PeopleSoft Enterprise Order Management 9.1 PeopleBook

Structuring Commissions

This chapter provides an overview of commissions and discusses how to calculate commissions.

Understanding Commissions

PeopleSoft Order Management enables you to determine commission rates in a variety of ways. Commission rates can be defined by employee or by product and can be earned by individuals or shared by teams. They can be granted at the order level or at the scheduled shipment level for quotes in addition to sales orders.

This section lists common elements and discusses:

Team members.
Methods for calculating commission rates.
Commission application levels.

Common Elements Used in This Section

Basis	Time at which commission rates are determined, either at booking or at shipping.
Support team	Group of people working together to sell to or support a customer. You can assemble support teams and associate them with customers, quotes, sales orders, and sales buying agreements.
Team member	Individual who is part of a support team. Each team member has either a commissionable or a non-commissionable role.
Commission schedule	Sale amount, date ranges, and corresponding commission rates for support team members, also known as commission plans.
Pro rata commission method	Calculation method by which products determine commission rates, which are then distributed among team members. Available at the schedule level only.

Team Members

PeopleSoft Order Management refers to your customer sales and support staff as team members.

Define groups of team members by employee role, such as account manager, sales manager, or customer support; such team member groupings are called team member types. Refine team member types further by associating them with customers, quotes, and sales orders.

Note. Support teams (groups of team members) do not have commissionable statuses. You cannot declare a support team eligible or ineligible for commissions as a team. Support teams are distinct from team member types.

Each team member type and each individual team member has a status of either commissionable or non-commissionable. That status determines whether the system calculates commission rates for team members. Determine commission statuses for team member types on the Team Member Types page, and commission statuses for team members on the Team Member Personal Data - Member Commissions page. The Member Commissions page takes precedence over the Team Member Types page. If the settings on the two pages conflict, the system uses the settings from the Member Commissions page.

Methods for Calculating Commission Rates

PeopleSoft Order Management provides three methods for determining commission rates:

Team member: A flat percent applied to every sales order for a particular team member.

For example, a team member might receive a 10 percent commission rate on every sales order completed.
Commission schedule: A varied range for sales date and sales amount applied to every sales order for a particular team member.

The commission schedule method depends on the date and the minimum and maximum sales amount. You cannot use a date range only. For example, a team member might receive a 6 percent commission on sales orders completed in the first quarter of the year, and 8 percent on sales orders completed in the second quarter of the year, as the commission sales amount increases.
Pro rata: Based on the ordered product, divided among team members.

For example, set the commission rate for a product at 10 percent. Two team members are eligible to receive commissions for that product. To split the commission from that schedule evenly between the two team members, each team member receives a 5 percent commission for that schedule.

When you select a commission rate calculation method, some commission options are available and other options become unavailable. The table shows the options available for each of the three commission rate calculation methods:

Commission Rate Calculation Method	Available at Header Level	Available at Schedule Level	Rate Determinant	Rate Flat or Variable by Sales Amount	Time of Sales Amount Calculation
Team Member	Yes	Yes	Team Member	Flat	Booking
Commission Schedule	Yes	Yes	Team Member, Sale Price, Date	Variable	Booking or Shipping
Pro Rata	No	Yes	Product	Flat	Booking

Commission Application Levels

PeopleSoft Order Management can determine commission rates at either the header level or the schedule level:

Header level: Rates are established for the entire order or quote.

Use one of the two calculation methods that are based on team member criteria: the team member method or the commission schedule method.
Schedule level: Rates are established for individual schedules, where the team might vary or the commission rate might vary, based on the products sold.

Use any of the three calculation methods: team member, commission schedule, or pro rata.

Note. Enter commission information at the header level even if you have chosen to calculate commissions at the schedule level. If you are calculating commissions by schedule, the system uses the commission information that you enter at the header level to create a commission template that changes by default to every schedule for the order; you can override that template.

Prerequisites

Before you can calculate commission rates, set commission variables for your business units and products, and set up team members:

Establish whether or not commissions are calculated, and if they are, whether they are calculated at the header or schedule level on the Order Management Definition - Order Management Setup page.
Define products as commissionable on the Product Definition - Options page.
Establish commission settings on the Team Member Types page.
Establish commission settings for team members on the Team Member Personal Data - Member Commission page.
Set up a commission schedule on the Member's Commission Schedule page.

