Selling on behalf of represented companies (no warehouse, not delivering nor invoicing the buyer)

[Fez]

Hello to everyone,

My company is a sale representative of many international vendors. We sell products on behalf of the companies we represent, even if we do not deal directly with the goods.
We only provide the sale service, not the delivery of the products, which is managed by the represented vendors. We do not buy or produce any product. We do not issue any invoice to the products buyers (as it is issued by the vendors).
For each order we place we get a commission from the represented vendor we sold the good on behalf of. The commission is based on the invoice issued by the vendor to the customer.

Given what above, to run this business model we need to manage all the following:

• the represented vendors as our real customers
• each customer of the represented vendors as buyers of the sold products, but not as a real customer of us
• all the products sold by each vendor (full product inventory)
• recording of all the orders and deliveries of the vendors, exactly as those were ours, to match the selling invoice (which we get) issued by the vendor to the buyer
• calculating our commissions based on quantities or values sold by each represented vendor
• issue our invoices to the represented vendors as they are the users of our sale services (i.e. our customers).

We are looking for an ERP suitable for our needs and came across ERPNext.
We are wondering if it could be a solution, but we have many doubts we can make it work as we desire.

Any suggestion/help greatly appreciated.

[rtdany10]

I think you can utilize multi-company for this. For each supplier, create a company and manage their order, delivery, invoicing etc from those companies and at the end of the month, based on the sales, create a sales invoice from your company.

This way, you can manage and replicate vendor’s order and also get accurate data to raise invoice for yourself as well.

[Fez]

Hi rtdany10 and thanks for your reply. I’ll try installing and testing ERPNext following your advice and will get back to you with my feedback.

[volkswagner]

Regarding Items. Be sure to turn off “Maintain Stock” for all items. You can customize the Item docType and set the default value as false for Maintain Stock.

Will you be handling payment processing (how will product customers mark invoice as paid)?

Your commission could be calculated at the sales invoice level. Consider making your company an “Employee or Contractor” of each of the represented companies.

[Fez]

I installed and configured ERPNext v15 and populated it with a minimal set of users, companies, items, and customers.
Set up my company as well as the companies we act as agents for, and simulated some quotes and sales order (company A → customer 1, company B → customer 2, and so on) and relevant sales invoices.

@rtdany10

This way, you can manage and replicate vendor’s order and also get accurate data to raise invoice for yourself as well.

I get stuck when it comes to raise my commission invoice.

I did not find any way to raise a commissions invoice, except to handling as my customers both customers (1, 2, etc) and the companies (A, B, etc).

Furthermore we work with commissions set per item, depending on its type (raw material or finished product and other items parameters). I noticed that in ERPNext commissions are at order (or agent) level, i.e. equals for all items in the order.

[zerodiscount]

This is not a simple request and I think you will run into the following accounting issues…. The sales from Vendor to Buyer are not yours - and the payments they make are also not to your bank accounts. The inventory ships directly from vendor to buyer - so also never belonged to you - so accounting for them on your company books is likely not permitted. I would suggest to consult an accountant. In order to create inventory asset with some value in accounting - you will need to also create a corresponding liability (accounts payable)…. Creating separate companies may resolve that issue - but they need to be separate from your company invoices. For your company - you can create Multiple Commissions as non-stock service items with different selling prices (think commission rates); Invoice the Vendor (your customer) using their sales invoice as qty and the commission rate as a price…this will generate the right invoice amount, receivable and can post your bank receipts as payment entries to account for it…

Hypothetical - wondering if this is even possible…

If you just want to track sales units of items to buyers - you may try to create these items as service (non stock) with minimal value - say 0.01 and then say create sales to buyers and purchase at same value from supplier - zero income on books…you can get creative and add a negative purchase price (equal to commission per item) - creating a negative payable (receivable) from supplier…You may need to change the default payable account associated with this purchase to be on the asset side (accounts receivable) and checkmark accounting option to treat customer as supplier as well… Dont know if this is even possible / likely not permitted …

[Fez]

Thanks for your help.

@volkswagner

Regarding Items. Be sure to turn off “Maintain Stock” for all items

“Maintain Stock” is set off for all items.

@volkswagner

Your commission could be calculated at the sales invoice level.

Our commissions must at item level, depending on item type (raw material or finished product and other items parameters).

