The Xero API is a RESTful web service and uses the OAuth (v1.0a) protocol to authenticate 3rd party applications. The Accounting API exposes accounting and related functions of the main Xero application and can be used for a variety of purposes such as creating transactions like invoices and credit notes, right through to extracting accounting data via our reports endpoint.
Invoices and Payments
Commissions are primarily calculated on Revenue. Revenues are mostly based on invoices entered into the accounting system. The various attributes of invoices can be used in the calculation of commissions. In many situations, sales reps are directly associated with invoices. This can be used in properly crediting the invoice to the sales rep prior to calculating commissions. Other data attributes useful in commission calculations include Quantity, Amount, Customer, Product, etc.
In addition to transactional data, QCommission can import master data from Xero such as Customer, Item, Vendor, etc. The data imported can include the hierarchy structure. This becomes very useful in calculating commissions based on these various criteria.
There are many special commission needs that QCommission has to handle in importing data through Xero API. Here are some of the requirements being handled:
Some product and service lines may also need to be excluded from commission calculations. For example, sample items being provided as part of sales may not be commissionable. Commission calculations can also be set to only calculate for certain item groups, even if all data are imported.
In many commission calculations, a sale must be credited to more than one rep. It is normally split between two reps but could go up to 5-way or higher splits. This could be because two sales reps work in a particular territory or if an item is sold in one territory and shipped to a different territory. In addition, the splits could be equal or unequal such as 60/40.
As part of our consulting we will advise on how to configure reps and split percent in Xero directly, if necessary, or in QCommission.
Profit based Commissions
Many companies calculate commissions based on profit rather than revenue. If products and services are bought and resold, this type of commission makes a lot of sense. Profit commission provides more control over the deal size, where sales people are allowed to discount the sale price.
To calculate commissions on profit, the cost needs to be known in addition to the revenue. There are numerous ways of specifying a cost for a sale:
- Cost can be a fixed average number. For example, consulting companies may decide on an average hourly cost for all their consultants being in different places.
- Cost can be a specific number per product or service. Manufacturing firms may calculate a specific cost per product and assign it to the product, since it may be difficult to know the exact cost of manufacturing.
With the sophisticated ability to calculate profit, QCommission can handle almost any kind of profit-based commissions.
Discount based Commissions
Companies allow their sales people to discount prices on occasion. To make sure that there is not excessive discounting and margins are maintained, they may use the commission plan. Based on how much the product is discounted from the list price, the commission rate may be reduced. This can be done as discount tiers: 0% to 10% discount, 11% to 20% discount, etc.
To calculate discounts we need to get Product list price, price on the invoice and unit cost from Xero. Then the discount rate must be calculated and compared to the various tiers to determine commission rates. QCommission can handle these types of calculations.
Sometimes commission rates can change based on AR Aging. If the number of days it takes to get paid for an invoice increases, commission rates could be reduced. QCommission can understand these differences and pay at different rates.
QCommission does a tremendous job understanding the intricacies of the Xero data structure as well as the complications inherent in the commission process. With this ability, it integrates the two systems in such a manner that the complexity to the customer is reduced to a minimal level. Because of the complexities and the number of different ways customers can use Xero, our expert services are utilized to configure the exact integration process between QCommission and Xero for the best solution.
"The QCommission team did an excellent job at handling our needs for a new sales commissions program. They took the time to review our initial needs for the program and then worked with us until we resolved all the "if this, then that" issues we were working with. The program uploads to QuickBooks and automatically does the calculations. You are then able to do adjustments, if necessary, and export very professional reports and e-mail them. We are extremely pleased with the QCommission team and highly recommend them “.