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Add Sales Commission Agreement Template countersign

and the last segment here is tracking Commission's so the situation is that QuickBooks Online does not have a built-in mechanism to track Commission's or sales commissions so what we need to do is we need to create a sales rep a custom field for invoices and we're going to create the actual percentage calculation of that commission inside of the invoice itself we're going to record that expense inside of the invoice or the sales transaction which could be a sales receipt and we're also going to create a liability right on the same transaction so the setup is the following first we have to make sure that we have the custom field for quote-unquote sales rep in our sales settings then we need to make sure that we have a commissioned expense account and we have a commission by ability payable account then we're gonna have items or products that are going to mimic or map that expense Ex the Commission expense account and that commission payable account then we're going to set up a bundle similar than the method to do bundles for other type of sales in which we want to create more than one item in the same transaction but hide the details so we're going to create a bundle that includes both of them as a positive and a negative so they can be recorded together so let's start by let's go ahead and launch click books and let's start by going into the settings so we're gonna go into company settings and then we're gonna click on sales and we're gonna click on sales form content and we want to make sure that our rep or a sales rep is created into one of our custom fields so that's really really important now you don't have to show it in public if you don't want the customer to see the rep that's only for internal purposes that would be okay but you need to have at least one of these fields using for rep and you have to have this checkmark called internal marked to make sure that if it becomes enabled in in the invoice itself so that's the first thing we have to make sure that we have that custom field set up then we're going to go into our chart of accounts and we're going to make sure that we have a Commission's expense account so I'm going to edit this one real quick and just to simplify things I call this one Commission expense and make sure that this is a an expense category account type Commission expense and then we have this one called Commission liability which is going to point to it's going to be an other current liability and it's gonna be here called Commission liability this detail type really doesn't matter you know I find this to be more confusing than anything else but if you do want to put something in there I select other current liability which is pretty much the generic one and then click on save and close okay so now we have a commission liability another Commission expands accounts let's move on to our products and services let's make sure that we also have a commission expense item I'm going to click on edit and this is a service item Commission expense and it's pointing to our Commission expense income account obviously this is not an income account but this is the account that is going to be used whenever this product is inside of an invoice itself so that's the Commission expense item and then let's go to Commission liability let's edit that and then is to point to my commission liability account okay perfect so as long as I had those two item setup we're good to go now I'm also gonna create a bundle I'm gonna go ahead and create a bundle and it's called this one sales item I'm just using it obviously a generic item name here so I'm just calling yourselves item and then on my bundle I'm gonna have the actual item of whatever it is that we sell our customers so they say is this one here called services and then we're gonna add Commission expense and we're gonna add Commission liability okay so we're creating a bundle that contains the actual service that were selling to our customers and and two items that we don't want the customer to see now let's say the Commission is 15% so I'm gonna make this negative 0.15 and this has to be negative because this is the expense side and then the liability is gonna be a positive point one five sorry at the end of the day these two need to match just the expense needs to be negative and the liability needs to be positive and then we'll click on save and close perfect I'm gonna now create an invoice I'll pick one of my customers here and then I'm gonna select the bend the bundle that I created called sales item you're gonna see all my three items here my actual services that we sold my commission expense and my commission liability so as long as I create my rate here on their services let's say this is gonna be five thousand dollars and I I'm gonna copy the five thousand dollars down here and copy the five thousand dollars down here okay so it's the same dollar amount throughout at the end of the day here I can put custom accounting services whatever the service happens to be which is a total of five thousand dollars if I if I preview my invoice my customer only sees five thousand dollars which is the only thing that I really care my customer to see but internally what's happening is seven hundred and fifty dollars is being thrown to my expense account for commissions and then seven hundred and fifty dollars is being thrown to my liability account all within the same transaction so on the rep I'm going to put here Hector who is the sales person for this job then I'm gonna click on save and close then I'm going to go into reports I'm gonna go into profit and loss report I'm gonna do a profit and loss just for today so we can pinpoint that exact transaction click on run report make sure that this is on accrual basis and click on run okay there's my commission expense right there seven hundred and fifty dollars okay that's my commission expense that was coming from inside of that invoice now that was another invoice that was created here on the same date so it's basically showing a bunch of transactions but if I actually move that I'm gonna actually move it to one more day which is number one more day so we can just isolate the whole transaction here on the report it would be a lot easier to see so I'm gonna push this profit and loss just one more day forward click on run report perfect so that's all I really want to see I want to see my invoice for five thousand and then I want to see my commission expense for 750 right so it gives me my effective profit when I go to my balance sheet so I'm gonna go ahead and run my balance sheet and then I'm gonna run that balance sheet a soft 30th which was the date of that transaction and then click on run I should now see let me make sure that I'm on a cool basis of course I always have to check that and I actually see my commission liability or seven hundred and fifty dollars then when you actually pay that Commission you would just write a check or do an expense whatever happens to be I'm gonna write that Commission to Hector my my sales person and I would hit my Commission's liability account not expense because expense has already been accrued for so that's a really important piece I don't want to double my expense so I'm gonna I'm gonna use my commission liability account and then pay off my seven hundred and fifty dollars whatever it happens to be and then I click on save and close and now my commission liability account should be at zero as long as I use it up to the date that in the transaction and I should be at zero let me just make sure that this is being run in our cruel basis there it is so I see the check that I wrote and then invoice so that Nets up to zero so that's kind of a tricky one it's not a natural transaction QuickBooks is not really meant to track Commission's that way that's that way you have that's the reason why you have to kind of jump through all those hoops and follow all those processes so as long as you you follow through with them and you do all that at the end of the day you should be able to to run a report for every single rep and kind of the way that will work is I'm gonna go ahead and go back into QuickBooks here so then to get my detailed report of all my commissions I'm gonna go reports and then I'm gonna go to and the report name I'm do sales by item detail I sales by product service detail and I'm gonna click here where it says dates I'm gonna click on all dates and click on run so that's just show everything here who says group by customer product and services I want the selected I'm gonna click on rep so I'm gonna use rep instead and click on run then I'm gonna click on customize and I'm gonna go to filter and I'm gonna select just a product or service for the Commission so I'm going to click on Commission liability and then click on run and there it is I should be able to see broken down by by rep what my commission liability is and based on all the different invoices are created and just for the heck of and just for the sake of keeping the same examples I'm gonna go ahead and duplicate that invoice duplicate it will pick just so we can see two different transactions I'm gonna select a different customer altogether I'm gonna keep it on the same rep and I'll just pick a different dollar amount here so let's say we'll make this one eighty five hundred let me just make sure I copied out throughout any 500 and let's also also assume that the commission rate for this one change for some reason they say this was a thirteen percent doesn't really matter if the Commission changes on the fly just as long as I use the same one to balance the transactions we should be okay there's my invoice for 8500 then I click on save it close you know when I go back into this report and I click on run I should now see all of my commissions this right here 18:55 all of my commissions for that rep so as long as I have multiple invoices and I'm using the exact same technique and I have multiple reps you have no problem tracking these by month or whatever purpose to be right we can group these by by month we can group them by by or select the whole year for the whole quarter so it is a workaround but it actually works really well