The Commission Accounting discussion focused on Commission Statements and monitoring to be sure payments are received for ALL of your efforts. The Get Organized discussion looked at using the "folder structure" to organize information you store on your computer. There is another element that has not been looked at, and it came up in a recent conversation concerning the amount of time devoted to all of the record keeping that is a necessary part business - the @#$% PAPER! In my perspective "the system" includes ALL of the activities and components associated with record keeping, not just the keying of information into the computer.
I was once told "if it's hard to do, you're probably doing it wrong". Over the years this position has been validated in conversations with equipment maintenance supervisors, contractors, and software developers. "We've always done it that way" often times indicates changes may be appropriate, but it does NOT indicate changes are necessary. "There is more than one way to skin a cat" is valid and you must establish the rules and requirements applicable to your situation.
Take a look at the three documents upon which your records are based:
The question is "What do I do with the paper?" As you review this, be aware we are playing "You Bet Your Business" here, and it's YOUR business we are talking about. I'd greatly appreciate any feedback you might have on this topic because I don't think there are any rules that can be applied to everyone, yet I believe the problem is a universal one.
- Customer Sales Orders
- Manufacturer Invoices
- Commissions Statements
Customer Sales Orders
In most cases there is only an occasional need for the Sales Order document to be reviewed in chasing down a problem. Typically, once the Sales Order has been recorded it will not be looked at again. If this is true, spending a lot of time filing Sales Orders so they can be quickly retrieved may not be a worthwhile effort. Why not just file Sales Orders in the sequence in which they arrive, which will be "more-or-less" by Sales Order Date?
Does this make finding the Sales Order more effort than if it were filed carefully by Customer? Yes! The question is how much time and effort is spent in that filing process compared to the time devoted to locating Sales Order documents. My guess is that a little more time required to locate the occasional order, compared to the time expended carefully filing every Order, represents a significant time saving.
- If you have a need to find the Sales Order, use the computer inquiry functions to look it up by Customer or Manufacturer. You'll get the Sales Order Date, which is your starting point, and it will also let you know whether it has been shipped as well as the Commission Payment status.
- If you don't find the Sales Order in the computer, it is probably not in the file drawer either.
- If the Order was placed directly with the Manufacturer it won't be in the file, but it will be in the system if an Invoice or Commission Payment has been processed and you won't have spent any time looking for the paper.
Guess what! I think Manufacturer Invoices are about as significant as the Sales Order documents. Once in a while there is a need to review the document, but this is the exception rather than the rule. So, again, why not just file Invoices in the sequence in which they arrive.
Again, finding the Invoice will be more effort that it would be if they were filed together with the Sales Order by Customer or by Manufacturer. But, is the time devoted to carefully filing each Invoice, which reduces the "search time" for an occasional Invoice, time well spent? You'll have to answer that one!
- If you have a need to locate an Invoice, start with the computer Inquiry and go from there. It will also give you the Sales Order to which the Invoice was applied and its commission payment status.
- If you don't find the Invoice in the system, chances are pretty good you'll not find it in the file drawer either.
- It is common that Invoices are only sent as part of the Manufacturer's Commission Payment package. In that case you'll have a whole month of Invoices together, probably in invoice-date or invoice-number sequence, and they won't lie in the file in "pure date sequence", but they will be grouped together.
Now this is a "horse of a different color" in my opinion.
I'd suggest that Manufacturer Commission Statements, accompanied with the related Sales.Agent Commission Statements, be filed either by Manufacturer or by month, and month is probably easier.
- The number of statements is significantly smaller than the number of Sales Orders or Invoices.
- The Commission Statement documents income - enter the TaxMan.
When a question concerning Commission Payment arises, the statements become important very quickly. Does this include the Invoice and the Sales Order? I'm betting in most cases the answer is "No!". The Rep's Commission Statement and the Manufacturer's Commission Statement will usually answer the question, or provide the basis for a detailed search for specific Sales Order and/or Invoice, in which case we're back to the two points above.
If access to "the paper" is REALLY important, it might be worthwhile to consider "document archiving". Disk capacities and processor power today make this a viable alternative that used to be limited to "the big guys", but remember, there is NO FREE LUNCH! If you truly do need to retain and access the paper documents that support your records, the cost to scan and archive may be reasonable, or acceptable, when it is looked at in light of the cost of hand filing and storage space required for the documents themselves.
The scanning process is really not the issue. Locating an "electronic document" is not much different from locating a "paper document". Go to www.google.com and key in "document archiving" or "document scanning", there are tens-of-thousands, if not millions, of entries. The document scanning is only a part of the solution, you must also look at locating a specific document in the archive. In some cases indexing can be automated, but not in all cases, so there is a requirement to carefully review the entire process before you make a commitment.
Yup, paper is a "pain in the .…"! You must weigh the roll it plays in day-to-day activities and handle it appropriately. "In the old days", the Sales Order and the Manufacturer Invoice were the tools used to be sure you were paid for all of your efforts. Today, the roll these documents play may be very different, making changes to the way they are handled appropriate.
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.