*This post was written for Dynamics NAV but the content directly applies to Dynamics 365 for Financials, which is the cloud product based on Dynamics NAV. You may notice some slight differences in the screenshots, but the information and steps are directly applicable to Dynamics 365 for Financials.
Many of our customers calculate commissions within Dynamics NAV, but over the years I’ve noticed that no two customers ever seem to handle the calculation and reporting in the same way.
Before selecting a commission solution, consider the following questions:
- Do you calculate commissions off of sales or margin?
- Are commissions considered payable at the point of the sale or only when payment has been received from the customer?
- Are partial commission payments required when the customer pays only a portion of the invoice’s amount?
- Can a given salesperson have more than one commission percentage depending on sales or margin thresholds?
- Can a salesperson receive different commission percentage based on what was sold or who was sold to?
- Does your company’s commission calculation process require exceptions and adjustments?
If your answer to any of the questions above was “yes,” then NAV’s out of the box commission report probably isn’t for you. NAV’s “Salesperson Commission” report is ideal for calculating commissions if you are using a single commission rate (per salesperson) and want to calculate commission based on overall sales. The report will also calculate margin based commissions, however that feature can be less useful in a FIFO environment where costs can adjust after the sales transaction is recorded, thus margin becomes a moving target that this report doesn’t track.
Alternatives to using NAV’s “Salesperson Commission” report include:
1. Design a custom solution. We’ve designed custom solutions with many of our customers and often find that a company sometimes isn’t exactly sure how or why their current commission process came into existence. When building a solution from the ground up, it’s imperative that the commission requirements/rules are identified and agreed upon before initiating the development stage with your NAV partner.
2. Purchase an ISV add-on. There are many ISV solutions that offer commission calculation, reporting, and payment features. Most of these solutions add a new commission ledger table which allows for a more user-friendly way of tracking and reporting on commission data. It should be noted that, with an ISV solution, you may have to bend your requirements a bit depending on the design of the solution you select.
3. Maintaining commission outside of NAV. In some cases, a company’s commission calculation process contains so many exceptions, adjustments, and factors that reside outside of their ERP software, they are best maintained outside of the accounting system.
Please feel free to contact one of our NAV professionals at Stoneridge if you’d like to discuss your particular commission reporting needs.