Paying commission to an Agent for introducing business

Consider having a sales commission app to integrate with your QBD.

Can this be done in qb desktop? I guess there is a sales rep feature, but don't know how to set it up.

Hi there, RWIT_Simon_Franklin and Test2Go.

Thank you for visiting the QuickBooks Community. I'll ensure to share details on how to record agent commission on a customer invoice. Then, to make sure that you're able to find a report to reconciling/identifying the items that have been previously reconciled. 

Yes, adding a sales rep and feature for this in QuickBooks Desktop is available. To start setting up this option, you can create or add a Sales rep in QBDT to record the commission of your sales agent. Then, make sure to assign the sales rep to your invoice. 

Here's how:

1. Go to the List menu and select Customer and Vendor Profile Lists.
2. Choose Sales Rep List.
3. Click the Sales Rep drop-down menu and select New.
4. Choose a name from the Sales Rep Name drop-down list.
5. Click OK.

Once done, go to the invoice page and make sure to click the Rep drop-down list. Then, select the specific sales rep to the invoice. 

In case your invoice doesn't have a Rep field, you have the option to add it. Please follow the steps below.

1. On the Lists menu, select Templates.
2.  Click Edit Template. 
3. Select Additional Customization and place a checkmark in the box beside REP. 
4. Click OK twice to add the Rep field to your invoice.

Once your customer paid the invoice, the agent or rep associated with the entry will also automatically be paid.

On the other hand, you can always run a previous reconciliation report so you can review your past reconciliations. Then, identify the items that have been already reconciled to the Agent. You can click this article to see the steps on how to perform the process: Get reports for previous reconciliations in QuickBooks Desktop.

Please refer to this link to view different articles that provide topics about your company's income and customer transactions: Sales and customers.

Feel free to go back to this thread if you need anything else while working with sales entries. I'm always here to help. Have a good one.

Hi ChristieAnn

Thanks for your reply. 

We're using the API to create the invoice with the relevant line items so i'm not sure how the Rep and specifying the amount of Rep commission fits into that. 

Can you expand on this element of the reply "Once your customer paid the invoice, the agent or rep associated with the entry will also automatically be paid."

How is the rep automatically paid? And do the individual items get reconciled as paid? Does setting up as a rep automatically post into the vendor liability account and relevant expense account? 

It might help if I provided more context. The company deals with Sub-Agents, these are organizations that would introduce the business and then get a commission payment based on the invoices raised. 

For example ABC Limited is a sub-agent. They get 10% commission against the premium/invoice value. the commission is only payable to ABC limited when the customer pays the invoice. The commission is proportionally payable based on the amount of the invoice paid

In terms of line item postings before you mentioned Rep i was thinking of setting up the line items as follows:

Writtem Premium  (income)       $10,000

Sub Agent - ABC (liability)            $1,000

Sub Agent Expense                     -$1,000

Due from customer                    $10,000

If i use the Rep function i'm assuming I don't need to split the line items out?

Thanks, sorry for all the questions

Kind regards

Simon

Hi there, @RWIT_Simon_Franklin.

Let me share with you some insights about an agent commission. 

My colleague above mentioned that once your customer paid the invoice, the agent or rep associated with the entry will also automatically be paid. This means that the sales under that rep will be marked as paid, not the actual rep.

Once the sales have rep names already, you can now run a sales report then add a "Rep name" so you can have the commission for your employee calculated.

I'm adding this article as your guide in creating an account: Understand the chart of accounts in QuickBooks.

Feel free to get back to me by clicking the Reply button below if you have more questions about a rep commission. I'm always here to help.

Thanks, I'm still not clear on how the line items, vendors, or reps could work for me. What I'm trying to do is identify when money to an Agent becomes payable, be able to mark which items are payable then pay the sub-agent and reconcile the account. 

If I sell a service that the sub-agent has introduced they get a commission. They're only due that commission once the customer has paid. 

For example, the service is $1,000 out of that the sub-agent will get $100 but only once the customer has paid. To make this slightly more complicated the sub-agent will get the proportional amount that the customer has paid e.g. if the customer pays $500 the sub-agent is due $50. I'd like to see an account something like this

Customer    Sub-Agent Commission    Customer  Balance        Customer Paid      Commission Payable   Already Paid

Client A                         100.00                         1,000.00                      0.00                        0.00                   0.00

Client B                         100.00                                0.00               1,000.00                    100.00                   0.00

Client C                         100.00                            500.00                  500.00                      50.00                   0.00

I'd then want to mark the commissions that were payable and reconcile them as being paid. The following month I'd only see the outstanding commissions payable. 

Customer    Sub-Agent Commission    Customer  Balance        Customer Paid      Commission Payable   Already Paid

Client A                         100.00                         1,000.00                1,000.00                    100.00                   0.00

Client C                         100.00                            500.00               1,000.00                      50.00                 50.00

I've looked at sales rep and vendor and just posting the item to a liability account but I can't seem to find out how to identify items that are due. I'm guessing I could do this via a report but then I'd still have to find a way of marking the items I wanted to pay. Ideally, I'd be looking for a function in the desktop application to help me do this. 

Thanks

Simon

Thanks for adding more details about your concern, RWIT_Simon_Franklin.

Let me join the conversation and guide you in the right direction on how to track the line items.

As mentioned by my peers, you’ll have to set up the agents as sales reps in the company file. Then, create an invoice and manually compute the commission and add it to the entry.  

Based on the details shared, I recommend consulting with an accountant for further assistance. They can guide you on how to handle this type of situation in QuickBooks Desktop (QBDT). This way, you’ll know when the items are due and keep your records in order. 

Also, you can run the Sales by Rep Detail report to track the commissions. This will show sales income from each sales representative and lists the sales transactions that contributed to each sales total.

1. Click the Reports menu at the top bar to choose Sales and Sales by Rep Detail.
2. Press the Dates drop-down and set the correct date range.
3. If you wish to add more information, choose the Customer Report button.
4. Tap the Refresh button to apply the changes.

Let me share some links to help you in the future. These resources provide detailed information about personalizing customer or sales reports. From there, you’ll learn how to memorize statements, set up report preferences, etc.

• Customize customer, job, and sales reports in QuickBooks Desktop
• Customize reports in QuickBooks Desktop

You can also bookmark this article for additional resources: Set up commission payroll items and reports. It will guide you on how to track commissions paid to employees.

Feel free to visit the Community again if you need help with managing commissions and other QuickBooks concerns. I’m more than happy to lend a helping hand.

Hello, I've set the sales rep's up, but I also have products that are formulated by physicians that receive royalties on those products. Is there a way to set royalties up on certain products? I have set products into categories and was going to start messing around and looking to see if I can attach a sales royalty to those certain categories of products, but thought would ask here first.

Hey, @Roslynne. 

Thanks for chiming in on this thread and asking questions about setting up royalties in QuickBooks Desktop. 

I can see how beneficial this could be for you and your business. However, there isn't a way to set this up in QuickBooks Desktop. 

I recommend working with your accountant to see about alternative accounting methods, based on how the business is ran, to make this work in QuickBooks. 

Please come back and let us know what your accountant suggests. We're always here to have your back. Have a wonderful day!