The Commission Agreement Details record contains information about a Commission Plan Item that is assigned to a Commission Agreement record. This record specifies the different achievement tiers for a specific commission plan item. The Commission Agreement Details record is accessible from the Commission Agreements record.
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Commission Plan Item (Required)
The Commission Plan Item list field lets the user select the product that sales representatives sell in order to earn commissions under this commission agreement.
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A graduated commission means that the commission is calculated by breaking down the total sales amount by tier and applying the first tier rate or amount to the first tier. The next level of amounts apply to the next tier and so on. The totals from each tier level are added to calculate the total commission.
Graduated Rate Scale vs. Highest Tier Achievement Only
Calculating a graduated rate scale commission on $11,000.00 using the following commission tiers, results in a $900.00 commission.
Tier FromToRateBase QualifiedCommission
1$0.00$5,000.005.0% 5000.00 250.00
2$5,000.00$10,000.0010.0%5000.00500.00
3$10,000.0015.0%1000.00150.00
$900.00
Calculating a highest tier achieved rate scale commission on the same $11,000.00 using the same commission tiers, results in a $1650.00 commission.
Tier FromToRateBase QualifiedCommission
1$0.00$5,000.005.0%
2$5,000.00$10,000.0010.0%
3$10,000.0015.0%11,000.001650.00
$1650.00
The method used for calculating a commission depends on the business intention of the commission plan.