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To pay sales compensation, your compensation department probably needs to:

• Be notified when a sales-related event occurs, such as when an order is booked or an invoice is processed

• Obtain information about the sale -- such as the salesperson's name and the amount of sales credit

• Determine whether the salesperson who received initial credit is eligible to be compensated for the sale

• Calculate the compensation based on a formula

• Send payment information to your Payroll or Accounts Payable department so a check for the compensation can be issued

Step 1 Collect the compensation transaction

During setup you define the structure of a compensation transaction, which tells Oracle Sales Compensation what information you need to collect to calculate compensation and where in the database this information is stored.

Oracle Sales Compensation supports two sources of transactions:

• Oracle Receivables through a direct interface

• Any foreign source through the transaction interface

When you run a process to collect compensation transactions, among other information, Oracle Sales Compensation collects the following from the source transaction:

• The name of the credit receiver, or the salesperson assigned sales credit for the transaction

• The amount of sales credit

Step 2 Classify the transaction

During setup, you categorize your sales revenue into revenue classes, which specify which types of revenue warrant compensation in your organization. When you run a process to classify transactions, Oracle Sales Compensation uses a set of conditions you define to determine the class to which the transaction belongs.

Step 3 Determine compensation recipients

After you define revenue classes, you assign them to a compensation plan and assign the plan to a salesperson. Oracle Sales Compensation awards compensation if the revenue class of the transaction matches a revenue class assigned to the credit receiver's compensation plan.

Step 4 Calculate compensation

Oracle Sales Compensation uses a predefined formula and compensation terms defined in the credit receiver's compensation plan to calculate the compensation amount.

Step 5 Pay the compensation

When the compensation earnings have been calculated, you run a process to submit payment to the payment processing application of your choice.

The following figure shows an example of this process for a software invoice at Global Computers, Inc., a fictitious personal computer company:

When you pay compensation, you run each of the processes shown in Figure 1 -1. Each process is driven by information specific to your sales operations, and thus has some corresponding setup steps. How these steps are organized is explained next.