In a plan element, you can modify the incentive amounts by using accelerators, as well as transaction factors and other factors. You define the effective period for these temporary changes by assigning a Start Date and an End Date. Accelerators increase compensation during that time period, and can be used as incentives for resources.
Transaction factors stage sales credit over the life of a sale.
Accelerators
For each product, at plan element level, you can define accelerators. Oracle Incentive Compensation provides two types of accelerators:
• Earnings Factor: Increases the resource's commission payment without affecting the level of quota achievement
• Multiplier: Increases a resource's quota credit, that is, level of quota achievement When you want to provide an incentive without affecting a resource's quota
achievement, you can define an earnings factor. The earnings factor is a percentage factor multiplied against the net sales credit, resulting in compensation credit. The application then applies the compensation rate to this compensation credit to calculate the compensation. Thus, an earnings factor results in a higher or lower compensation amount but no change in quota achievement.
For example, an earnings factor of 200 has been put onto the eligible product of LIC-DB compensation plans for field resources to promote sales of this type of license. When Salesrep A sells something with the eligible product of LIC-DB, the application takes the transaction amount and calculates the amount of sales credit due to Salesrep A. As an example, the net sales credit is $1,000. The earnings factor of 200 (200%) is multiplied against this amount to get to the total compensation amount due to Salesrep A, which is
$2,000.
How the accelerators and transaction factors are used depends on how your calculation expression is defined. For example, a common input expression that complements a percentage rate table is as follows:
EVENT_FACTOR* MULTIPLIER*TRANSACTION_AMOUNT/TARGET.
A typical output expression looks like this:
Rate_ Result* TRANSACTION_AMOUNT* EVENT_FACTOR* EARNINGS_FACTOR.
A multiplier enables a resource to reach higher levels of quota achievement more quickly, resulting in higher compensation payments. This is because Oracle Incentive Compensation uses quota achievement to determine which rate to use.
An earnings factor or a multiplier is a percentage expressed as a whole number. If you explicitly choose to use an earnings factor or multiplier in an expression, the default value is zero. You must assign a specific value for earnings factors or multipliers. For example, an earnings factor of 200 means to multiply the commission amount by 200%
or a factor of 2 (as in the above examples). A multiplier of 50 multiplies the values in the expression by .5, effectively cutting the final amount in half.
Earnings factors work only when they are used in the calculation output expression assigned to the formula. For example:
• (Rate Table Result*Transaction_Amount)*Earnings_Factor
Multipliers work only when they are used by the calculation input expression assigned to the formula. For example:
• (Transaction_Amount*Multiplier)/Target
Earnings factors can only be used when the Apply Transaction Type is set to
Individually as they apply to each individual eligible product. Earnings factors have no meaning if the Apply Transaction Type is set to Group by Interval.
Transaction Factors
Transaction factors help you stage sales credit over the life of a sale, assigning percentages of the transaction amount to important events in the sales process, including Invoice, Order, and Payment.
Transaction factors must add up to 100%. For example, you can have 50% of the commission calculated upon order, 20% calculated at invoice value and the final 30%
calculated upon payment.
Other factors are used to indicate if any activity related to a sale, such as a credit memo or order return, should be credited at a percentage other than 100%:
• Clawback: When the invoice due date grace period is exceeded, the outstanding amount of compensation credited for this sale is taken back.
• Credit Memo: A credit memo is generated when an invoice is fully or partially reversed and posted to Oracle General Ledger. Credit memos are later collected and applied against transactions.
• Deposit
• Debit Memo: A debit memo is generated to fully or partially increase an invoice. It is posted to Oracle General Ledger. Debit memos are later collected and applied against transactions.
• Giveback: If an invoice for which a clawback has been performed is subsequently paid, then a giveback is used to restore credit to a resource.
• Manual Transaction: A transaction created by a user to reverse or change sales credit.
• Order Return
• Write-off: A sale is written off the books for a variety of reasons and posted to Oracle General Ledger.
Unlike transaction factors, other factors are each calculated separately, and do not need to total 100%. Each can be over or under 100%. For example, you can set the other factor of Order Return to be credited at 80%, or clawbacks at 110% to match your business procedures.
Eligible products must already be assigned.
Navigation
Plan Administrator > Maintain Component Library > Plan Elements> Assign Eligible Products > Update Factors
Notes
• For accelerators, the default is 100, which is the full amount. Entries can be above or below 100.
• For transaction factors, you can enter numbers to indicate how you want to stage the payment of commission.
• In the Other Factors area, the default entry for each column is 100.