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Credit Rules

Objective

After completing this lesson, you will be able to create a direct and indirect credit rule

Credit Rules

Credit Rules answer the question "who is getting credit for this transaction?". Using the information we put in the rule, each transaction is analyzed, and a credit is created for each Position Assignment and period.

Direct Credit Rules

Credit rules can be Direct or Indirect. We’ll start with direct credit rules, which allocate credits to position assignments, originating from a transaction.

Let’s look at an example. Say that transaction 1618 has a date of January 12, 2022 and is preassigned to Position Assignment SR-C2 (Sales Rep Central - Joyce Fisher). When creating the credit rule, we would indicate that the transaction has been preassigned. This tells the system to find the name of the preassigned payee, create a new credit, allocate the credit to the payee, and designate the period as January 2022.

The following image shows how the credit rule is set to retrieve preassigned payees, and where to find this information in the transaction.

Another way direct credits can be created is by using the territory we created in Unit 3. When using a territory, the transaction is not pre-allocated to a payee; instead, the rule looks at other information, such as the product or geographic region, to determine who gets the credit.

Advanced Options

The Advanced Options section of the credit output allows you to select optional settings for the credit. This includes Holds, Duplication Formula, and Rollup Credits.

Hold

By default, credits are released immediately. The Hold option allows you to place a hold on a credit until a specific period, a specific period type, or indefinitely until the credit is manually released.

Rollup Credits

If you make a credit rollable, ("Rollup Credits") the credit is able to roll in the direction you define in the indirect credit rule. It will roll as far as permissible up the reporting hierarchy or roll type hierarchy you defined. This is done by checking the Rollup Credits box in the credit output. We will learn more about rolled, or indirect, credits shortly.

Duplication Formula

The Duplication Formula is an expression that allows you to determine whether duplicate credits are allowed. A duplicate credit is a credit generated from the same transaction for a given Position Assignment, period, and credit type. When creating indirect credit rules, in some circumstances you may wish to allow duplicate credits. If so, change the setting to allow duplicates from FALSE to TRUE.

Exercise: Create a Direct Credit Rule

Business Example

In this exercise, you will create a new Credit Rule that uses a Territory to assign Credits to our Sales Reps. Because our two Sales Reps have different sales Territories, you will use a Territory Variable as a placeholder, allowing us to use a single rule.

ExerciseStart Exercise

Steps

From the Plans Wizard workspace select the 2023 Sales Representative Plan.
Select the Edit icon in the Plan Details pane toolbar.
Select Credit Rule and then select Create New Rule.
Select Credit based on an individual transaction under "What Kind of Credit Rule do you want to create?"
Type DCR_Sales_Credits for the Name.
Select Next.
Leave "Are there any conditions that need to be met?" blank.
Select Next.
Select the Editor window under Credit if they have the following Territory.
In the first placeholder, use the following steps to reference the Territory Variable:
Type ref and select Reference: Territory Variable.
Type TV_ after the colon.
Select TV_Sales_Territory.
Select Next.
Edit the Credit Output by selecting Edit Credit Amount.
Change the Output Name to DC_Sales Credits.
Select Revenue for the Credit Type.
Verify the Amount is set to Transaction.Value.
Change the Display Name for Reports to My Sales Credits.
Click Next.
Select Finish to save the rule.

Indirect Credit Rules

Now that we’ve seen how direct credit rules allocate credits to payees based on transactions, let’s turn our attention to indirect, or rolled, credit rules.

Indirect credit rules allow us to allocate credits to payees who are not directly involved in a sale, but who have a working relationship with a payee who is. The most common example of a recipient of an indirect credit is a sales manager, who is compensated based on the performance of their team. Custom roll relationships can also be created in the Relationships workspace to define relationships between other positions.

Example 1: Bikes In Motion wants to reward sales managers and the Vice President of Sales by paying a quarterly bonus if all Sales Representatives meet their quotas. The reporting relationship is maintained by populating the Manager field on each Sales Rep’s Position record; this way, we know who reports to whom.

Example 2: The Account Executives are supported by a team of Sales Engineers. Each Sales Engineer receives a commission based on the performance of their assigned Account Executives. Custom roll relationships define the relationship between each Account Executive to their assigned Sales Engineer, and the credit rule will reference the custom roll type.

To create an indirect credit rule:

On the Rule Basics tab, select Credit Based on a rolled Transaction Credit.
Note
The name now starts with "ICR", short for Indirect Credit Rule.
On the Credits tab, check the Rolling Through box.
In the field below, select the roll type. To roll credits using the reporting hierarchy, select Reporting.
On the Credit Amount tab, select a Credit Type. In this case, we selected Source Credit.
Set the amount to Source Credit.Value. Source Credit tells the rule to retrieve credits from source positions based on the reporting hierarchy. You can also customize the output amount using formulas or other input.

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