Recipe - How To Setup A Monthly Plan With QTD Attainment

Recipe - How To Setup A Monthly Plan With QTD Attainment


Advanced Setup
This is an advanced setup because there are two different ways you can setup plans with QTD attainment but frequent payouts (ex: monthly).

This article applies if you want to setup a plan whose attainment is QTD, but pays commissions monthly (or bi-weekly, weekly, etc.). We'll assume that you want to pay commissions monthly. However, the setup is identical for other periods (ex: bi-weekly, weekly, etc.).

Becoming Familiar With General Plan Setup
We first recommend first reading this article to become familiar with fundamental mechanisms of plan configuration.

Choosing An Approach
There are two primary ways you can measure attainment QTD, yet pay commissions more frequently (ex: monthly, bi-weekly, weekly, etc.):
  • Approach 1 - with deductions
  • Approach 2 - without deductions

Approach 1 - With Deductions
We will always calculate from quarter start. Sales Cookie will evaluate all transactions QTD, determine attainment for each target, and calculate the total commission due - QTD to each payee. However, Sales Cookie will automatically deduct what has already been paid in previous months within the quarter.

Let's say you already calculated commissions for January 1 to January 31 and released rewards. You now want to calculate February commissions. We will scan transactions from January 1 to February 29, determine QTD attainment, and calculate the total commission due QTD to each payee from January 1 to February 29. And then, we will deduct what was already paid in January (so that you don't double-pay commissions over January transactions).



Approach 2 - Without Deductions
We will always calculate from quarter start. Sales Cookie will evaluate all transactions QTD, and determine attainment for each target. However, we will only issue commissions for transactions within the current calculation period.

Let's say you already calculated commissions for January 1 to January 31 and released rewards. You now want to calculate February commissions. We will scan transactions from January 1 to February 29, and determine QTD attainment. However, our per-transaction reward formulas will only process February transactions to issue commissions. No deductions are required.



Choosing The Best Approach
One downside of the "with deduction" approach is that your reps will see deductions on their commission statements, which they could find confusing. On the other hand, the "with deduction" approach is easier to setup.

Also, with the deduction approach, we are constantly re-evaluating commissions earned by each rep on each transaction QTD. This can be beneficial if your commission structure changes mid-year, and you DO want changes to be retroactive. However, it can be a downside if your commission structure changes mid-quarter, and you do NOT want changes to be retroactive.

Without deductions
  • Use this if showing deductions to your payees if acceptable
  • Use this if some of your rewards are NOT per-transaction (ex: cash reward)  
  • Use this if you expect mid-quarter changes to your plan, which should be retroactive

With deductions
  • Use this if you do NOT want to show deductions to your payees
  • Do not use if some of your rewards are NOT per-transaction (ex: cash reward)  
  • Use this if you expect mid-quarter changes to your plan, which should NOT be retroactive 

=============== With Deductions Plan Setup ===============

Start with the guidelines in this article. Sales Cookie will automatically deduct payouts from earlier (overlapping) calculations which have been fully released. Just make sure to run all your calculation from quarter start.

You should see deductions automatically added to your calculations. Here, our February calculation ran from Jan 1 to Feb 29. Therefore, it "overlaps" with the January fully released calculation from Jan 1 to Jan 31, which triggered a deduction. 



Opening the February calculation, we can see there was a deduction worth $1,000. Daniel's total QTD payout is $2,000 (from January 1 to February 29), but $1,000 was already paid for January 1 to January 31. Hence the deduction. 



The payee's dashboard will also reflect deductions:



Plan Period
You should create your plan as a monthly plan (not quarterly or one-off). This way, when you run monthly calculations, the end date will be populated correctly. All you have to do is change the start date to be the quarter start. Sales Cookie will automatically find overlapping released calculations and add deductions. 



An Important Improvement
You should use an advanced option to avoid having to manually override the start date to the quarter start each time you run a monthly calculation. 
  1. Edit your commission plan
  2. Go to the Calculations tab
  3. In advanced options, add this

 

With this in place, you no longer need to manually override the start date to be the quarter start each time you run a calculation! Sales Cookie understands we need to scan transactions from quarter start and apply deductions.



This will also eliminate warnings about overlapping calculations:



Duplicate Payment Warnings
You might notice warnings like this:



Sales Cookie is trying to warn you whenever we detect potential double-payments (i.e. paying a commission twice or more, to the same payee, over the same transaction). 

Using the "with deductions" approach, the same QTD transactions are being re-processed with each monthly calculation within the quarter. Deductions is what protects you from double-payment. Those alerts therefore a false positive.

You can disable double-payment alerts by:
  • Going to Settings > Advanced
  • Checking this option



=============== Without Deductions Plan Setup ===============

Start with the guidelines in this article. 

Plan Period
You should create your plan as a monthly plan (not quarterly or one-off). We will use an advanced option to ensure the start date is always the quarter start date.



YTD Advanced Option
You should use an advanced option to indicate attainment is QTD.  
  1. Edit your commission plan
  2. Go to the Calculations tab
  3. In advanced options, add this



With this in place, when running a calculation for February 1 to February 29, Sales Cookie understands we need to scan transactions from January 1 to February 29. No deductions will be applied for previous QTD calculations within the same quarter.

Selecting In-Period Transactions
With our configuration above, we will always scan transactions QTD. No deductions will be applied for previous QTD calculations. Therefore, when calculating per-transaction rewards, we should only process transactions within the current period.

Here is what your per-transaction formula could look like. If the transaction's date is NOT within our calculation start / end date (ex: February 1 to February 29), exit with a commission value of zero. Otherwise return 1,000 per transaction.



Sales Cookie offers a convenient equivalent shortcut. This is the exact same thing as the above. 



Cash Rewards
As mentioned previously, if you have cash rewards at certain attainment levels, the "without deduction" approach is NOT suitable. Use the "with deduction" approach instead.

=============== Configuring Quotas For QTD Plans ===============

If you used custom variables to specify quotas, the calculation's end date determines which value is effective. When running a calculation for say February 1 to February 29, Sales Cookie will replace @@Quota by the value effective for February 29 since this is the end date.

If your quarterly quotas won't change each quarter, you can simply specify one @@Quota value (understood to be a quarterly value valid for the entire year). Each monthly calculation will compare QTD attainment with the quota value you specified.

 

If you've entered one quota value per quarter, you don't need to do anything special and can use @@Quota. Each monthly calculation will compare QTD attainment with the effective quota value for the current calculation's quarter.



If you've specified monthly quota values, and your specified amounts are QTD-cumulative, you don't need to do anything special either and can also use @@Quota. Each monthly calculation will compare QTD attainment to your cumulative value for the month.



However, if you've specified monthly quota values, and your specified amounts are NOT QTD-cumulative, you do need to take some precaution. In this case, you'd probably like Sales Cookie to sum monthly quota values for you.



You may want to specify either:
  • ##Quota which will sum monthly amounts QTD
  • #+Quota which will sum monthly amounts for the entire quarter 



For example, consider this example:
  • January Quota = $8333
  • February Quota = $8333
  • March Quota = $8333

If your quota is set to ##Quota and calculate for February, the attainment goal will be $8333 x 2 (quarter-to-date). If your quota is set to #+Quota and calculate for February, the attainment goal will be $8333 x 3 (entire quarter value). Think carefully which one you want to use, and when payouts should be triggered.

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