The commission module is designed to help users calculate commission accurately and efficiently, while allowing more flexibility on formulas utilized to produce commission results per company. Along with customized commission calculation plans, reporting and tracking are made easy.
- If this area is not visible to a service rep, users will need to grant the security role of "Commission Module" to appropriate service reps. Users must also have the related licensing and configurations setup before use. Please work with a Tempworks implementer for additional setup.
In this area, users will define a basic way to calculate burden for the purpose of calculating commission. Burden costs are costs associated with employees beyond payroll costs. Users will want to subtract burden costs from revenue before calculating commission.
Burden Type is the commission burden and is used to calculate payroll cost, which includes worker comp costs, employer taxes, etc. Users will then calculate commission on gross profit, which is billing-payroll-payroll cost. For example, a service rep will get a percentage of the gross profit after all costs are deducted.
Within administration you may add/ edit/ or delete burden type entries.
Navigate to (1.) all options (2.)administration(3.) commission (4.) burden type and select the + icon to add.
Enter the description of the burden, the burden amount you wish to have the system calculate, and the amount type. Select which level in the hierarchy these burden settings should be applicable for, whether that is for the entire company or on a branch basis.
Burden amount types can be calculated 3 ways:
1. Amount per hour- .20 cents per hour
2. Flat Amount- $ amount per transaction, $10 per timecard
3. Percentage- % of what you bill or of what you pay out, 5% of bill rate
*Note- Pay/Bill is only used for a % burden type
For example, if we select the burden type of percentage, and we calculate payroll costs, the percentage could be based off of % of pay or % of bill.
Trainers Tip- Keep in mind that burden is a cost of doing business that you want to deduct before calculating commission.
*Note- If you wish NOT to apply a burden type, users may select the "None" option in the burden type section.
Lastly, select which burden type will default into new customer records by toggling yes or no. Users will have the option to override this and apply it within individual orders or assignments if necessary.
E.g. Users charge a percent per customer, but a particular order will be based off of a flat $14.00/ hr burden.
For new customers, the default burden found within sales and services will be whichever burden type was marked as "Use as default for new customers" within administration. Select from the burden drop-down to update or change which burden type will be used on a customer by customer basis. This burden will be associated with new orders, but can be overridden within the individual order.
*Note- If users update the burden type on the customer record, it does not override the burden type for existing orders.
*Note- Users cannot set the burden type to Null, if a burden is not to be used for a specific customer users must select a none burden type within administration.
Once burden types have been added at the customer level, they will automatically default into the order. Users may still override the burden type on orders specifically within the details section. In the following example the heavy burden was applied initially to the order. You can select from the drop-down to attach a new burden type for the individual order. The burden type chosen within the order will default into new assignments for the order.
*Note- Updating the burden type on an order will not override burden types for existing assignments.
Within a given assignment the burden type defaults from the order. Initially, users may override the type used by selecting from the drop- down as shown.
Whatever burden type is chosen from the customer down to the assignment will get used as part of the formula to figure out the commission calculations.
A commission plan must be added for anyone who gets paid commission and best describes how to calculate commission for a particular service rep. The plan may contain one or more commission formulas, each of which specifies how to calculate commission for particular scenarios.
Users can create a new commission plan based on existing commission plan templates or create a new commission plan.
Navigate to all options (1.), administration (2.), commission (3.), commission plans (4.). To add a new plan per service rep, select the + icon (5.)
Enter the name of the commission plan (used later to find the plan) and select from the service rep drop-down which service rep this plan will belong to (who gets paid the commission).
Choose the start date you wish for this plan to take effect and enter an end date if this plan is only for a set period of time for a user. When a plan is no longer active, uncheck the active box to deactivate it. Users may delete the plan by selecting the x icon. If a commission plan is deleted, all of its child formulas will also be deleted.
*Note- Once a plan is in calculation, users may not delete the plan/formula that is being used, but may edit any information within the plan.
- Commission plans will need to be approved by the owner/manager to ensure that they review and agree with how the service rep will be paid commissions by selecting the thumbs up icon. Failure to approve the plan will result in uncalculated commissions.
Commission plan templates
A commission plan template can be created for convenience of creating commission plans and formulas that can be replicated and applied to multiple service reps who follow the same plan. Within the show drop down, select the Commission Plan Templates option (1.). To add a new template, select the + icon (2.)and enter the name of the new template. Lastly, enter the commission formulas (3.) you want this template to follow. Once the template is created you may now create commission plans based on that template, and each plan can be associated with a service rep.
Commission formula types represent the core logic behind calculating commission. Every commission formula must be part of exactly one commission plan. This is what will run when users click the calculate option within the commission calculation form. Commission formula types are also utilized when setting up specific formulas, including criteria to match (e.g. service rep, branch, sales vs. recruiter) when deciding which assignments to calculate commission for. Users may define just one formula, or define any number of formulas for different circumstances. There are four types, two of which are currently implemented.
