Commissions may be calculated for employees by configuring "Commission Tables" for services, products or departments.
To configure your Commission Tables:
- Go to the Employees window by clicking on the Management menu, then Employee Control.
- Click on the employee you wish to set up, then click on the Edit button.
- You can have MicroBiz calculate commission based on sales by products and/or services, or alternatively by department. Make sure the desired option is selected in the "Commissions are by" section in the lower-right.
- In the lower-left of this window, enter a figure into the "Minimum revenue…" boxes, if desired.
- The figure entered in these fields will determine how much has to be sold before commission can be earned.
- Continue reading through these instructions for further explanation.
- Click on the Set Up Commission Tables button in the far lower-right of this window.
- If you selected "Products or Services" in the previous window, you will have two tabs on this screen (one for products and one for services). If you selected "Department" then you will have the ability to add/edit and select the department desired.
- For the Products or Services window, you can set up separate commission tables for both products and services and enable both, one, or neither. Make sure the "Enable" option is checked on the tab(s) that you wish to use for calculating commissions, then continue to step #7.
- For the Departments window, you can set up separate commission tables for any department. This option is the more customizable of the two. Make sure you have the desired department selected at the top of the screen, then continue to step #7.
- You have four "Tables" to select from here. Select the table that best suits your needs, then customize as applicable.
- Standard Tables 1-3: click on one of these options to get a very detailed description of their uses and fill the table in accordingly.
- Custom: use this table option to set up your own commission system. See "Setting up Custom Commission Tables" below for more information.
- Choose either "Retail Price" or "Profit" in the "Pay Commission on" section as desired
- Choosing Retail Price will calculate commission based on the price the customer pays.
- Choosing Profit will calculate commission based only on the profits you are earning on the sale.
- Click Save at the bottom of the screen to save your settings, or click Cancel to return to the Employee Edit window without applying these settings.
Setting up Custom Commission Tables
The Custom Commission Table is very similar to the "Standard" tables, but a bit more flexible. The table is organized into three "Tier" rows that designate different price ranges, and four columns for defining the values for each Tier.
The following is an example of setting up a custom table. This example assumes you have created an employee with a "Base "Pay of $100, a "Minimum revenue From Product Sales" of $200, and you have enabled the Products tab and the Custom Commission Table.
- For my "Tier 1" commission rate, I would like to give this employee 10% of the profits earned on products for the first $500 (also of profits earned). This means that between $0 and $500 (profit), this employee will earn 10% of that profit figure as commission.
- For this, enter (all on the Tier 1 row) 0.00 into the Low field, 500.00 into the High field, 0.10 into the Percent field and 0.00 into the Flat field.
- For my "Tier 2" setting, I would like to increase the commission rate to 15% for profits earned between the amounts of $501 and $1000. Since this is such a nice increase in the commission, I also want to charge a "flat" fee of $10 for this commission rate.
- For the Tier 2 row, make sure the Low field is set to 501.00. (MicroBiz should have set this for you, but you can change it to another figure like 500.99 if desired.) Enter 1000.00 into the High field, 0.15 into the Percent field and 10.00 into the Flat field.
- For my "Tier 3" setting, I want to set the commission rate to 20% for any profits higher than $1000. Keeping with my flat fee model above, I will charge a fee of $20 for this commission rate.
- For the Tier 3 row, make sure the Low field is set to 1001.00 (or 1000.99 if adjusting as before). The default of 999999.99 should already be set in the High field (if not, set it now). Enter 0.20 into the Percent field and 20.00 into the Flat field.
With the Commission Table set thusly, let's take a look at some Commission Reports based on various sales figures. Note that commission and sales/profit is calculated for the date range entered into the Commission Report window.
- Using the Custom Commission Table set up above, let's see why $100 commission is earned for our employee who generated $150 in profits.
- The employee did not generate more than the $200 set in the "Minimum Revenue…" field, so no commission based on profits was earned. The "Base Pay" of $100 will always be paid, regardless of any sales figures.
- If my employee generated $400 in profits, what will this custom commission pay?
- $400 is greater than the $200 minimum, so commission will definitely be calculated for the full $400 figure (the "Minimum Revenue" figure is not subtracted from the total). Because $400 falls in the "Tier 1" range, 10% of the $400 is paid, equaling $40. The Base Pay of $100 is also paid, so the total for this employee is $140.
- Let's see how much my employee will earn by generating $800 in profits.
- $800 falls into the "Tier 2" range, so we our report would show us 15% of the $800, or $120. Add on the Base Pay of $100 to get $220. Finally, subtract the flat fee for Tier 2 of $10 and the total commission earnings equal $210.
- Now we'll test "Tier 3" and see what my employee gets for bringing in $1500 in profits for this commission period. Remember, the commission period (and all calculations) are based on the date range that you enter into the Commission Reports in MicroBiz.
- 20% is paid for Tier 3 earnings, so that gives my employee $300. Add the $100 base and that brings it to $400. Take away the $20 fee and that totals $380.
- That's all there is to calculating commissions! Remember that you can make your commission tables much less complex if you like by removing the Minimum Revenue, Base Pay and/or Flat Fee settings, but these are included to show how simple the calculations are. Also note that the Commissions Reports do all of this for you, and show each step of the calculations on the screen.
Enter a filter if you want to set beginning and ending names for Time Clock entries.
Click on Filter while at the Employee Time Clock Window and this brings up the Employee Filter Window. Enter in the Starting Last Name and the Ending Last Name and click on OK to execute the search. You may also click on the Cancel button to exit the Filter Setup window.