Commission on Sales. (Accounting Entry from Sales Invoice).
Generally there is a requirement from Clients that they need Commission entry directly from Sales Invoice.
Currently your Invoice’ Accounting Entry would be something like this:
Customer A/c Dr 100
Sales A/c Cr. 90
Now you want to introduce Commission here But the Commission Amount should not change the Sales & Customer A/c postings.
Insert two Condition Types in your Pricing Procedure as follows:
1. Commission Payable (always Positive)
2. Commission Expenses (always Negative)
Create required GL Accounts & maintain VKOA settings.
The rate of both the above Conditions would be same say 10%.
Now your Invoice’s Accounting Entry would be:
Customer A/c Dr. 100
Commission Expenses A/c Dr. 10
Sales A/c Cr. 100
Commission Payable A/c Cr. 10
Now, as Commission is an Sales Expense, it (Debit entry of Commission Expenses) would directly hit Profit & Loss A/c (like other Expenses of Rent, Interest etc…)
For the Credit Charge of Commission charge the End-User will have to manually pass an Accounting Entry which would be as such:
Commission Payable A/c Dr. 10
To Vendor A/c Cr. 10
The above entry would clear the Commission Payable A/c & create a liability of Rs. 10 in Vendor’s account.
We have implemented the above scenario at a client site & they are successfully using this arrangement.
As you are already entering Partner Function of Vendor in Sales Order / Invoice, you can anytime create a Z-Report for Commission Payable to each Vendor over a period of time…
Hope this helps,
Thanks,
Jignesh Mehta
Hello Jignesh,
Very thoughtful post!
Although I am with you from concept point of view. I was wondering if a document would screen print for configuration details along with G/Laccount determination setup.
I would like more information such as which Account Key would be used for both condition types:
1. Commission Payable
2. Commission Expenses
Would we use Sales Deductions (ERS)?
My query could be little to basic, however would appreciate your further input.
Regards
Vikram
Hi Jignesh,
Thanks a lot for posting ...!
In A/C Payables for credit charge commission with out manual entry pass is it possible an accounting entry ? if it possible . Please suggest me what needs to be done.
Regards,
Raj
There is no other option. From Sales Invoice you cannot post direrctly to Vendor's (Agent) A/c. So we re using Commission Payable Account & then passing manual entry to respective vendor account.
As an alternative, you can directly issue payments from Commission Payable Account. Thus there will be no maunal JV involved here & in the payment doucment, mentioned Vendor's (Agent) name in Text Field.
Thanks,
Jignesh Mehta
Hi Jignesh,
Thanks for instant reply....
If we mention vendor (agent ) to text field and risk is high.any one can change text , more commission for one vendor or less commission for another vendor. please suggest me some other standard solution .
.
Regards,
Raj
Hello Jignesh Mehta
Will TDS work on this concept, I mean when Agent will provide bill and we have to pay. Please highlight the same.
Thanking you!
Ashish Mishra
Hi Jignesh,
It is very informative document. I want to know end of the week or month how I will against which sales representative how much I have to pay and how much already paid.
Regards
Arun
Hello Arun,
The accounting department will have to manually pass the following entry:
Commission Payable A/c Dr. 10
To Vendor A/c Cr. 10
Which means that the amount standing open in respective Vendor account is due to to be paid to him.
Hi Jignesh Mehta,
Wonderful Report !!
Will you please suggest or share how to do for Sales Commision automatic postings after receiving payment from customer in SAP.
at present we are doing manually with JV postings in F-02 and now we required automatic postings in sap
Ex Dr Comminsion
Cr Vendor (Agent)
Regards
Anil Reddy K
Hi Jignesh Mehta
Commission on Sales. (Accounting Entry from Sales Invoice)