Microsoft Dynamics® AX 2012 Sales
Commission
Sales commissions are used to compensate salespeople for the sales effort that they provide to a
company. Companies require the ability to apply various types of sales commission arrangements,
such as straight commission and salary plus commission. Each commission arrangement must comply
with company compensation and behavioral policy and must be modeled such that it provides good
incentive for the salesperson and promotes behavior compliant with company strategy.
Microsoft Dynamics AX 2012 Sales Commission supports companies in this effort by enabling various
sales commission arrangements from straight commission to salary plus commission. As examples of
such arrangements, sales commissions can be calculated on an agreed-upon percentage of the
revenue brought in by a sale or on the contribution margin brought in by a sale.
Defining sales commission arrangements within Microsoft Dynamics AX 2012 is at the discretion of
the individual company.
SALES COMMISSION PROCESS
Sales commissions in Microsoft Dynamics AX 2012 are calculated on the basis of invoiced
sales order lines. When a sales order line is invoiced, it is automatically checked to
determine whether valid sales commission arrangements exist. If so, the sales commission
is calculated on the basis of these. However, Microsoft Dynamics AX 2012 also
automatically checks whether valid sales commission arrangements exist when credit
notes are issued. This ensures that the net sales commission calculated for a salesperson
correctly reflects the net contribution that the salesperson has provided to the company.
After the calculation of sales commission for invoiced sales order lines, the sales
commission amount is posted to a company-designated ledger liabilities account for sales
commissions. This allows for flexible integration to payroll.
SALES COMMISSION ARRANGEMENTS
Microsoft Dynamics AX 2012 offers a high degree of flexibility in defining sales
commission arrangements. The basic components within the definition of a sales
commission arrangement are the product, the customer, the salesperson, and the
relationship between these.
Microsoft Dynamics AX 2012 Sales Commission offers the following flexibility:
Customers – You can define a sales commission arrangement for a group of
customers, for a specific customer, or for all customers.
Products – You can define a sales commission arrangement for a group of products,
for a specific product, or for all products.
Salespersons – You can define a sales commission arrangement for a group of
salespersons or all salespersons, and apply a commission split among the individual
salespersons within the specific group of salespersons.
Once the product, customer, or salesperson relationship has been defined for a specific
sales commission arrangement, Microsoft Dynamics AX 2012 provides the following
capabilities in defining the commission calculation to apply for the sales commission
arrangement:
You can define the commission calculation basis. You can calculate the sales
commission before or after discounts granted for an invoiced sales order line, and
calculate sales commission on the basis of revenue or contribution margin.
You can define the actual sales commission percentage to apply.
You can define the validity period for the sales commission arrangement.
It is common that companies require that multiple sales commission arrangements be
active within the same time period, and that multiple sales commission arrangements
should be applied for an invoiced sales order line. In order to meet this requirement,
Microsoft Dynamics AX 2012 Sales Commission provides support for multi-level sales
commission calculations. For each sales commission arrangement, you can define whether
Microsoft Dynamics AX 2012 should search for additional eligible sales commission
arrangements when a sales order line is invoiced, or whether this sales commission
arrangement is the last arrangement to be applied to the invoiced sales order line.
Overall, Microsoft Dynamics AX 2012 Sales Commission provides for flexible definition of
sales commission arrangements, allowing companies to encourage salesperson behavior
that is compliant with company strategy and to compensate salespersons accordingly.
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence.
Microsoft Dynamics works like and with familiar Microsoft software, automating and streamlining financial, customer relationship and supply chain processes in a way that
helps you drive business success.
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