Automate Sales Commission in Zoho Books: A Step-by-Step Guide

First, I will show you how to set up custom fields in Zoho Books to track essential information such as the salesperson.

Then, I will guide you through adding a custom commission field in the Payments Received module. Since automation is key to saving time and reducing errors, I will walk you through setting up workflow rules and Deluge scripts for automatic sales commission updates.

With this guide, you’ll be equipped to streamline your commission management process and effectively drive sales performance using Zoho Books.

I will give you step-by-step instructions on how to implement Sales commission calculations using Zoho Books.

Definition and Uses of Sales Commissions

A sales commission is a sum of money paid to a salesperson for their role in completing a sale. This is often a percentage of the revenue generated from the sale, serving as a direct incentive for sales representatives to increase their sales efforts.

Uses of Sales Commissions:

1. Motivating Sales Teams: Commissions provide a financial incentive for salespeople to meet and exceed sales targets, driving them to perform better.
2. Aligning Goals: They help align the goals of the sales team with the overall business objectives, such as increasing revenue and improving customer acquisition.
3. Rewarding Performance: Sales commissions reward employees based on their performance, which can lead to higher job satisfaction and retention rates.
4. Managing Costs: As commissions are typically tied to revenue, they can help manage labor costs more effectively since payouts are proportionate to the income generated.

Company Example:

• Company: Contoso Inc.
• Commission Rate: 1% of Total Revenue Received in the bank

Sales Commission calculations can vary based on your business needs, from flat rates to more complex sales commission structure. I will focus on a straightforward example where a business offered three sales representatives a flat 1% commission on revenue received

Payments Received by Sales Representatives for Jan 2024

John Doe

Jane Smith

Bob Johnson

Commission Report

How to implement these Sales Commissions in Zoho Books?

It’s a simple 5 step process!

Step 1: Set Up Custom Fields

Step 2: Create Workflow Action i.e custom function

Step 3: Create a Workflow Rule

Step 4: Test the functionality

Step 5: Customize report and Schedule Reports

Let’s deep dive into each Commission Calculations step and understand how to implement them in Zoho Books.

Prerequisites

• You must have Zoho standard or professional edition to implement this
• You must have set up the salespersons in Zoho Books

Go to Settings-> Preference-> General and tick the checkbox for “I want to add a field for salesperson”

Learn how to assign sales transactions to salespersons by reading the official Zoho documentation here.

We are assuming that you have assigned the correct salesperson to each invoice.

Let’s understand the next steps

Step 1: Setting Up Custom Fields

1.1 How do you add a custom field for the customer?

To effectively track commissions, you need to ensure certain details are recorded for each customer. Here’s how you can add custom fields in Zoho Books for ‘Sales Person’ :

1. Log in to your Zoho Books account.
2. Navigate to ‘Settings’.
3. Here, you will find the option for ‘Custom Fields’, Click on it.
4. Add a Custom Field named ‘Sales Person’.
5. Specify the data type for each field.
6. inherent value from the invoice so that you can add that field to your Custom Reports,
7. Save the settings.

Edit the custom field “Sales Person” on the “Payments Received” settings page.

Editing payment details for a customer, including the amount received, commission, and salesperson.

1.2 Implementing a Custom Sales Commission Field in the Payments Received Module

Once the customer fields are set up, the next step is to manage commissions on sales:

1. Navigate to the ‘Payments Received’ module in Zoho Books.
2. Add a custom field named ‘Commission’.
3. Set this field to automatically calculate 1% of the payment received as the commission. This calculation can be configured using a simple formula within the custom field settings.

Editing custom field “Commission” for payments received, with data type set to “Amount.”

Step 2: Workflow Automation

2.1 Recording Payments and Triggering Sales Commission Calculations

2.2 Setting Up Workflow Action and Deluge Scripts for Automated Commission Updates

Implement Deluge Scripts: These scripts automatically calculate the commission based on the payment amount and update the Commission field accordingly.

What is deluge script want to know click here

Here is a Deluge Function In Zoho Books for Sales Commission field automation:

      paymentID = customer_payment.get("payment_id");
organizationID = organization.get("organization_id");
datePayment = customer_payment.get("date");
branchName = customer_payment.get("branch_name");
paymentMode = customer_payment.get("payment_mode");
apiUrl = organization.get("api_root_endpoint");
amount = toDecimal(customer_payment.get("amount"));
// Convert to decimal
commissionPercentage = 0.05;
commission = amount * commissionPercentage;
// Now amount is a decimal, multiplication should work
cList = List();
cMap = Map();
cMap.put("api_name","cf_commission");
cMap.put("value",commission);
cList.add(cMap);
json = Map();
json.put("custom_fields",cList);
params = Map();
params.put("JSONString",json);

paymentUrl = apiUrl + "/customerpayments/" + paymentID + "?organization_id=" + organizationID;
updatePayments = invoke url
[
   url :paymentUrl
   type :PUT
   parameters:params
   connection:"zBooks"
];
info "Payment updated successfully. Payment ID: " + paymentID;
info "Payment Amount: USD" + amount.toString("#,##0.00");
info "Calculated Commission: USD" + commission.toString("#,##0.00");

