Customer agreements

Many distributors sell to stores that are billed through a buying group or head office, and pay commission on less than the invoice: the group takes a rebate, or a free-freight allowance comes off the sale. Bitta Commission handles this with two credit rule outcomes, Deduct From Base and Set Rate, and a Customer Agreements page that maintains both rules for each bill-to customer. This page shows you how each outcome works, how to set up an agreement, and how named value lists and standard exclusions keep your rules short.

Before you start

• You need the Bitta Commission Plan Designer permission set and a plan with a Draft version. Credit rules and agreements change only while the plan version is Draft, and they are approved and versioned with the plan. See Commission plans.
• Credit rules are maintained on Component Crediting Setup, opened from Component Crediting Rules. See Crediting and splits.
• Set Rate rules need a component with the Line Rate model, which needs the Advanced commission models module. On any other model, plan validation reports that the model does not price each line. Deduct From Base works with the Net Amount and Gross Margin measures and with Line Rate margin pools. See Line rates and margin pools.

Credit rule outcomes

A credit rule has one of four outcomes. They form three separate families, and Stop Processing only stops later rules of the same family.

Outcome	Family	What it does
Include, Exclude	Inclusion	Decides whether the component credits the line. The winning rule decides.
Set Rate	Rate	Sets the commission rate of a credited line. The first matching Set Rate rule that sets a rate wins.
Deduct From Base	Deduction	Reduces the commissionable base of a credited line. Every matching deduction applies, and together they deduct at most 100 percent. A deduction never excludes a line.

The rate and deduction columns on Credit Rules appear only when the component uses those outcomes.

Deduct from the commissionable base

A deduction lowers the amount commission is calculated on, without changing the customer's invoice. Give a Deduct From Base rule one of these two fields, otherwise it is refused with BAA-CRD-DEDUCTION:

Field	What it does
Deduction %	The percentage deducted from the commissionable base of the line.
Deduction Attribute Code	A captured decimal source attribute that supplies the percentage per line, for example a free-freight percent a companion app supplies at capture. When the line has no such attribute, Deduction % is used.

The deduction applies to the Net Amount measure, to the revenue of the Gross Margin measure (deducted net amount minus cost), and to the revenue of a Line Rate margin pool, so the margin band is chosen on the deducted revenue.

A store is billed through a buying group with a 6 percent rebate agreement, and its order also qualifies for a 5 percent free-freight allowance. For a 1,000.00 line with a cost of 500.00:

Step	Amount
Invoice line	1,000.00
Deductions: 6% + 5% = 11%, taken off once	-110.00
Commissionable amount	890.00
Margin on the deducted revenue: (890 - 500) / 890	43.82%

The 43.82 percent margin then selects the margin band. Without the deductions the margin would be 50 percent and a higher band could apply. The customer's invoice stays 1,000.00.

Set the rate with a rate waterfall

On a Line Rate component, Set Rate rules form a waterfall. They are ranked by the component's Precedence, and the first matching rule that sets a rate wins. When no Set Rate rule matches, the line keeps the plan rate: its margin band or the flat rate.

Field	What it does
Rate %	The rate the rule gives the line.
Rate Basis	How the rule uses its rate (see below).
Rate Attribute Code	Optional. A captured decimal source attribute that supplies the rate per line, such as DOC-RATE-OVERRIDE-PCT for a per-document rate override. When the line has no such attribute, Rate % is used.

Rate Basis	Result
Fixed	Always the rule's Rate %.
Higher Of Rest	The higher of the rule's rate and the rate the rest of the waterfall gives: the next matching Set Rate rule, or the plan rate when there is none.
Lower Of Rest	The lower of the two.
Use Plan Rate	The rule sets no rate. The next matching Set Rate rule decides, and only then the plan rate.

The winning rule is recorded as the line's Rate Source. A Use Plan Rate rule is never the rate source, because it did not set the rate. Two matching Set Rate rules with the same priority and specificity but a different rate or rate basis stop the calculation with BAACOMM-PUB-CREDIT-RULE-TIE-002: create a successor version and change a priority or a condition.

A typical waterfall, lowest priority number first:

1. The bill-to agreement of a buying group.
2. Customer and item.
3. Customer.
4. Item, for every customer.
5. The plan rate: the margin band or the flat rate.

A store has its own 12 percent customer rule and is billed to a buying group whose agreement has a 10 percent rate:

Agreement Rate Basis	Line rate
Fixed	10%
Higher Of Rest	12%
Lower Of Rest	10%
Use Plan Rate	12%, from the store's own rule

Set up a customer agreement

Customer Agreements maintains a Set Rate rule and a Deduct From Base rule for each bill-to customer, so you do not build them by hand.

