If you pay your employees commission, you may want to pay them based on charges either before or after discounts have been applied. We'll go through a few examples later in the article to help illustrate the difference.
Changing the Setting
By default, SmartMoving calculates commissions on a Pre-Discount basis. This means commission will be based on values before discounts are applied. You can change this setting in Settings -> Job Discounts, then looking in the "Commission Settings" block.
Example 1: Pre-Discount
Let's take a user that gets a 5% commission on Labor, with the commission set to "Pre-Discount".
Labor costs: $1000
Discount: 10%
Final labor cost: $900
Final commission paid: $50.
Since the setting is Pre-Discount, the math is $1000 * 5% = $50. The discount does not affect how much commission is paid.
Example 2: Post-Discount
Let's take a user that gets a 5% commission on Labor, with the commission set to "Post-Discount".
Labor costs: $1000
Discount: 10%
Final labor cost: $900
Final commission paid: $45.
Since the setting is Pre-Discount, the math is $900 * 5% = $45. In this case, the discount changes the commission, since it is now based on a lower amount.
Example 3: Post-Discount with a Specific Discount Amount
Things are more straightforward when it's a percentage discount amount. But what if the discount is a flat amount? For that, we'll need a more complex example with some other costs. Let's see an example again with a user that receives a 5% commission on Labor with the system configured for "Post-Discount".
Labor costs: $1000
All other charges (valuation, fees, etc): $1500
Total cost: $2500
Discount: $100
Final cost: $2400
Final "pro-rated" labor cost: $960
Final commission paid: $48
What we're doing in this situation is we're treating the discount amount as a percentage discount. $100 off of a $2500 job is a 4% discount. So, then we take 4% off of the $1000 labor costs, leaving us with $960 labor costs, which is what we use for our commission calculation.