Calculating Commissions

PeopleSoft provides you with the ability to calculate commission rates because the algorithms used to calculate commissions vary greatly, but leaves the computation of commission amounts to you. For example, the system informs you that a team member has earned a commission equivalent to 10 percent of a 1,000 USD shipment, but it does not calculate the actual amount–100 USD.

The system calculates commission rates on the Header Commissions page and the Schedule Commissions page.

Note. PeopleSoft Order Management does not calculate commission amounts; rather, it calculates commission rates by percentage. You can then calculate commission amounts in another application. For example, you could download commission rate information to a financial spreadsheet application and perform calculations there.

Calculating Commissions on Quotes

The critical difference between sales orders and quotes commissions is that the system does not consider quotes when calculating a team members total bookings and shipments to determine that team members commission schedule level for a calendar period.

This section discusses how to:

Calculate commissions at the header level.
Calculate commissions at the schedule level.
Run the Update Order Commission Data process.

Pages Used to Calculate Commissions

Page Name	Definition Name	Navigation	Usage
Header Commissions	ORDENT_HDR_COMM	Select Commissions from the Header Menu on the Order Entry Form page.	View or modify commission information for a sales order at the header level.
Schedule Commissions	ORDENT_SCH_COMM1	Select Commissions from the Schedule Menu on the Shipment Schedules page.	View or modify commission information at the schedule level.
Update Order Commission Data	RUN_OMS5300	Order Management, Quotes and Orders, Process Orders, Update Commission Information	Establish request parameters to calculate commission schedule percentages and create the commission Structured Query Report.

Calculating Commissions at the Header Level

Access the Header Commissions page (select Commissions from the Header Menu on the Order Entry Form page).

Support Team Code

Displays the support team code, which appears by default from the General Miscellaneous Info (general miscellaneous information) page, associating the commission with the default team for orders by this customer.

Note. You can maintain support team information for an order regardless of whether any support team members are eligible to receive commissions.

Commissions Level

Select the commission level, which appears by default from your selection on the Order Management Setup page. Values are:

By Header: The Method field can only be Comm Pct (commission percentage).

By Sched (by schedule): The Method field can be either Comm Pct or Pro-Rata.

Member

The system populates the member lines with members of the selected support team, thereby making those team members eligible to share this commission. You can change the default support team code or opt for no support team at all. You can also add or delete team members from the commission.

Priority

Appears by default from the Support Team Members page. Confirm that the person selected as the 001 priority member is actually a member that has been identified as a salesperson on the Team Member Types page. If not, then you might have the wrong salesperson referenced on PeopleSoft Billing and Receivables documents.

Member Type

Appears by default from the Member Commission page for the team member along with the Commissionable option. The default source can be either SCH (schedule), if the commission is based on a schedule, or MBR (member), if the commission is based on a flat rate.

Get Schedule % (get schedule percentage)

Applies to commission schedule percentages only.

Commission % (commission percentage)

Displays the commission percentage. Values are based on the Default Source field. If the default source is:

MBR: Percentage changes by default from the selection on the Members Commission page for the team member.

SCH: Percentage is updated after the Update Order Commissions Data process is run. The process determines the correct percentages from the commission schedule set up on the Member's Commission Schedule page, and populates the Comm Pct field with that value.

SCH: when you are using the Pro-Rata method: Enter a portion of 100 percent for each team member who shares the commission for the product. The commission percentage for the product is established on the Product Definition - Options page. The total of the values entered for Comm Pct can be any amount from 0 to 100. The split between the commission points of the various team members must equal to 100 percent.

Note. Commissions are not calculated or paid on orders. The information is optional and is not currently used for any calculations.

Calculating Commissions at the Schedule Level

Access the Schedule Commissions page (select Commissions from the Schedule Menu on the Shipment Schedules page).

Schedule commission information appears by default from the Header Commissions page. You can override the commission percent and commission rate calculation method settings here at the schedule level. You can also add or delete team members from the commission.

Running the Update Order Commission Data Process

Access the Update Order Commission Data page (Order Management, Quotes and Orders, Process Orders, Update Commission Information).