1. On Component Crediting Setup of a Draft component, choose Customer Agreements in the Credit Rules part. You can also search for Customer Agreements; a new agreement then needs its Plan Version and Component.
2. Create an agreement. On Customer Agreement, fill in the General and Terms groups:

Field	What to enter
Bill-to Customer No.	The customer that is billed on behalf of other sell-to customers, for example a buying group.
Description	A note, such as the contract reference.
Starting Date, Ending Date	The posting dates the agreement applies to. Leave Ending Date blank for an open-ended agreement. Agreements of one bill-to customer on a component cannot overlap (BAA-CRD-AGREEMENT-OVERLAP).
Rate Basis	Fixed, Higher Of Rest, Lower Of Rest or Use Plan Rate, as above.
Fixed Rate %	The rate the agreement sets. With the Fixed basis, leave it at 0 for an agreement that only deducts.
Deduction %	The deduction from the commissionable base, for example the rebate the buying group receives. Leave it at 0 for no deduction.
Priority	The priority of the generated rules. Lower numbers are evaluated first. The default is 10.

3. Close the card. Saving creates or updates the rules, and the Generated Credit Rules group shows their codes: AGR followed by the agreement number, with -RATE and -DEDUCT.

Both generated rules carry the conditions Bill-to Customer No. equals the customer and Bill-to Differs equals Yes. An agreement therefore applies only when the bill-to customer differs from the sell-to customer: a store invoiced directly gets no agreement rate and no deduction.

• Without a rate (Use Plan Rate, or Fixed at 0) the agreement creates no Set Rate rule, only the deduction.
• With a Deduction % of 0 it creates no deduction rule.
• The generated rules cannot be changed or deleted directly. Change or delete the agreement instead (BAA-CRD-AGREEMENT-RULE).
• A successor plan version copies the agreements with their rules. When the successor starts exactly one year after its predecessor, the agreement dates move one year.

Named value lists

When the same list of codes appears in many rules, for example the tariff and handling items that never earn, keep it in one place.

1. Search for Commission Value Lists and create a list with a Code and Description.
2. Choose Values and enter one value per line, written as you would in Value 1 of a condition: codes as they are, numbers as 1500.00, dates as YYYY-MM-DD and yes or no values as Yes or No.
3. In a rule condition, choose the operator In Value List or Not In Value List and enter the list code in Value 1.

The values are approved with the plan. A list used by a plan version that is no longer Draft cannot change (BAA-CRD-VALUE-LIST-IN-USE): create a new list and use it in a Draft successor. A list a credit rule uses cannot be deleted. On Credit Rule Conditions, the Value Name column shows the name of the code you entered, such as the customer name or the item description.

Standard exclusions

Freight, fees and other lines posted to a G/L account are captured like any other line. Whether they earn is decided by credit rules.

A new component created in the component editor or by an industry template starts with standard exclusions for G/L account lines, item charges and fixed assets, and the setup wizard asks which lines to leave out. They are ordinary, visible credit rules (STD-EXCL-GL-LINES, STD-EXCL-ITEM-CHARGES, STD-EXCL-FIXED-ASSETS), so the component credits item and resource sales only. Templates that pay on fees keep G/L lines.

To change them, choose Add Standard Exclusions in the Credit Rules part:

• Exclude these line types: G/L Account Lines, Item Charges, Fixed Assets and Resources.
• Exclude only these G/L accounts: pick specific freight or fee accounts in G/L Accounts instead of all G/L lines.

Each choice becomes an Exclude rule, and clearing a choice removes it. While the component has no Include rule of its own, Bitta Commission also adds STD-INCLUDE-REST, which credits every line that is not excluded. Run Add Standard Exclusions again to change the generated rules; they cannot be edited directly.

Conditions you can use

Every value native capture records can be used in a credit rule condition, including:

• Bill-to Customer No. and Bill-to Differs;
• Line Type (Item, G/L Account, Resource, Fixed Asset, Charge (Item), Other) and Line Account No.;
• Order No., Reason Code, Return Reason Code and Source Code;
• Line Discount %, Inv. Discount Amount and Effective Discount %;
• Line Salesperson Code and Doc. Rate Override %;
• Ship-to Code, Ship-to Post Code and Ship-to Country/Region;
• Line Margin %: the margin of the line after discounts, with the cost known at capture (a supplied unit cost, else the dated commission cost, else the posted actual cost). It is blank when the line has no cost or a zero cost;
• Source Journal Batch: the general journal batch of an entry posted from a journal, for example a short-pay credit memo. It is blank for posted sales documents.

See Capture posted sales for what each value contains. To check how the rules treat a line, see Why this rate?.

What's next

Pay each line its own rate from margin bands and rate tables: Line rates and margin pools.