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Summary
Commission schedules form the basis of the commission rules in RPM. For each subscriber every agency has an agency commission schedule and every supplier has a master commission schedule. Commission schedule rates cover every product and every rep in the system with agency addendums and adjustments used for exceptions.
Commission schedules in RPM are intended to model the real world commission schedules that are a part of agent contracts. In most cases the schedules in RPM will look almost the same as their paper contracts, except that RPM has the additional challenge of applying the rules in the schedules to the real world commission data from the suppliers. In some cases the commission data may not contain enough information to support the real world commission schedule so the schedule in RPM may look quite different. This is OK as long as the end result of the commission rules still works out.
Agency schedule templates and commission groups
Every agency must be able to be paid a unique rate on every different product; however a schedule management system that simply represented this level of granularity would be very hard to manage. Thankfully we are able to take advantage of two grouping methods to ease management and use exceptions to handle the unique situations:
- There are agencies that get paid the same as other agencies on some or all products. RPM uses agency schedule templates with commission rates and every agency commission schedule is based on a template. For the occasional agency that has a different rate their schedule can be modified from the template without having to create a whole new template just for them. Any number of agency schedule templates can be created.
- Note: There is a default template that can’t be deleted guaranteeing that an agency will always have a schedule.
- Note: The commission schedule of an agency is always based on one template.
- Products are often very specific while the real world commission schedules are often more generic. For example, a specific product could be "DSL 256 Biz Connect" while the schedule may list the commission rate for this product under just "DSL" or maybe even as generic as "Data". Sometimes it is as extreme as all products from a supplier paying the same. The point is that usually products can be grouped for commission purposes so in RPM the schedule is made up of "Commission groups". If necessary each commission group could contain a single product, but the management benefit comes when multiple products can be matched to a single commission group.
- Note: It is up to the staff users to match the products to commission groups.
- Note: A product can only belong to one commission group. Newly imported products don’t belong to any commission group until they are matched.
Commission group tiers
Simple commission groups have a single gross rate and agent rate for each template. Some situations require that a commission group have different commission rates depending on something in the data. To accomplish this, the commission group is given "tiers". Each tier has some combination of a label and/or identifying value, a gross rate, and an agent rate for each template. RPM automatically chooses the tier to use during calculation. If a tier can not be found for an item a commission warning will be generated.
There are three tier structures available:
1. Variable based
The tier used depends on the value of a custom product variable, custom item variable or a built-in item value (Example: Net billed, Gross commission).
- Use: Create a commission rule that depends on something in the commission data other than just the product name.
The way the tiers work depends on the variable type:
- Code: Each tier is given a specific value and if the code matches that value the tier will be used. In addition, a single "catch-all" tier can be added that will be used if the code value doesn’t match any of the other tiers.
- Money, Number, Date, and Percent: Each tier is a consecutive value range. The first tier includes everything below the first value and the last tier includes anything above the last value.
- Note: Custom variables of type "Text" can’t be used for tiers.
Since different product variables values lead to separate products being created, and separate products can be given separate commission groups, tiering by a product variable gives the same end result as using separate commission groups. So why have product variable based tiers at all? There are three reasons:
- In some situation using a single commission group may make the schedule easier to read and manage. This is especially true if the catch-all tier can be used.
- A schedule may require quite complex rules that can only be handled with "multi-dimensional tiering". That means the commission rate of the product depends on two variables. In the paper version it could be shown in a grid. To handle this in RPM a product variable must be used to create separate products that will then be matched to separate commission groups. Each of those commission groups will then be tiered by the second variable.
- A similar method to the above workaround for multi-dimensional tiering can be used to mix variable based and quota based tier structures.
2. Quota based
Like a variable based tier structure, the tier used in a quota based tier structure depends on values in the commission data. The difference is variable based only looks at the value of the single item while quota based sums the value of all items of that commission group for that agency.
Only items variables may be used for quota based tier structures and only the type money or number.
- Use: Create a commission rule that depends on the total value of sales an agency makes for a commission group.
- Note: Not related to agency quotas.
3. Gross commission %
The tier chosen is based on the gross commission paid to the subscriber. When choosing a tier RPM will use the claimed % value first, then the actual gross commission.
Because the gross rate of the tier is being used to select the tier, the expected gross commission will always equal the actual gross commission. This means the gross commission audit is useless for items that have a product matched to a commission group with a gross commission % tier structure.
- Use: Gross commission % provides a way to still pay agencies correctly even when the supplier commission data does not provide enough information to model the paper schedule correctly
- Note: A variable based tier structure can use the gross commission of an item as the tier value. At first glance this may seem to be the same thing as a gross commission % tier structure, but it isn’t. A gross commission variable based tier will be chosen depending on what range the dollar value of the gross commission fits in to. The tier value is separate from the tier gross rate so the gross commission audit will still function.
- Technical: When using a gross commission % tier structure with gross rates of the type cash, the absolute value of the gross commission will be used so that negative values (Example: Charge backs) will work.
Hidden commission groups
Commission groups or tiers of a commission group can be hidden from agent users.
The primary purpose of commission schedules in RPM is to be used for commission calculation. A secondary benefit is that agent users can use RPM to view their commission schedules. This is fine in most cases except that sometimes the schedule that is required to calculate commissions is different from the schedule agents will use to sell new products. There could also be cases where the commission schedule is being used to handle commission complexity that is beyond the needs of agent users.
- Use: When there are commission groups that are used for unique situations that don’t apply to most agents
- Use: When there are commission groups that are required to calculate residual commissions, but won’t be used for new sales.
Security
Staff users
- Viewing commission groups and agency schedule templates requires the "View master schedules, account groups" privilege.
- Adding and editing commission groups and agency schedule templates requires the "Edit master schedules, account groups" privilege.
- Viewing agency schedules requires the "View agency schedules" privilege.
- Adding and editing agency schedule modifications and assigning agency schedule templates to agencies requires the "Edit agency schedules" privilege.
Agent users
- Agent users see the commission schedule template assigned to their agency while any modifications applied. Modifications hide the original template rates from the agency.
- Agent users see the agent rate.
- Commission schedules can be entirely hidden from all agent users. Setting this option requires a staff user with the "" privilege.
Modules
- The commission schedule requires the "Commissions" module.
Adding commission schedule elements
Master commission schedule
Every supplier automatically has a master commission schedule.
Agency commission schedule
Every agency automatically has a commission schedule. You can change the template their schedule is based on from the agency commission schedule page.
Agency schedule template
On the "Schedule designer" page click "Add an agency template".
Commission group
On the "Schedule designer" page click "Add a commission group"
- This page was last modified 19:39, 17 Apr 2007.
- This page has been accessed 4476 times.