Direct Hire- Calculates commission for direct hire assignments. Bill represents placement fees and both payroll and payroll costs are zero
Gross Margin Percent- Calculate commission against a % of gross margin. (Currently not implemented)
Net Revenue- Calculate commission directly against billing, without taking payroll or other costs into consideration. Does not include direct hire (Currently not implemented)
Weekly Gross Profit- Calculate commission against gross profit, which is obtained by subtracting total payroll and payroll costs from billing (this formula is most common)
*Note- Additional formula types can be added for your company, please work with implementation for setup.
Each commission formula type will have an associated pay cycle type that dictates the pay period or set of pay periods to be used when calculating commission. Users may select to have a weekly amount, every two weeks, quarterly, monthly, etc. to calculate commission. Calculations are then done only on that pay cycle range.
E.g. Users may only pay the service rep commissions every quarter.
*Note- By default pay cycle types are pre-populated in each database. Users will need to provide Tempworks with the pay cycle they wish to follow. Once provided Tempworks will configure this pay cycle.
Select either Sales, Recruiter, or Both. Users may select who gets the credit, whether the service rep in this commission plan is paid as sales person or recruiter, or both. This is matched against the credit types chosen in assignment allocations.
In the following example this service rep will get commission as a recruiter for the lifetime of those customers, due to no end date being populated.
Users may setup an "age" which is calculated as the number of days elapsed since the earliest weekend date for a posted transaction within time entry. This formula will be active whenever customers selected on the customers tab have an age between the start and end values (or older than the start value, if no end value).
E.g. For the first three years the service rep may receive a higher percent of commission for a customer, but as time elapses or the client coverts to a house account the commission percentage is reduced.
By default the system starts the customer age at 0, but can be changed, and end defaults to "no end", but can be specified. If an end date is applied, it must be greater than the start date.
Place a check mark within the requires invoice payment box if commission will only be calculated for transactions whose associated invoice has been paid in full. This will look at the final payment during weekend bill period for which commissions are being calculated.
Within the customers tab, users will select which customers this formula applies to. There are two main options for customer selection:
1. All customers box is not selected- Users will select one or more customers to include and must at least choose one option.
2. All customers is selected- With the list on the right empty, choosing this option will allow the formula to be applied to all customers and customers defined in the future.
Users may optionally exclude customers by adding them to the list on the right.
In the following example, this service rep will get commission for all customers except for Tesoro Refinery and Worley Persons.
Within the Earns for tab, users will select services reps that the formula "earns for", e.g. the reps who are listed in assignment allocations.
Earns For vs. Earns by
Earns by- The service rep who is paid the commission is the rep selected on the parent commission plan
Earns for tab- The rep or reps selected within this area are the reps associated with the assignments on which commission is calculated
E.g. The reps listed in the commission allocations for an assignment
Self only- In many cases the service rep getting the commission (earns by) will be the same as the service rep listed in the assignment (earns for). Selecting this option will automatically populate the earns for column with the single rep from the commission plan.
If the earns for reps are different from the earns by rep, users can remove the checkbox and add reps individually.
*Note- If formula indicates "Self Only" and the rep listed on the commission plan later changes, the rep listed in the earns for box will not automatically be changed
For example, you may have account managers at your office and a director/ boss of those account managers. Users may setup one formula for the director of account managers to receive a portion of the commission that his sales personal or account managers below him makes, and adds the team within the earns for section. If the director also gets commission for his own sales a second formula will need to be added.
Within the branches tab, users may select one or more branches to apply the formula to. This list is used to match against the branches listed in the commission allocations for an assignment. Selecting all branches will remove the available/ included list and apply the formula to all branches. If all branches is not selected users can select specific branches that the formula should apply to.
Within the tiers tab, users will apply a percent in a tier to that portion of the commission input value that falls within that tier. A formula must have at least one tier, and each tier unit must be >= 0 and rate must be > 0%.
The unit input depends on the logic in the actual formula. For example, units would be a monetary value because gross profit amounts are also monetary. The rate columns is always a % and represents the % of the input value that will be paid out.
- Units cannot be duplicated
The rate will apply if the input value is >= the unit and < unit value at the next tier. In the following example, if the input value is >= 0 and > 250 than the 2% rate will apply. If the input value is >= 250 and <900 than the 3% rate will apply. If the input value is >=900 than apply the 4% rate.
For example if we had an employee who was paid off of a $1,000.00 using the above tiers the breakout for total commission given to the service rep would look as such:
|2% of $250.00 (250*.02)||3% of 650 (650*.03%)||4% of 100 (100*.04%)|
|Earn $5.00||Earn 19.50||Earn $4.00|
In total, the service rep would earn $28.50 of commission from the $1,000.00 based off of the tier setup.
