Background: Sales Commission Hierarchy Maintenance

Use the Sales Commission Hierarchy Maintenance (SCHM) program to:

• Set up and change the sales rep hierarchy that determines how sales reps are assigned to a sales order or line.

• Set up and change the commission rate hierarchy that determines which commission rates apply to a sales order or line.

See Road Map for work flow.

This topic has these subtopics:

Why Set Up Hierarchies
Sales Rep Hierarchy
Commission Rate Hierarchy
Commission Routine

Why Set Up Hierarchies

If you assign one sales rep per customer, you can do so in the Customer Maintenance (CM) and Customer Ship-to Maintenance (CSM) programs and do not need to set up a sales rep hierarchy. However, if you also pay a sales manager, product manager, or support person a commission, you need to set up a sales rep assignment hierarchy.

If you pay a standard rate for all orders, you can enter that rate in the Commission rate field in each rep's record in the Sales Rep Maintenance (SM) program and do not need to set up a rate hierarchy. However, if you vary the rate, you need to set up a commission rate hierarchy.

Sales Rep Hierarchy

The sales rep hierarchy determines how the Sales Order Maintenance (OE), EDI/Sales Quote Maintenance (QOE), and One Step Invoice Entry (RE) programs find sales reps and commission splits for a customer or for an item on an order line. Sales reps can be anyone you pay commission based on sales, not just your outside sales reps.

The hierarchy can have one or many levels. Each level identifies a customer and/or item group to which you want to assign sales reps. If you selected the Enable commission rates per line? option in the System Options Maintenance (XM) program (Sales Commission Options), selecting an item group is appropriate. If you did not select this option, reps are assigned to the sales order header. In that case you should select from the customer group rather than the item group.

Hierarchy levels determine the order in which the order processing programs check for sales reps. The programs begin searching at the top level of the hierarchy (the lowest numbered level). If there is no match, the program continues searching to the next level of the hierarchy (the next highest numbered level). Therefore, you should place specific types (for example, customer or item) in the top levels of the hierarchy and more general types (for example, customer type or product class) in the bottom levels.

Before you select a customer or item group, be sure that you know where to set up and assign codes for that type:

Group	Commission type	Set up codes with	Assign a code in
Customer	Customer	Customer Maintenance (CM)
	Customer type	Customer Types Maintenance (TYM)	Customer Maintenance (CM); Customer Ship-to Maintenance (CSM) can override
	Customer price class	Customer Price Classes Maintenance (TCPC)	Customer Maintenance (CM)
	Customer commission class	Commission Class Maintenance (TCCM)	Customer Maintenance (CM); Customer Ship-to Maintenance (CSM) can override
	Customer sales region	Sales Region Maintenance (TSR)	Customer Maintenance (CM); Customer Ship-to Maintenance (CSM) can override
Item	Item	Enterprise Item Maintenance (IM) and Branch Item Maintenance (IMB)
	Product class	Product Class Codes Maintenance (TPC)	Enterprise Item Maintenance (IM)
	Product subclass	Product Subclass Codes Maintenance (TSP)	Enterprise Item Maintenance (IM); Branch Item Maintenance (IMB) can override
	Item price class	Item Price Classes Maintenance (TIPC)	Branch Item Maintenance (IMB)
	Item commission class	Commission Class Maintenance (TCCM)	Enterprise Item Maintenance (IM); Branch Item Maintenance (IMB) can override

Example 1

If you assign the same reps to all customers in a geographic region, select sales region. If you there are any exceptions, your hierarchy might look like this:

Level	Commission type	Assigns sales reps for
10	CUSTOMER	A specific customer
20	CUST SLS REGION	All customers in a sales region

After you set up a hierarchy, you need to enter records for each level of the hierarchy in the Sales Rep Assignment (SRAM) program. In this example, you would enter these records:

Level	Commission type	Enter records for
10	CUSTOMER	Any customer that has multiple reps that are different from than those assigned to the region
20	CUST SLS REGION	Each sales region

When you enter a sales order, the system checks whether a record exists for the customer. If not, the system assigns the reps for the customer's region.