Here we have used ZBooks as a connection you can set up using the given steps below, What is Connection? want to know click here

Here is a step-by-step process to set up a connection in Zoho Books:

Step 1: Log in to your Zoho Books account

Step 2: Go to settings and search “connections”

Step 3: Click on My Connection → Create Connection

Viewing and managing connections in Zoho Books, with an option to create a new connection for commission filed.

Step 4: Now, Choose your Connection service, we have chosen ZohoBooks Services. You can choose according to your needs.

Step 5: Enter your connection details

Step 6: Choose your scopes and update the Connection

2.3 Creating Workflow Rules to Support the Automation Process

Create a Workflow Rule: This rule triggers whenever a payment is recorded.

Step 3: Test the functionality

You can now test the functionality that you have set up using above mention steps

Step 4: Reports

4.1 Customize Reports and Schedule Reports

Customize the ‘Sales by Salesperson’ report by including a Commission column.

• Navigate to ‘Reports’ and select ‘Sales by Salesperson’.
• Adjust the settings to add the Commission column, which will help track how much each salesperson earns from commissions.

Customizing Sales by SalesPerson report by adding/removing columns as per your needs.

Sales by salesperson report after exporting it to Excel (.csv format or .xlsx format)

4.2 Understanding the ‘Payments Received’ Reports

Learn how to customize and export the ‘Payments Received’ reports to Excel (.csv or .xlsx format).

4.3 Scheduling and Automating Report Emails

Here are the detailed steps on how to filter Salesperson and schedule reports salesperson-wise, ensuring that particular reports are shared with the respective salesperson.

Step 5: Filtering Reports By Sales Person and Generating Custom Report

5.1 Open the Report:

Navigate to the ‘Payments Received’ report section in your accounting software.

5.2 Apply Filters:

Click on ‘More Filters’ and select ‘Sales Person’ from the dropdown menu. Enter the name of the salesperson you want to focus on.

5.3 Save the Custom Report:

After applying the necessary filters, click on ‘Save as Custom Report’ to keep this configuration for future use.

The below image shows how to customize the custom reports Fields.

The below image shows how to customize the custom report layout.

The below image shows how to customize the custom reports preferences.

The below report is the payment received by the sales person.

When a Scheduled Report has been Emailed Automatically, it looks like:

Conclusion

The article provides a solution to automate sales commissions in Zoho Books. It explains how to set up and use custom fields, automate calculations, and customize reports. This process ensures efficient and accurate tracking of sales commissions, helping businesses save time and gain better insights into their sales performance.

Additionally, if your business requires more advanced integration services, including Zoho Books API Integration, our team can provide the necessary developmentt. Our expert API integration developers can help you seamlessly integrate Zoho Books with your existing systems to further enhance your financial management processes.

FAQ

What are the most common types of sales commissions?

Commissions can vary widely based on industry, company policy, and sales structures. Here are some common types of commissions:

Straight Commission:

Salespeople earn a percentage of each sale they make. No base salary is provided.

Base Salary Plus Commission:

Salespeople receive a base salary plus a commission on the sales they generate.

Gross Margin Commission:

Commission is based on the profit margin of the sale rather than the sale amount. This incentivizes salespeople to sell higher-margin products.

Revenue Commission:

The commission is earned on the total revenue generated by the salesperson.

Tiered Commission:

Commission rates increase as salespeople reach higher sales targets. This commission structure rewards top performers.

Residual Commission:

Salespeople earn ongoing commissions from customers they have signed up, particularly common in subscription or service-based businesses.

Draw Against Commission:

Salespeople receive an advance on their commission (a draw) which they must earn back through their sales. If they don’t meet the sales targets, they owe the difference.

Territory Volume Commission:

The commission is based on the total sales volume within a specific territory, often shared among multiple salespeople.

Team-Based Commission:

The commission is shared among a team, promoting collaboration and shared goals.

Performance-Based Commission:

The commission is tied to achieving specific performance metrics or targets, such as customer acquisition or retention rates.

These commission structures can be customized and combined to fit the needs of the business and to motivate the sales team effectively.