After users have added one or more formulas to a commission plan, the formulas are displayed in a read-only format on the commission plan form. Each formula may still be edited by selecting the pencil icon. If you select to edit the commission formula, the edit commission formula box will populate. Select the x icon if you wish to delete the formula within the plan.
For each assignment, users will add one or more assignment allocation entries. Doing this will dictate which service rep(s) get commissions for the assignment. The default assignment allocations come either from the customer for this assignment, or the associated branch. Default assignment allocations will populate in the assignment if created at the customer level, but can be overridden on the individual assignment.
E.g. Users may setup defaults at the customer level for light industrial orders with hundreds of assignments and setup parameters that break out commission allocations. The service rep who interviewed the candidates get a percentage, the account manager gets a percent of commission, and the sales person receives a cut as well.
Each assignment allocation setup will need to specify:
- Service Rep- The rep(s) that will get paid commission for this assignment
- Branch- The branch associated with the commission payment
- Credit Type- The type of credit being applied, sales vs. recruiter
- Commission base percentage- Percent of the calculated commission that the service rep will get
You can set one or more assignment allocation default entries for commission at the customer level or for a specific department. Navigate to the customer record (1.), defaults(2.), assignment allocations (3.).
To define defaults for a particular department, users must select the use customer specific settings (1.). If this option is not checked, defaults used for this department will come from the parent customer. With this option checked, you can add an assignment allocation default entry by selecting the +icon (2.).
Within the default assignment allocations window enter the credit type :
Select order owner- (Sales)
Select Employee owner (Recruiter)
Select from the branch drop-down to define the branch from either the assignment, current rep, customer, employee or order
From the srident source drop-down select from current rep (service rep logged in), customer account manager, employee interviewed by, employee staffing specialist, or order taken by
Lastly, set a default base percentage
Once the assignment allocation defaults are setup users may have them default into the departments under the current customer, select the apply default allocations to departments checkbox. By default, a child department will inherit the parent customer defaults if this box is checked. To setup department specific defaults, check the user customer specific settings checkbox in the child department.
Default assignment allocations populate either from the customer or branch settings. Users may override those settings within a given assignment by navigating to assignment (1.), details (2.), commission allocations (3.). Users may also setup additional allocations by selecting the + icon and entering the necessary information.
Enter the service rep, branch, credit type and commission base percentage. Base percentages do not need to equal 100%.
*Note- Credit type is populated with a pre-defined list, each has as default commission base percentage that users can change after picking the credit type. Each defined type is marked as either sales or recruiter which was selected when creating commission formulas.
In the following example, Alex receives 100% of the calculated commission as the order owner, Erika receives 25% and Andym receives 30% of the commission for employee owner.
You can set assignment allocation defaults at the branch level. These can be used when creating new assignments if no customer defaults are setup.
Navigate to all options (1.), administration, branch (2.), select branch (3.), commission defaults (4.). Select the + icon to add default assignment allocation information. If you need assistance on how to setup allocation information, please navigate to default assignment allocations.
With commission allocations on the assignments in place, and commission plan formulas defined, users will be able to calculate commission data.
Navigate to pay/bill (1.) ,other (2.), commission calculation (3.).
Once in the commission calculation section users will calculate commission data by specifying formula type and a single pay period:
For example, users can select to calculate commission for all formulas that use weekly gross profit formula type and for a pay period of pay weekend date of 6/5/2016. The pay weekend column indicates when users want the system to allow to actually pay commissions.
*Note- The pay period drop-down will only show pay cycles prior to the current open week and goes back only four months
Once the calculate button is selected, commission will be calculated by finding commission formulas that fit the commission allocations for assignments having transactions that fall within that specified pay period. Users will see all service reps who should be paid commission within the commission results area.
After users select a formula type and pay period, if commission has already been calculated for this combination of values, entries will appear in the commission results area. In the following example, users have already calculated commission for Dom:
If users need to recalculate commission for service reps listed within this field, users must delete the earlier commission results by highlighting the entry and selecting the x icon. Users may go back and change something in the commission plan and re-calculate commission if necessary.
Transactions that will be compared against commission formulas include:
1.Regular transactions that had a weekend bill date in the selected range
2. Parent transactions for invoices whose final payment was in an AR posting batch that had a weekend bill date in the selected range.
Transactions may also be matched against formulas whose requires invoice payment field was set to true.
*Note- All weeks in the listed pay periods must be closed out before doing a calculation
Two reports have been added to support and track the commission module:
Utilize this report for service reps to see commission details for all commissions that they are paid
Administrators/ Managers will run this report for a detailed look into who received commissions. Users may select a myriad of information to review calculated commission data for each transaction, and dive into each service reps commission results