Once a Commission Plans record is created, the Commission Plan Items records, the Commission Rate Scales records, and the Commission Agreements records for that Commission Plan are added. A Commission Plan Items record consists of an individual product or an entire product category, the base formula used to calculate the commission base, and the commission period used to create a set of calculated commission bases. A Commission Plan Items record is needed for each product or product category included in a Commission Plan.
The next items to add to the Commission Plan are the rate scales that will be available in the commission plan when creating commission agreements. Rate scales define the tiers used to calculate a commission from the base formula. Commission Agreement Tiers records reflect the lowest level at which commissions are calculated. Each tier record specifies the commission rate or amount to be applied to a commission base that is within the tiers range.
Finally, commission agreements, which tie the sales representative and commission tiers to a commission plan, are added to the Commission Plan to complete the construction of the organization's specific commission setup based on their products and commission incentive plan.