Understand commissions calculation

Commissions are the rewards an agent or trading company earns when handling and selling a product on behalf of a group of vendors. It is usually calculated as a percentage based on the revenue generated when the products are sold to customers.

This topic provides a detailed overview of the commission calculation process for purchase lines with linked sales transactions and transaction type of Claims. The calculation is based on the commission setup table and relevant transaction data. For more information, see Commission and commission groups setup.

The system considers the revenue line, which determines the proposed quantity (base) representing the quantity associated with the sale, and then calculates the proposed gross revenue and discount value. The proposed net revenue is also calculated, representing the revenue after deducting discounts. Then, the system examines the associated claim lines which deals with any associated claims. It determines the proposed quantity for the claim and calculates the proposed claim value gross, which is the total value of the claim before any discounts or deductions. The proposed claim discount is also considered. This process ensures that commissions are accurately calculated, considering both sales and claims, resulting in precise commission values for each purchase line.

The system calculates commissions using the following formulas for Accounting Method field set to Account Sale or Pooling.

• For Account Sale:

  • Account Sale Quantity = (Account Sale Revenue Line) - (Account Sale Claim Line)
  • Account Sale Gross Revenue = (Account Sale Revenue Line) - (Account Sale Claim Value Gross)
  • Account Sale Discount Value = (Account Sale Revenue Line) - (Account Sale Claim Discount)
  • Account Sale Net Revenue = (Account Sale Revenue Line) - (Account Sale Claim Value Net)

• For Pooling:

  • Pooling Quantity = (Pooling Revenue Line) - (Pooling Claim Line)
  • Pooling Gross Revenue = (Pooling Revenue Line) - (Pooling Claim Value Gross)
  • Pooling Discount Value = (Pooling Revenue Line) - (Pooling Claim Discount)
  • Pooling Net Revenue = (Pooling Revenue Line) - (Pooling Claim Value Net)

When you modify the sales gross revenue or the claim gross value, it leads to updates in the value of the respective field, and the calculation for the commission is performed again, and the cost gets updated.