Example 2

If sales reps sell items to a type of customers (for example, domestic, international, government or distributor, wholesaler, retailer), select customer type. Your hierarchy might look like this:

Level	Commission type	Assigns sales reps for
10	CUST TYPE	All customers of a type
20	CUSTOMER	A specific customer

After you set up a hierarchy, you need to enter records for each level of the hierarchy in the Sales Rep Assignment (SRAM) program. In this example, you would enter these records:

Level	Commission type	Enter records for
10	CUST TYPE	Each customer type
20	CUSTOMER	Each customer not in a customer type for which you want to assign multiple sales reps

When you enter a sales order, the system checks whether customer is in a defined type. If not, the system checks whether a record exists for the customer.

Example 3

If sales reps sell a product line, select item commission class, product class, subclass, or item price class. Your hierarchy might look like this:

Level	Commission type	Assigns sales reps for
10	ITEM COMM CLASS	All items in an item commission class
20	CUST SLS REGION	All customers in a sales region

After you set up a hierarchy, you need to enter records for each level of the hierarchy in the Sales Rep Assignment (SRAM) program. In this example, you would enter these records:

Level	Commission type	Enter records for
10	ITEM COMM CLASS	Each item commission class
20	CUST SLS REGION	Each sales region

When you enter a sales order, the system checks whether item has a item commission class. If not, the system assigns the reps for the customer's region.

If the system finds no sales rep in any level of the hierarchy, order processing programs retrieve the sales rep for the customer's ship-to address from the Customer Ship-to Maintenance (CSM) program. If the order does not have a ship-to address, the programs obtain the sales rep from the Customer Maintenance (CM) program. Even if the programs find sales reps in the hierarchy, you can change these sales reps and associated commission splits during order entry.

If you are developing a new plan for sales rep assignment, you should place that plan at the bottom of your hierarchy until you are ready to implement it. That way you can build the plan without affecting current sales rep assignments. After you have assigned sales reps for the new levels you need for this plan, you can change your hierarchy and begin using the new sales rep assignments. If you want level 40 to become level 10, click Add, enter 5 as the level, select the same customer and/or item group as level 40, and click OK. Delete level 40. When you exit and click Rep assignment, the program renumbers the levels for you.

Commission Rate Hierarchy

The commission rate hierarchy determines how the commission routine finds rates for the sales rep(s) assigned to an order.

The hierarchy can have one or many levels. Each level identifies a sales rep, customer, and/or item group to which you want to assign rates. If you selected the Enable commission rates per line? option in the System Options Maintenance (XM) program (Sales Commission Options), selecting an item group is appropriate. If you did not select this option, rates are assigned to the sales order header. You should select from the sales rep and/or customer group rather than the item group.

Hierarchy levels determine the order in which the commission routine programs check for rates. The routine begins searching at the top level of the hierarchy (the lowest numbered level). If there is no match, the routine continues searching to the next level of the hierarchy (the next highest numbered level). Therefore, you should place specific types (for example, customer or item) in the top levels of the hierarchy and more general types (for example, customer type or product class) in the bottom levels.

Before you select a customer or item group, be sure that you know where to set up and assign codes for that type:

Group	Commission type	Set up codes with	Assign a code in
Sales rep	Sales rep	Sales Rep Maintenance (SM)
	Sales rep type	Sales Rep Type Maintenance (TSTM)	Sales Rep Maintenance (SM)
Customer	Customer	Customer Maintenance (CM)
	Customer type	Customer Types Maintenance (TYM)	Customer Maintenance (CM); Customer Ship-to Maintenance (CSM) can override
	Customer price class	Customer Price Classes Maintenance (TCPC)	Customer Maintenance (CM)
	Customer commission class	Commission Class Maintenance (TCCM)	Customer Maintenance (CM); Customer Ship-to Maintenance (CSM) can override
	Customer sales region	Sales Region Maintenance (TSR)	Customer Maintenance (CM); Customer Ship-to Maintenance (CSM) can override
Item	Item	Enterprise Item Maintenance (IM) and Branch Item Maintenance (IMB)
	Product class	Product Class Codes Maintenance (TPC)	Enterprise Item Maintenance (IM)
	Product subclass	Product Subclass Codes Maintenance (TSP)	Enterprise Item Maintenance (IM); Branch Item Maintenance (IMB) can override
	Item price class	Item Price Classes Maintenance (TIPC)	Branch Item Maintenance (IMB)
	Item commission class	Commission Class Maintenance (TCCM)	Enterprise Item Maintenance (IM); Branch Item Maintenance (IMB) can override

Example 1

If you pay the same rate regardless of the item sold but the rate is different for certain customer types, select customer type, price class, or commission class. Your hierarchy might look like this:

Level	Commission type	Assigns sales reps for
10	CUST TYPE	All customers in a customer type

After you set up a hierarchy, you need to enter records for each level of the hierarchy in the Sales Rep Assignment (SRAM) program. In this example, you would enter these records:

Level	Commission type	Enter records for
10	CUST TYPE	Each customer type

When you enter a sales order, the routine checks whether a rate record exists for the customer's type.

