GRRGrower Return/Dynamic pricing setup/Set up commission and commission groups

Set up commission and commission groups

Article07/26/20245 min read

Commission refers to the compensation received by an agent or trading company for their services in handling and selling a product on behalf of a vendor. A commission is usually calculated as a percentage based on the revenue generated when the products are sold to customers. This principle ensures that both the vendor and agent/trading company benefit by achieving the highest possible revenue from the sales.

Note
This setup is available only when the Accounting Method field is set as Account Sale or Pooling.

Commission can be categorized into various groups and customized as needed. For example, it can be earned as pure profit or designated to cover specific business activities such as marketing or logistics expenses. Additionally, the commission can be allocated to third-party stakeholders, including external agents or shareholders, for their involvement in the sales process.

The following fields are available in the commission groups:

Field	Description
Code	Specifies the code indicating the type of commission.
Description	Specifies the description of the commission group.
Create Invoice	Specifies whether posting commission types under this commission group requires the creation of a purchase invoice for third parties, such as procurement agents or other external stakeholders with interest in the company’s trading model.

Note
You can rename a commission group by selecting Edit and changing the group name accordingly. When the changes are saved, the updated name will be automatically applied to any document that utilize this commission group.

Once the commission groups are defined, the group codes can be used in the Commissions Setup table. In this setup table, you can determine the actual value that can be retained as commission during vendor settlements. Since these agreements are typically highly specific to a combination of vendor and item, various dimensions (described in the Commission Setup table) can be established to determine the applicable commission percentage or value when creating settlements for a particular vendor and purchase order. When creating settlements for a specific vendor and purchase order, the setup is queried to determine which commission percentage or value should be picked for that specific transaction. For further details on how the settlement calculation is used in the Commission Setup table, see Understand commissions calculation.

The following fields are available in the commission setup table

Field	Description
Assign-to Type	Specifies the code indicating the type of commission. If a Vendor is selected, it is mandatory to choose a vendor in the Assign-to No. field. If All Vendor is selected, the commission line will be included in every account sale calculation, regardless of the specific vendor.
Assign-to No.	Specifies the vendor number for which this specific commission line was created. This field can only be filled when the Assign-to Type is set to the Vendor option.
Commission Group Code	Specifies a code that indicates the type of commission group.
Commission Type	Specifies the type of commission, either Percentage or Amount per purchase unit. When the commission type is set to Percentage, it indicates that the commission value in an account sale is calculated as a percentage over gross, net, or net net revenue. When the commission type is set to Amount per purchase unit, it indicates that the commission value is calculated by multiplying the account sale quantity with the commission value.
Commission Calculation Base	Specifies the revenue over which the commission is calculated when the commission type is set to Percentage. The options for the commission calculation base are gross, net, or net net. However, the commission calculation base is left blank for the commission type Amount per purchase unit as it is not calculated based on revenue.
Product Type	Specifies to which this commission line applies on item level. If an Item is selected, it is mandatory to select an item in the Product No. field. Additionally, you can define the item by its global lot attribute values in the corresponding fields. If All items option is selected, the commission line is included in every account sale calculation for the specific Assign-to Type and/or Assign-to No., regardless of the item or global lot attributes.
Product No.	Specifies the item number for which this commission line was created. The value in this field can only be filled in if the Product Type is set as an Item.
Commission Value	Specifies the value of the commission that the company has negotiated with the vendor when trading on the basis of accounting method account sale. If the commission type is set to Percentage, the value will be interpreted as a percentage of revenue calculated in the account sale. In case the commission type is set to Amount per Purchase Unit, the value is to be interpreted as a direct unit cost per quantity in the purchase unit of measure and local currency.
Pay-to	Specifies the pay-to-vendor number for third parties, such as procurement agents or other external stakeholders, who must be paid based on the revenue or quantities reported to the vendor of the finalized purchase order through an account sale. This field can only be filled if the commission group on the line has the property Create Invoice set to Yes.