The Update Order Commission Data process is the final step in commission rate calculation. The process:

Populates orders from electronic data interchange with commission information under these circumstances:
- The Support Team field on the order header is blank.
- The Commission Level field on the order header is blank, or the value in it matches the default commission level for the business unit.
Calculates commission rates for schedules by searching tables to determine what each team member has sold in the past and the team members' schedule levels.

The process then calculates the commission rate for the order under these circumstances:
- The order has a commission method of commission percentage.
- There are team members whose default source for commission percentage is commission schedules.
Generates the Update Order Commission Data report.

Update Options

Default Commissions Data	Displays the default commissions data. The system populates commission for orders entered by EDI/XML. The system enters the default support team data for the ship to customer and commission information for each member of the team.
Schedule Percentage Commission	Displays the schedule percentage commission. The system calculates the team members total bookings or shipments for the period in which the order falls (defined by the Date From and Date To fields on the team members commission schedule), and calculates the commission rate. The process enters commission percentages for both sales orders and quotes, but quotes are not considered in calculating the total bookings or shipments for a team member.
Both	Populates commission data for orders entered by EDI/XML to calculate commission percentage for commission schedules.

Order Selection Option

By Get Percent Flag

Uses commission lines when the Get Pct flag is selected on the Header Commissions page or the Schedule Commissions page.

Note. If you select this option and you want the process to consider all orders, select Schedule Percentage Commission, not both, in the Update Options group box.

By Order Date Range

Uses all commission lines for orders within the specified date range for the team members whose commission percent source is SCH, and ignores the Get Pct flag value.

Note. If you select this option, the system overrides any values entered in the percent field manually where a schedule is the default source, even if you have not selected the Get Pct flag.

From Date and Through Date

Enter the from date and the through date for the orders that you want the process to consider.

Bookings/Shipments Calculation Option

Commissionable Lines Only

All sales order lines or only commissionable lines can be included when calculating the total bookings or shipments for a team member. This affects calculations when you are processing sales orders for commissions calculated at the header level. If the option is not selected, the process includes all of the lines on the sales order. When the option is selected, the process includes only those lines whose products are commissionable. When calculating commissions at the schedule level, only commissionable lines have commission records, so there are no non-commissionable lines for the system to consider.

Note. If non-commissionable lines are included in the process, the system uses them only to determine which level of the commission schedule applies to order headers or schedules. Commission percentages are applied to headers and schedules that include commissionable products only.

Support Team Code	Displays the support team code, which appears by default from the General Miscellaneous Info (general miscellaneous information) page, associating the commission with the default team for orders by this customer. Note. You can maintain support team information for an order regardless of whether any support team members are eligible to receive commissions.
Commissions Level	Select the commission level, which appears by default from your selection on the Order Management Setup page. Values are: By Header: The Method field can only be Comm Pct (commission percentage). By Sched (by schedule): The Method field can be either Comm Pct or Pro-Rata.
Member	The system populates the member lines with members of the selected support team, thereby making those team members eligible to share this commission. You can change the default support team code or opt for no support team at all. You can also add or delete team members from the commission.
Priority	Appears by default from the Support Team Members page. Confirm that the person selected as the 001 priority member is actually a member that has been identified as a salesperson on the Team Member Types page. If not, then you might have the wrong salesperson referenced on PeopleSoft Billing and Receivables documents.
Member Type	Appears by default from the Member Commission page for the team member along with the Commissionable option. The default source can be either SCH (schedule), if the commission is based on a schedule, or MBR (member), if the commission is based on a flat rate.
Get Schedule % (get schedule percentage)	Applies to commission schedule percentages only.
Commission % (commission percentage)	Displays the commission percentage. Values are based on the Default Source field. If the default source is: MBR: Percentage changes by default from the selection on the Members Commission page for the team member. SCH: Percentage is updated after the Update Order Commissions Data process is run. The process determines the correct percentages from the commission schedule set up on the Member's Commission Schedule page, and populates the Comm Pct field with that value. SCH: when you are using the Pro-Rata method: Enter a portion of 100 percent for each team member who shares the commission for the product. The commission percentage for the product is established on the Product Definition - Options page. The total of the values entered for Comm Pct can be any amount from 0 to 100. The split between the commission points of the various team members must equal to 100 percent.