Manufacturer Rep sales orders

As a distributor, you may direct customers to the manufacturer to purchase certain items. In this role, you serve as the manufacturer’s salesrep, and are eligible to earn commission on the products that your customer purchases directly from the manufacturer. This agreement may apply to a specific product or product line, or to sales that occur within an established territory. The manufacturer fills the order and ships the product directly to your customer. Because there is no movement of inventory from within your warehouse, there is no cost of goods sold, orders do not impact your General Ledger, and there is no tax liability.

To record orders placed with the manufacturer and track the commission you earn, you can create Manufacturer Rep orders in Sales Order Entry. A Manufacturer Rep order is a type of Direct Order transaction used to record a sale that is filled and shipped by the vendor. The order is automatically placed on hold until you receive your commission payment from the manufacturer. You release the hold in Sales Credit Release Inquiry or Sales Shipping Feedback Entry when the commission payment is received. If you use operational hold codes, we recommend you create a hold code specifically for Manufacturer Rep orders. Manufacturer Rep orders can be one of two types: either a Manufacturer Sales Order (MS), or a Total Sales Manufacturer Rep (TS) order. The TS order is used to record an order when you receive a commission report or payment from the manufacturer with no order detail and no order already exists in Distribution SX.e. TS orders are recorded against a specific product, usually set up only for Manufacturer Rep orders and associated with a warehouse. Each Manufacturer Rep order must contain at least one line item to track and calculate inside/outside sales rep commissions as well as set an amount on the order. A Total Sale Item is set up on the Product Warehouse Description Setup record to automatically default when selecting to use a Total Sales manufacturer order.

Note: Because Manufacturer Rep orders do not represent the movement of inventory through your warehouse, you cannot tie a Correction (CR) or Return Merchandise (RM) order to a Manufacturer Rep order. You are also prevented from copying a Manufacturer Rep order to an RM order.

To enable entry of the Manufacturer Rep order in Sales Order Entry, you must create a customer record in Customer Setup for the manufacturer vendor. This is much like a floorplan customer where you are reimbursed on behalf of your true customer by a third party. Select the Manufacturer Vendor option in Customer Setup to identify the customer as a manufacturer vendor and link it to an existing Vendor Setup record. This “floorplan” manufacturer customer is selected in Sales Order Entry when you identify the order as a Manufacturer Rep order. The manufacturer customer is used again in invoice processing when you record the invoice for payment of the commission to the distributor from the vendor. During Sales Entry Invoice Processing Report, your general ledger is updated with the total commission earned.

Use Sales Manufacturer Commission Setup to set up the commission rates earned on orders placed with the manufacturer vendor. These rates are used in Sales Order Entry on Manufacturer Rep orders to determine the amount of earned commission for your company. Commission rate records can be created for multiple levels where commission is applied. These include by vendor, warehouse, product, catalog, product line, product category, customer, or customer sales territory.

For each manufacturer, you can elect to pay a portion of the commission to your inside and outside salesreps. Salesrep commission can be calculated on each Manufacturer Rep order line based on a percentage of the earned commission or the sales amount of the line item. You can also define a specific inside and outside salesrep for each manufacturer customer. The inside and outside salesrep commission rates are applied according to the existing Sales Commission Setup rates based on salesrep and commission target type. You can run SM Commission Report to determine the commission that is owed to your inside and outside salesreps.

When the commission payment is recorded in Customer Cash Receipt Entry, your GL is updated to properly record the commission received.

Note: Manufacturer Rep orders cannot be created by importing or updating records from a third-party application. They are also excluded from the Shipment and AdvanceShipNotice BODs sent to ION.