Setting up Commissions in Microsoft Dynamics AX 2012
Posted on: December 10, 2015 | By: Jarrod Kraemer | Microsoft Dynamics AX/365
Seeing that it is already December, many of you are probably looking towards the New Year and what Q1 has in store for you and your company. Q1 can be a time to start fresh and improve from your previous year. In order to get off to a fast start and motivate your sales team to generate new business, you may not need to look anywhere else other than this blog! Energize your business and incentivize your employees with new commission structures by utilizing out of the box functionality in Microsoft Dynamics AX. The commission setup is flexible and allows for creativity so your company can get off to a hot start in 2016.
There are a number of moving pieces that are eventually combined together to complete what AX calls the commission calculation. We will break down each step needed to compile a commission calculation, form by form, and then explain how they collaborate to create a commission calculation.
First, go to the address Sales and marketing>Setup>Commissions
The initial steps will require us to complete the setup for the three bottom groups: Customer groups for commission, Item groups, and Sales groups. Let’s start with customer groups for commission.
Clicking on that link will bring up this form below. This form will determine how you categorize customers that your salesperson(s) can receive commission on. The groups and their names are user defined fields, so feel free to be as creative as you want when coming up with these groups.
The commission customer group can be selected in the drop down field shown below in the Sales order defaults fast tab of the Customer record. A commission group must be selected in order for the commission to be calculated on a sales order.
We are going to skip Item groups for a moment and go to the sales group form, which is shown below. This form offers you the opportunity for more user-defined fields to create your sales groups. You have the pick from all AX users to help you define your sales groups.
Click the Sales rep. link to open up this form below. In this form, you determine which users are part of each sales group. In addition to selecting each user, you can also determine their share of the commission. Select as little or as many users as you want.
To assign a certain sales group, go to the customer record and click on the Sales order default fast tab (same place you went for the commission customer group). In the sales group field, you can select your commission sales group applicable to this customer. This step must be completed in order for all the pieces of the commission calculation to function.
Next, click on Item groups from the location Sales and marketing>Setup>Commissions. The Item groups form below will allow you to create user-defined fields on groups of items you want your salesperson(s) to earn commission on (very similar to the customer groups). The only difference is where you assign these groups.
Travel to the address Product Information management>Common>Released Products. Choose a specific product you would like your team to earn commission on and go to the Sell fast tab on that product. Under the Administration section you can select the item group that you created previously. Again, a commission group must be selected in order for the commission to be calculated on a sales order.
We finally have all the necessary pieces setup and assigned to create a commission calculation. Go to the address Sales and marketing>Setup>Commissions>Commission calculation, it will bring up this form below. Using the previous three forms, you can create a number of different commission calculations. First and foremost, determine which item(s) you would like commission to be earned when that item(s) sells. The item code Table will let you select only one item, Group is allows you to select an item group (which we just created), and All is obviously all items. In the customer code drop down, Table allows you to select an individual customer, Group allows you to select a commission custom group (previously created), and All is obviously all groups. For the Sales rep. code you can only select Group, or a commission sales group (previously created) or All, which would just be all sales rep. groups.
In the Commission based on section, you can determine how the commission is applied given the sales order, factoring in discounts, on revenue or on margin, and the percentage of commission received from a given sales order. Please note that this is a different form than the commission share in the commission sales groups. For example, if you had 10% for the commission percentage on a sales order with revenue of $1,000, the commission would be $100. That $100 would be split based on the percentages defined by the commission sales group. So if each sales rep. had a 20% share and there were five sales representatives, they would each earn $20.
In order to view this breakdown on a sales order, click the invoice tab on the specified sales order and then select Invoice Journals, which will open up a new form. In that new form, select Commission and click Commission transactions.
In the Period section, you can make these calculations date sensitive so that they are only applied within a given time frame.
One last thing, do not forget to setup which ledger accounts these commissions will post to in Sales and marketing>Setup>Commissions>Commission posting. Be sure to choose a main account for both the commission and commission offset.
The commission functionality in AX allows you to quickly and effectively motivate your salespersons to offer creative compensation. You can also drive sales to certain customers and items with this functionality.
For additional information please feel free to reach out to us at email@example.com or (312) 345-8817.
All the best!
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