Monday, June 27, 2011

QuickBooks: Paying Sales Commissions with Payroll

Add the employee to the Sales Rep list. When entering the employee, click the Type drop-down list and choose Regular for this employee.

On the Payroll Info tab, add a commission payroll item in the area for Earnings. Enter the commission rate as a percentage in the Hourly/Annual Rate field.
- Go to the Lists menu and then click Payroll Item List.
- Click the Payroll Item button and then click New.
- Choose either EZ Setup (for most users) or Custom Setup (for advanced users), then click Next.
- Select the type of payroll item you want to set up and then click Next.
- Follow the onscreen instructions.
- Click Finish when you're done.

Generate a sales by rep summary or by detail report to see the sales amount for each commissioned sales representative.
- Set this to cash basis and select the appropriate date range.
- Memorizing the report will have it ready for you the next time.

Filter by items, item types, or accounts to only show the commissionable items (eliminate shipping, for example),

Pay the commission with a paycheck.
- In the Earnings section of the Preview Paycheck window, enter the sales amount in the Quantity field.

For the information in this report to be accurate:
- Create sales representatives in QuickBooks.
The Sales Rep list is separate from your employee list and doesn't link to your employee information, so you can add in-house reps (employees) and outside sales reps (non-employees) to the list.
- Assign a sales rep to every invoice in QuickBooks. To do this, enter the name of the sales rep into the Rep field on the invoice.

Generate a draft of the report.
- Before calculating the commission owed to each sales rep, look at the bottom of the report. If you see "No sales rep" listed in place of a sales rep name then some invoices were not assigned a sales rep.
- Double-click each invoice line to QuickZoom to it and assign a sales rep to each invoice before calculating commissions. If you don't see "No sales rep" listed, you are ready to calculate your sales commissions.

The amount you owe the sales rep is not calculated on this report, however you can export this report to Excel, enter your sales commission percentage, and let Excel do the calculations.

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