Commission Schedules

Step 1:

The first step in setting up commission sales, is to create your commission schedules for the salon. From the menu, select Modules, then select Comm. Schedules.

The first tab, labeled Step 1, let's you create multiple commission schedules for your salon. When we edit the employee, you can assign commission schedules based on product or service sales, therefore, you may create as many commission schedules as you would like, to cover various payout scenarios. You can also create custom schedules for individual employees.

Let's walk through the process of setting up a commission schedule for product sales.
Click New, to start a new commission schedule.

Focus will change to the description field, and enter a description. You may want to use describe the schedule, for example, "10% on product sales". Next, select the computation method:

Fixed Commission Rate - select this option when computing commission sales as a fixed percentage of the pre-tax sale.

Variable - Based on Total Sales - select this option when you want to have a sliding scale percentage, based on volume of sales. For example, the employee could receive 10% for sales up to $500, and 15% for sales up to $100.

Fixed - Based on sale per hour - select this option, when you want to pay commission based on velocity, or sales by hour. For example, your employee could receive 10% commission if they sell $500 per hour.

Exception Schedule - selecting this option, allows you to create commission schedules on a per product basis. For example, you can give a bonus 5% for selling Aveda products, or promotional items.

For our example, we are going to select Fixed Commission Rate, and set it to 10%. Note: when entering in the percentage, you can enter 10, and it will convert the number to .1.

The next option is to elect how service charges are handled. This applies to products or services, that fit within the commission computations requirements. Items that do not contribute to the commission sales, are not included. You have the following options:

Deduct from Computed Commission - this option will total all service charges, and deduct from the commission total. Note: this option will not deduct the service charge, prior to calculating the commission percentage.
Deduct from Service Total before Computing Commission - this option will deduct the service charge, before calculating the percentage commission.
Do not Deduct - select this option to ignore service charges completely.

For our example, we are choosing to ignore service charges. Select Save to save our commission schedule. Note: The other tabs are for additional options based on the type of schedule you are creating. The application will not allow you to open these tabs, based on the type of schedule. After you save the schedule, you will see it appear in the list to the right.

Note: You can edit or change the options for the schedule, and the Update button will appear enabled. You can not change the schedule type after you create it. You can remove the schedule, and recreate it, if you need to change the type.

Step 2:

Now that you have created a commission schedule, the next step is to select which employees will be eligible for the commission schedule. We will also setup our employees for hourly, salary, or commission only, at this time.

Select Employees from the toolbar, then select the Payroll tab.

This tab allows you to setup your employees for hourly or salary wages, and to include them on a commission schedule. Note: you can set up an employee for only commission sales.

For you salary employees, you will enter the yearly salary. When you compute your payroll, it will ask the payroll period, and determine the salary amount, per pay period.

For hourly employees, you will enter the hourly rate. Note: the re-calc button will allow you to recalculate hourly time clock records, if you change the pay rate during a pay period. If you are giving the employee a raise, you would not recalculate the time clock records.

You have 4 sections to assign commission schedules. You can assign a schedule to Service sales, Product sales, items listed as Other, or Package sales. The inventory type, determines type difference between Product and Other sales.

Step 3:

Now that you have setup your employees, you will need to select which inventory and service items will be included for commission. When editing either a service or inventory item, there will be a check box to include this item in commission calculations.

Note: You can default all new inventory items to commission, from the Settings tab, under Customize. When you enable this option, it will prompt to set all inventory items to enabled. This will help you reset your inventory to include commission sales.

When your ready to process payroll, select Payroll from the Modules menu. See Payroll for more information regarding commission reports.