The HR for Dynamics solution can calculate sales commissions based on an employee's sales achievements.
Introduction to Commissions (use case)
What is a Sales Commission?
Sales Commission is how companies pay their Sales Associates. There are different structures for these commissions, leading to varying compensation levels. Payments can be made weekly, biweekly, monthly, or as a one-time payment. Typically, commissions are paid at the end of the specified period, but there can be delays if companies wait for client payments before paying their sales team.
Case Study
Honag Inc specializes in Shift Management App on Dynamics365. Honag Services USA, an arm of Honag Inc, has a strong sales presence across USA. Sales Associates of Honag Services USA sell both Shift Management App licenses and the necessary consultancy services to end-customers.
The Sales Associates of Honag Services USA are on a bi-weekly payroll frequency. For the ease of sales commission calculation, the associates are paid sales commissions only after the end of quarter. To be eligible for sales commission as per company policy, the customer must have settled their invoices in full on or before the last day of the Quarter.
An example Commission structure is explained below. In the click-through documentation, you will also learn how to set it up.
Example Case 1: Target-based with % commission
Commission Structure:
Product sold: License
Target based?: Yes
Quarterly Target: 100,000 USD
Rules in simple words:
In the structure seen below, a Sales Associate misses out completely on earning any sales commissions, if he only brings in less than 50000 USD of license sale revenue.
However, he starts receiving commissions as soon as he crosses the 50k mark.
Note: It is not possible to setup decimals in the system. System rules when setup as seen below, will make an employee eligible for 1% commission as soon as he hits 50,000 USD.
| Target Achievement | % commission |
| 0-50% (system automatically considers the range 0-50,000 USD, because of 100k target) |
No commissions paid |
| 50-75% | 1% |
| 75-100% | 2% |
| 100% and above | 3% |
Example Case 2: Value-based with % commission
Same example without setting a pre-defined target:
Product sold: Services
Target based?: No
It is also possible to setup rules without a target. In such cases, the range with currency value is setup like seen below.
| % commission | Sale volume |
|
No commissions paid |
For amounts <10,000 USD |
| 1% | 10,000-50,000 USD |
| 2% | 50,000-100,000 USD |
| 3% | 100,000 USD and above |
- In both the above examples, the logic for total commission calculation was
Total Commissions = Sales Achievement in Currency value x Commission %
Example Case 3: Target-based with commission amount per % reached
There is also another way to calculate commissions. This rule engine works only for Target based.
Commission Structure:
Product sold: License
Target based?: Yes
Quarterly Target: 100,000 USD
Rules in simple words:
In this rule, you can setup that an employee receives a flat amount of money on every % achieved on his target. This means when he reaches 10%, 10 USD is applied 10 times. End result the employee gets a commission of 100 USD.
| Target Achievement | Commission Amount per % reached |
| 0-50% (system automatically considers the range 0-50,000 USD, because of 100k target) |
10 USD |
| 50-75% (system automatically considers 50,000-75,000 USD) |
20 USD |
| 75-100% (same logic applies) |
30 USD |
| 100 % and above (same logic applies) |
40 USD |
Recommendations
- Audit all the Sales Achievements as part of your sales process. Import the Achievement records in the 'approved' status (via Excel or Flow) to HR for Dynamics just once.
- It is not possible to process commission payments on an interim basis for goals set for a quarter. Once a sales achievement is paid out, the same achievement record won't be considered for payment again. Primary reason why we recommend creation of approved achievements in the system only after the quarterly numbers are consolidated in your sales end of the system.
- Use case: An employee falls <50% first two months. If achievements are entered in HR for Dynamics real-time in approved status, the monthly payroll run will include these achievements for calculation. As per our example, the employee will receive 0 USD. Let us say, the Sales Associate does a big sale in the third month that helps him meet the target overall. By processing the achievements on a monthly basis, you miss out on considering his past achievements for the final calculation. To avoid this, please import the audited achievements just ONCE before manually triggering the "Generate Payments" dialog.