Getting paid is only part of the objective, the REAL goal is to maximize the "in come" and minimize the "out go". Easy? Oh sure, just keep your eye on both sides of the coin at all times!
Pay everyone their "fair" share and not a penny more -
I recently went through an exercise, actually I didn't do much more than talk, they did the work, concerning the source of income to determine how much of Commission payments received were exempt from local business tax. I don't know if this will apply to all taxing authorities, you'll have to check with your accountant or tax advisor to determine whether this is of any benefit to you. Commission payment for shipments to Customers located outside of the tax area might be exempt.
The Mfgr Payments Received by Zip-Code (59.01L) report provided the numbers, the problem was establishing income by calendar quarter. I do get to take a little of the heat here.
There are two dates associated with the Manufacturer Commission Statement:
I think the rule-of-thumb here is "make the dates reflect when it actually happened".
- Statement Date - This should be entered as the date on which payment was received, which is the date on which the income must be declared for tax purposes. I had always said, use any "meaningful" date here-WRONG-use the date on which the check is received so it will properly identify the period in which the income was received.
- Rep Payment Date - This is the date on which payment is made to the appropriate Reps. I'm now hesitant to sing my "use a meaningful date" song anymore. I think now the date used should be the date on which the payment checks are issued. Currently SAMS provides no reporting based on the Payment.Date so its purpose is informational only, but given the clever revenue generating techniques of our elected officials it may take on some meaning in the future. Maybe it has, if there is a need in your basuness, drop us a note and we'll address the issue.
Get paid for ALL of the work you do -
Sales Orders written don't mean much if they are not shipped. Ask a Merchandise Manager what happens when an order is written and only partial shipment is made, or worse yet, no shipment at all.
Several years ago I had a conversation on this subject with a buyer for a regional chain of clothing stores.
Her job performance was measured by the profit margin generated from her purchasing budget. She spent her budget as she saw fit based on the merchandising program calendar. At the end of each merchandising cycle she was expected to produce Gross.Revenue/Sales in an amount that covered cost-of-goods-sold, departmental overhead and operating costs, and profit which is passed through the store to Corporate.
In the years since that conversation, I've seen her perspective at work not only in the retail sector but also in the manufacturing and wholesale distribution industries.
- Shipments that fell short of the ordered product quantities or didn't provide the expected product mix were issues that she viewed very seriously. Writing a Purchase Order reduced her Open.to.Buy position and shipments deviating from the order put her revenue plan at risk due to the lack of product available to sell. Typically it was too late for her to use those unshipped dollars on replacement product and both the merchandising mix and quantity fell short of expectation.
- She expected her Sales Reps to protect her Open.to.Buy commitments, and if they didn't she had no qualms about making whatever changes were needed in order to get the service she expected next time around.
Backlog management is essential in order be paid for everything you do.
Mistakes and oversights will occur, after all we are "mere mortals". The errors are most easily caught when activities are monitored by more than one person.
What got us here? Oh, I remember, getting paid and keeping some. Yes, sales are important, but that is just the beginning. It turns out Customer Service can be a selfish activity as well as a profitable one!
- Use the Manufacturer Order BackLog (56.01.D) as a "reminder" to the Manufacturer of the Orders you are expecting to ship and to identify scheduled shipments missed. If it shipped, GREAT, payment should be coming; If NOT, you missed out on the income, your Customer was prevented from performing as planned, and the Manufacturer's sales revenues fell short. That's a "lose lose lose"!
- Use the Manufacturer Commissions Receivable - Detail (59.01B) to identify and follow up on Unpaid Invoices to be sure they don't "slip through the cracks".
Lessons from the School of Hard Knocks
These notes are the result of telephone conversations and email exchanges over the years. The purpose here is twofold:
- Share the information resulting from those exchanges with everyone so it may be applied where it makes sense to you.
- Point out capabilities you have with WeLoop.SAMS that you may not be taking full advantage of.