How to Track Commission Sales Rep

Simply Accounting – How to Track Commission Sales Reps

1. From where do I generate proposals when I am asked to give a quote to a sales agent?

In order for the quotes or orders to work you must have your inventory setup?  Click on sales orders and quotes, at the top of the screen you will see “transactions” drop down the menu and you have three choices Sales, orders and quotes.  Pick quotes and create it for your customer.  At the bottom of the screen you will “record” not “post” this entry will not be posted until it is created into an invoice.  The system will issue a quote number that you can retrieve one your ready to convert to an invoice.  Remember to create your inventory items first.

2. How, then, from the proposal/quotation does it become a Sales Order then Invoice?

Once the customer agrees to the quote and you have shipped the product.  Click on Sales, orders, quotes again and this time under “transaction” choose invoice and pick the quote number you want to invoice.  On the screen you will see the product and at the bottom you can post this entry into the general ledger.

3. How does the software automatically calculate sales commission for both the agency and Dave Harding?
In my last email I said you can track sales reps by setting them up as employees.  Well, you can also set them up as projects.  Each time you invoice a customer allocate that sale to a Mr.X who is set up in projects.  At the end of the month you can print each project Mr.x, Mr.Y and so on and see exactly how much each sales rep has sold and to whom. You can than set up Dave the same way. To allocate the sales reps to each project, in the body of customer invoice screen you will have the word “allo” meaning allocation.  Click in that and a list of your sales reps will appear. But first set each sales rep up under projects.
4. Dave explained that at the end of each week, I can simply press a key and it will prepare all of the commission checks and print them off quite seamlessly. How does it do this?

Yes, at the end of each week you can simply press a button and get a report on how much sales they made. You need to first calculate how much commission each one has earned before paying them and that is tracked in projects.  Under reports – projects-income you can get a sales report.  From that report you can generate how much commission each rep as earned and set each rep up as a vendor in purchases journal and post the amount and print their checks.

5. On a related subject, how does it know that the customer has paid the invoice so that they are eligible to receive their commission?

Who ever is doing the bookkeeping should be on top of that. The flow should be recording the quotes which are turned into an invoice and when the payment is received will post the payment against that invoice.

7. Is there a way to integrate Dave’s system with mine so he can see the quotes that I have given and I can see what quotes they have given?
I believe simply accounting has a remote service. But you have to set that up with them.  Call them at 866-665-2559 and ask what services you can implement via internet.

Clever ways to save taxes

Operating a business is tough enough without having to pay more than your fair share of taxes.  Some tax-cutting strategies for small businesses.

Making interest a tax deductible:

Complicated new rules surrounded the detectability of interest, but the basic rule still remains the same:  To deduct the interest on a loan, the loan must be taken out for business purposes. So, if you have a personal loan ( which the interest is non-deductible), you might pay it off with funds from your business, then take out the equivalent amount as a business loan (on which the interest is deductible).  Similarly, in cases where you have concurrent business and personal loans, dedicate available funds to paying off your personal debts.

Save on Family EI: 

Many small business owners know the tax benefits of paying salaries to family members.  However, they often forget the rules on employment insurance premiums on those salaries. In some cases, family members would not be eligible to collect EI if they lost their jobs.  If they can’t collect EI, why pay the EI premiums every month to the government?  This can mean EI savings for the business.

Deduct All Business Expenses:

This sound obvious, but many business owners fail to deduct all the business expenses, fearing those costs will be disallowed because the business fails the “Reasonable Expectation of Profit”  However, recent decisions by the Supreme Court of Canada have forced Ottawa to change its thoughts concerning REOP.  As long as there is no personal element to your business, your business losses are tax deductible.

Recognize Capital Items From Expense Items:

Treating a capital addition as an expense could expose you to additional tax. Example: if you purchase a hand held saw for $200. this should be categorized as a tool expense not capital asset.  On the other hand, if you purchase a manufacturing building and have to renovate, the cost associated with the renovation should be set up as capital asset and  added to the original cost of the building.

Incorporate – Maybe Not Yet?

Under the right circumstances, incorporation  can save you money.  Under the wrong circumstances it will only cost you money and administrative costs.  To Know when to incorporate, ask yourself this simply question:  “Can I personally afford to leave some of my company’s profits in the business, thus deferring that income?” If the answer is yes, then incorporation may be for you. As a sole proprietorship any amount the owner withdraws from the business for personal use is not deamed as taxable income, only the net income (income – expenses = net income) of the business is subject to tax.   when you are incorporated you become the employee of the business, therefore you are subject to payroll taxes (not including EI)