions Expense Account – Select the expense account to which we want partner commission payments to post by default.
- You can select a different account on the commission transaction.
- Leave this box clear if you do not want a default account.
We can choose to pay commissions on your employees’ regular paycheques if you use the NetSuite Payroll feature.
Company commission preferences apply to everyone with access to your NetSuite account.
Important
Sales transaction pages such as Sales Order, Invoice, Credit Memo, Cash Sales, Cash Refunds, and Return Authorisations have an ‘Exclude Commissions’ box. Ticking this check box excludes the transaction and its subordinate transactions from inclusion in all commission calculations.