I have a two-part question. I have read other discussions on this topic but none are quite answering my question. I have a remodeling business. We pay our sales reps a commission - a portion when the initial contract is signed and the balance when the project is complete.
Question 1 - I need to apply the cost of the commission to the project so it reflects on the P&L when we evaluate individual project profitability. I have read threads about creating a sales commission service item (done) and about tracking classes with the sales rep as the class (done).
I see instructions about adding the commission to an invoice. I assume this is added as a $0 price line correct?
It appears that I cannot edit my item cost on the invoice. Since my sales commission will be different for every project, should I edit the cost on the commission service item item before adding it to an invoice and once the invoice is saved, it will lock in that cost?
Question 2 - I also need to record commission liability and payments. I assume adding the commission to an invoice is only for assigning a cost to the project, it does not affect recording liabilities or actually paying out the commission? If I am recording the cost of commission at the project level as a cost on an invoice, how do I avoid it impacting my bottom line twice (once as a project cost and again within payroll when I pay the commission)? The sales reps are W2 employees and paid through payroll so we hold back correct taxes.
