Managing commissions in Epicor Prophet 21 (P21) requires a thorough understanding of system settings, user permissions, and effective setup of commission rules and schedules. Here are the best practices recommended by Scaled Solutions Group, with detailed examples:

Preparation and Setup

Understand Requirements:

• Define the basis for commissions: gross sales, profit dollars, or profit percentage.
  • Example: If commissions are based on profit percentage, set thresholds to ensure sales reps meet specific profit margins to earn commissions.

System Settings:

• Configure cost sources under system settings in order processing.
  • Example: Choose Standard Cost for fixed commission calculations, Moving Average for time-based average costs, or Order Cost for real-time order costs.

User Permissions:

• Control visibility of cost information in user maintenance.
  • Example: Restrict sales reps from seeing moving average costs if not necessary.

Commission Rules and Schedules

Commission Defaults:

• Set baseline settings in accounting commissions.
  • Example: Default to profit dollars for commission calculations, ensuring fairness and accuracy.

Commission Rules:

• Create specific rules for different scenarios, such as new customers or product groups.
  • Example: Offer a 5% higher commission for sales to new customers to incentivize acquisition.

Commission Schedules:

• Attach rules to schedules and determine if they apply to entire invoices or specific line items.
  • Example: Prioritize new customer sales in the schedule to ensure they receive higher commissions first.

Calculating and Reviewing Commissions

Transaction Calculation:

• Use accounting commissions to calculate commissions by specifying period, year, or date range.
  • Example: Calculate Q1 commissions by setting the date range from January 1 to March 31.

Review and Edit:

• Validate and adjust calculated commissions before finalizing.
  • Example: If a sales rep’s commission seems incorrect, review and adjust the rules and schedules applied.

Handling Special Cases and Scenarios

Direct Ship vs. Non-Direct:

• Ensure accurate differentiation between direct ship and non-direct orders.
  • Example: Apply higher commissions to direct ship orders due to reduced handling.

Order Entry Editing:

• Allow sales reps to edit commission splits at the line item level.
  • Example: Split commissions for collaborative sales between multiple reps at the line item level.

Additional Considerations

Cash Receipts:

• Prefer commissions based on cash receipts to ensure payment post-sales.
  • Example: Calculate commissions only after the invoice is fully paid.

Commission Cutoffs:

• Implement forfeiture percentages for overdue invoices.
  • Example: Reduce commissions by 10% if an invoice is 30 days past due, and forfeit 100% if 90 days past due.

Following these best practices, recommended by Scaled Solutions Group, ensures efficient and fair commission management in Epicor Prophet 21, enhancing accuracy and incentivizing performance effectively.