Commission Accruals

Details

iDynamics Commissions let you specify an expense account and a liability account that can be used to accrue commissions when these are generated, before the actual commissions are settled.

Enable Accruals

For accruals to be used, the first step is to open the general setup page, and assign these accounts to the Accruals tab.

You will also need to assign a series number for the G/L journal postings that the app will perform internally when accruing commissions. The available fields are:

• Accruals Enabled. After you've setup the different account numbers, check this field to let the app know that it should handle accruals.
• Expense Account No. This is the account that will be debited when an accrual is posted.
• Liability Account No. This is the account that will be credited when an accrual is posted.
• Settlement Account No.. If you specify a different account from the liability account, when you pay commissions using settlement documents this account will be credited when the settlement document is posted (the liability account will be debited). If you pay commissions using purchase invoices, the G/L account assigned to the salesperson in their card (configured for the assigned Posting Group) will be used instead.
• Accrual Nos. This is the series number that will be used to post accruals. One will be automatically configured when you install the app, but you can change it if you would prefer a different series.

Once this info has been setup, you can enable accruals to show all available options int he Commission Entries list.

Scenarios

Depending on how they are configured, there are two main scenarios supported by the app:

1. Commissions are accrued from an expense account into a liability account, when they are generated, and they will be paid from the liability account.
2. Commissions are accrued from an expense account into a liability account, and then they will either be returned to the expense account or moved to a different account, from which they will be paid.

The main difference between the first and the second is that, in the first scenario, the Liability Account No., the Settlement Account No., and the posting setup account, will point to the same account number.

In the second, settlements and/or posting groups for purchase invoices will use a different account, to which the accrued amount will be credited when a settlement document/purchase invoice is posted.

Manual Accruals

Once you go back to the list of commission entries (you might need to navigate to a different page and go back to the list if it was already open), after enabling accruals, you will see a new column called Accrued Amount (LCY). This shows the amount accrued for each commission entry and, after you enable accruals, it will be zero for all entries.

In the action bar, under the Home menu, you will find the Accrue Commissions... action. If you run it, the app will ask you whether you want so specify any filters (you can leave all filters blank). Once you click OK the process will run, and you will see how the Accrued Amount (LCY) column for each entry matches the Outstanding Amount column.

Further more, if you click on the Accrued Amount (LCY) column, you will see a summary of all accrued amounts for the commission entry.

Automatic Accruals

When the app is installed, a job queue entry called Post Commission Accruals is automatically created. You can edit it to schedule when you want to post accruals, and then click on Set Status to Ready, for accruals to be posted automatically.