Line rates and margin pools

Distributors often pay a different rate on every line: a higher rate when the document's margin on a product line is good, a lower one when it is thin, and a fixed rate for a few named items. The Line Rate model pays each credited line at its own rate, either from a rate table keyed on a captured value such as the product line, or from margin bands chosen on a margin pool of the document. This page shows you how to set up a Line Rate component, how margin pools are formed, and what happens when a line finds no rate.

Before you start

• Turn on the Advanced commission models module. Line Rate is offered in the Model field only when it is on. See Optional modules.
• You need the Bitta Commission Plan Designer permission set and a plan with a Draft version. See Commission plans.
• Margin bands need a cost on every item line. See Commission costs.

How Line Rate pays

A Line Rate component calculates each credited line on its own and adds the results up:

• When a Set Rate credit rule matches the line, the rule's rate applies. See Customer agreements.
• Otherwise the line takes the plan rate from the component's rate table: the margin band its pool falls in, the row for its value, or one flat rate.

Line Rate pays each line at its own rate and cannot carry hurdles, caps, floors, weights, gates, pairs, accelerators or end-dating. A component with any of them is refused with BAACOMM-PUB-CALC-LINE-RATE-001.

Set up a Line Rate component

1. On Commission Components of the Draft version, add or edit a component. On Edit Commission Component, set Model to Line Rate.
2. In the Modifiers group, set how the rate is chosen:

Field	What to enter
Band Basis	Document Margin % to pick the rate from margin bands. Each line then takes the highest band whose From is at or below its pool margin. The first band may be negative or open below. With the default Amount, the line takes its row on the rate table, or one flat rate.
Pool Attribute Path	The source attribute that groups the lines of a document into margin pools, for example SRC:DIMENSION:PRODUCTLINE or SRC:ATTRIBUTE:BRAND. Leave it empty to make the whole document one pool.

3. Select the component and choose Rates. On Commission Rates, fill in the rate table (see below).
4. Choose Save Rates.

Fill in the rate table

On Commission Rates, set how the table is read:

Field	What to enter
Rate Dimension	What the rows are matched on: Currency, Country/Region, Participant Type or Source Attribute. A Line Rate component uses Source Attribute.
Rate Attribute Path	Shown for the source attribute dimension. The captured value the rows are matched on, for example SRC:DIMENSION:PRODUCTLINE or SRC:ATTRIBUTE:BRAND.
No-Match Handling	What happens when a line finds no row or band. Error stops the calculation. Zero Rate With Exception pays the line 0 percent and raises an exception. A deliberate 0 percent row is never treated as a missing match.

Then add one row per value or band:

Column	What to enter
Dimension Value	The value the row applies to, for example the product line code. Leave it blank for the rows that apply to every other value.
Open Lower Bound	Select it for the first margin band, so it covers every margin below its upper bound, including negative margins.
From, To	The Document Margin % range of the band.
Open Upper Bound	Select it for the last band, so it covers every higher margin.
Rate %	The rate paid on a line in this row or band.

A distributor pays on the margin of each product line in a document:

Band	Document Margin %	Rate %
1	Below 10, open lower bound	1.00
2	From 10 to 25	3.00
3	From 25, open upper bound	5.00

How a margin pool is formed

With margin bands, the lines of one posted document are grouped into pools by the Pool Attribute Path value:

• A pool holds the sibling lines of the same posted document with the same pool value that the component credits. A line priced by a Set Rate rule stays in its pool.
• The pool revenue is the net amount after any Deduct From Base deductions. The pool cost is read with the measure's cost basis.
• The pool margin is (revenue - cost) / revenue x 100, and 0 for a pool without revenue.
• Every line of the pool takes the band its pool margin falls in.

Lines without a value on the pool path share one pool. A linked return is priced like the line it returns: it takes the rate, rate source, pool and band of the original earning. When the original sale never earned, it is priced on the pool of the original document.

When a line finds no rate

With No-Match Handling set to Error, a line without a matching row or band stops the calculation. The error tells you whether a band or a row for a value is missing: add a lower first band, open it below, or add the missing row.

With Zero Rate With Exception, the line is paid 0 percent and a warning is raised on Commission Exceptions: "Line %2 of document %1 was paid a zero rate (%3). Add the missing rate row, margin band or commission cost, then correct the earning." See Exception handling.

The Commission Exception Report also lists item invoice lines without any cost and earnings paid without a rate.

See the rate of a line

On the Commission Earning card, the Calculation Details group shows:

• Rate Source: what set the rate, the Set Rate rule, the margin band or the flat rate.
• Pool Key: the margin pool the line was priced in.
• Pool Margin %: the margin of that pool.

The Commission Earnings list has the same fields, hidden by default. Choose Why This Rate? on either page for the full explanation. See Why this rate?.

On open sales quotes, orders and invoices, the Estimated Commission FactBox estimates the same rates before posting. Choose Line Estimates to open Commission Line Estimates, which shows for each line its Pool Key, Pool Margin %, Band Row No., Plan Rate %, Rate % and Rate Source. The estimate credits the line salesperson, else the document salesperson, as posted capture does. See Estimated commission.

What's next

Give every item the cost its margin is read from: Commission costs.