Handling Cap Changes

There are occasions where it is necessary to adjust an associate's cap for the current year and then have the cap amount reset on the associate's anniversary. CommandMC is designed to handle temporary cap reductions and increases, and then reset the cap amount when the Associate moves into a new anniversary year.

Some situations that might apply would be:

1. Associate transfers to a new Market Center and is given credit for the amount of company dollar and royalty paid in the prior Market Center.
2. Associate is cap managed and given a number of months with no company dollar taken.
3. Associate is on a team and the team members receive a reduced cap each year.
4. The Market Center is approved for a reduction in their default company dollar cap.

Associate Record - Cap and Split

There are two fields for associate cap and split (for both Company Dollar and Royalty) on the Associate Record (Business Tab).

The Company Dollar on the left shows:

• the Anniversary Date
• Split Percentage
• Cap Amount
• Amounts paid versus remaining balance

The Royalty on the right shows:

• Anniversary date
• Base Royalty Rate
• Total GCI subject to Royalty
• GCI paid on
• Remaining balance 

The system will review every Associate's record that is beginning a new anniversary year in the current month and and will set the current year cap to the Market Center default amount. However, if there is a value entered in the Next Period Company Dollar Cap field, that value will be used as the Company Dollar cap for that associate for their current anniversary year. 

Example 1: Cap Management

An associate joins in July and is cap managed to an anniversary date of November. When the associate joins, edit their caps and splits. Enter 0.00 in the Current Company Dollar Cap field, leave the Next Period Company Dollar Cap field as the default, and select the month that's been agreed for them to start paying cap in the Company Dollar Anniversary Date field.

After the October Month End Close, the the cap amount will automatically change from 0.00 to the Market Center standard cap, unless you entered a different amount in the Next Period Company Dollar Cap field.

Example 2: Shared Caps and Transfer

A couple transfers from Market Center A to Market Center B, where they split their production equally. They reached their cap before they transferred. In this case, their caps would be set to 0 since they paid the full cap at the prior Market Center; the MCA must receive both associates' Royalty Anniversary Report (with detail) to confirm this or KWRI will not be able to approve an adjustment. In the CAP defaults, 1/2 cap would be entered for each associate since they share a cap and split their production equally.

In this example: The Market Center B standard cap is $20,000 and the royalty base is the standard $50,000. 

Example 3: Team Member with Reduced Company Dollar Cap

When an associate joins a team in a Market Center whose policy is to grant team members 1/2 Company Dollar caps, the Company Dollar Cap field in the associate's record needs to be entered to reflect the half cap. In this example, the team member's cap is half of the standard $20,000 Company Dollar cap for this Market Center.

Example 4: Team Member with Increased Company Dollar Cap

There may be instances where you increase an agents cap.  To do so, adjust the Company Dollar cap field (if the new cap amount is different than the standard).

For example when an agent leaves a team. While on the team the agent had a 1/2 cap of 5000. Leaving the team the cap becomes 10,000. Adjust the Company Dollar cap to 10,000 and enter the same in the cap default only if the amount is different than the standard cap and must stay at this amount when the agent enters a new Anniversary year.