Accrue commission in the general ledger

By default, nothing is posted to the general ledger when commission is earned. Turn on G/L accrual to post commission expense when it is earned and clear it when it is paid, so your books show what you owe your salespeople at month-end.

Turn on accrual

On Commission Setup, in the G/L Accrual group:

1. Turn on Accrue in G/L.
2. Choose the Accrued Commission Account, a balance sheet account.
3. Enter the Accrual Starting Date. It must be after the last posted settlement.
4. Optionally choose a Payroll Clearing Account (see below).

Accrual uses the Commission Expense Account and the Accrued Commission Account.

Post the accrual

Choose Post Commission Accrual on the role center, or schedule it in the job queue. It posts the commission earned since the last run, summed per posting date and dimensions:

• Debit Commission Expense Account, credit Accrued Commission Account.
• Credit memos, netting and reversals post the opposite.

Posting a settlement runs the accrual first.

When commission is paid

The part that was accrued is posted back: debit Accrued Commission Account, credit Commission Expense Account.

• For a purchase invoice this happens when you post the invoice, in the same transaction.
• For payroll and outside Business Central, it happens when you post the settlement.

Example: Maya earns 27.45 on 10 November. The accrual posts debit Expense 27.45, credit Accrued 27.45. The settlement's purchase invoice posts debit Expense 27.45, credit Vendor 27.45, and with it debit Accrued 27.45, credit Expense 27.45. In the end, expense is 27.45 and accrued is 0.00.

Payroll and outside payments

For Payroll and Outside Business Central payments, the clearing leaves the expense at zero, because the system that pays books the expense itself. If your payroll system books against a clearing account instead, enter it as the Payroll Clearing Account. Payroll payments then post debit Accrued Commission, credit Payroll Clearing, and the expense stays as accrued.

Good to know

• Only commission posted on or after the Accrual Starting Date is accrued. What was accrued is always cleared when it is paid, even if you turn accrual off later.
• Reversing a settlement or crediting its purchase invoice puts the accrual back.
• Commission Dtld. Entries shows G/L Accrued, Accrual Cleared (LCY) and Accrual Clearing Posted when accrual is on.