Example 2

If you pay a different rates to each type of rep (for example, outside sales, telemarketing, or sales manager), select sales rep type. Your hierarchy might look like this:

Level	Commission type	Assigns sales reps for
10	SALES REP TYPE / CUST TYPE	All reps of a specific type who make sales to a customer type

After you set up a hierarchy, you need to enter records for each level of the hierarchy in the Sales Rep Assignment (SRAM) program. In this example, you would enter these records:

Level	Commission type	Enter records for
10	SALES REP TYPE / CUST TYPE	Each sales rep and customer type combination

When you enter a sales order, the routine checks whether a rate record exists for the sales rep's type and the customer's type.

Example 3

If you pay different rates based on the type of item sold, select commission class, product class, product subclass, or item price class. Your hierarchy might look like this:

Level	Commission type	Assigns sales reps for
10	SALES REP TYPE / ITEM COMM CLASS	All reps of a specific type who make sales of an item type
20	SALES REP TYPE / CUST TYPE	All reps of a specific type who make sales to a customer type

After you set up a hierarchy, you need to enter records for each level of the hierarchy in the Sales Rep Assignment (SRAM) program. In this example, you would enter these records:

Level	Commission type	Enter records for
10	SALES REP TYPE / ITEM COMM CLASS	Each sales rep type and item type combination
20	SALES REP TYPE / CUST TYPE	Each sales rep type and customer type combination

When you enter a sales order, the routine checks whether a rate record exists for the sales rep's type and the item's type.

If the routine finds no match in any level of the hierarchy, or if the routine finds a commission rate of zero, the routine applies the commission rate from the sales rep's record in the Sales Rep Maintenance (SM) program.

If you are developing a new rate plan, you should place new levels at the bottom of your hierarchy until you are ready to implement it. That way you can build the plan without affecting current commission rates. After you have entered the commission rate records for the new levels of your plan, you can change your hierarchy and begin using the new rates. If you want level 40 to become level 10, click Add, enter 5 as the level, select the same sales rep, customer, and/or item group as level 40, and click OK. Delete level 40. When you exit and click Commission rates, the program renumbers the levels for you.

Commission Routine

The commission routine searches for a commission rate in this order:

1. The routine obtains this information from the sales order when you run the AR Invoice Register (RR) program:

Sales order number
Customer number for the sales order
Item number for the sales order lines
Sales reps and splits (up to 4 of each) for the sales order or each sales order line*
Gross amount for the sales order or each sales order line*
Net amount for the sales order or each sales order line*
Taxes for the sales order or each sales order line*
Freight for the sales order
Miscellaneous charges for the sales order
Discounts for the sales order or each sales order line*
Terms discounts for the sales order
Date the sales order items were shipped
Whether the item on the sales order line is not subject to commission

* If the Enable commission rates per line? option in the System Options Maintenance (XM) program (Sales Commission Options) is selected, the routine obtains sales order line information. If this option is not selected, the routine obtains the sales order total.

AR adjustments for the sales order

2. The routine obtains this information from the customer's record in the Customer Maintenance (CM) program:

Customer type
Customer price class
Customer commission class

3. The routine obtains this information from the item's record in the Enterprise Item Maintenance (IM) or Branch Item Maintenance (IMB) program:

Item price class
Product class
Product subclass
Item commission class

4. The routine obtains this information from the sales rep's record in the Sales Rep Maintenance (SM) program:

Rep type
Commission type

5. Using the data obtained from the preceding steps, the routine creates a commission record for the order.

6. The routine reads the commission rate hierarchy to obtain a commission rate and/or flat amount for each sales rep on the order header or order line.

7. If the routine finds no commission rate or a commission rate of zero, the routine obtains this information from the sales rep's record in the Sales Rep Maintenance (SM) program:

Commission rate

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