@volkswagner

Consider making your company an “Employee or Contractor” of each of the represented companies.

I did not find a way to set a company as an “Employee or Contractor” (only persons can be set as employee). I noticed that it is possible to set a “Sales partner” and select its type, with only one commission rate allowed for each partner. In this way for each represented company I could replicate my company as partner as many times as the used commission rates. Nevertheless the commission would not be at item level, which I need.

[Fez]

Thanks so much for your suggestions.

We are aware exactly of all what you mentioned. We are managing fairly well any matters of this business model since more than 25 years, with a sort of “custom made application”, developed inside the company​ and adjusted over the years, as a cloth tailored on our needs.
Since it is a system coming from a past era, like 25 years are in IT, and even if we manage to keep it up to date with ​more adjustments and enhancements at the best we can, it’s lacking of some significant functionality. We don’t want to develop a new one from scratch and this is the reason why we are searching for a ready to use replacement.

We sell the items of other companies and we act as broker so:

• we do not handle a warehouse since we do not buy or sell items
• we do not handle the accounting of the items vendors
• we do not handle the accounting of the items buyers

With our system we ​h​andle items, suppliers, and customers as follows:

• we keep the inventory of all items sold from suppliers to customers, included item commission agreed with the supplier
• we record in full the orders between vendor and buyer​
• ​at the end of the month we calculate our commissions (based on quantity and price) for each item of each order and raise invoices to our customer​s (the vendors).

In our system we do not handle accounting records. Our commission invoices are calculated and raised with our system, but our accountancy is handled outside it.
This way we have to import only our invoices in a different system, while we can monitor sales trends and carry out a management control on turnover.

What would be useful for us is a ready to use system where we can do the same, without engaging any accounting ledgers.

The solution you suggested, assuming it works, seems to me like to force a working flow in a system that was not created to manage it. I’m afraid it is rather complex to be managed in a useful way.

[asieftejani]

Under company → Stock and Manufacturing → disable “Enable Perpetual Inventory”
According to ChatGPT stock will be tracked but no accounting will be done

[zerodiscount]

You should fund the development of a “Broker” mode / app (Frappe Broker)… Since your actual company accounting is taking place offline - you can implement something ERP - that will allow you to track things effectively. Create Items, Customers and Suppliers and hypothetical bank accounts linked to each supplier - as needed. Create sales invoices for shipments of items to customers and Purchases of those items from linked suppliers - you can create a linked invoice to supplier for commission. This will allow you to track shipments to customers, receivables of your vendors and post payment entries to the hypothetical bank accounts - helping you even track payments made by customers (if you help with collection)… You may also be able to add customs duties and other taxes… The data you generate can then be useful to analyze sales, trends, CRM, etc… ERP accounting is rigid (as should be) but its utility & workflows are flexible / powerful… some customization may be needed. For example - auto creation of PO to supplier upon submitting a sales order (posting a PO from customer). Attaching customer PO to sales order, supplier invoice to sales invoice - allows you to create an organized repository of documents. You are on the right track.

[rtdany10]

@Fez

I get stuck when it comes to raise my commission invoice.

I did not find any way to raise a commissions invoice, except to handling as my customers both customers (1, 2, etc) and the companies (A, B, etc).

I didn’t understand the issue here. Can you elaborate please?

[asieftejani]

From ChatGPT (note sometimes it gets it wrong - hallunicates)

That’s a perfect and insightful question — and it fits a very interesting niche business model that’s often called “sales agency” or “commission-based representation.”

ERPNext can handle your case quite well, but it needs a few custom configurations because, by default, ERPNext assumes you are the seller of goods, not just an intermediary. Let’s break it down carefully.

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Your Business Model

You:

• Don’t own or deliver products.

• Don’t invoice end customers.

• Act as a sales intermediary.

• Earn commissions from vendors based on actual sales.

So ERPNext must track:

1. Vendors (the companies you represent)

2. Their buyers (as “buyers,” not your real customers)

3. Orders and deliveries (for tracking, not accounting)

4. Commission calculations and your service invoices

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How ERPNext Can Be Configured

1. Represented Vendors → Your “Customers”

Treat each vendor (the brand or manufacturer you represent) as your Customer in ERPNext.
Why? Because you ultimately invoice them for your commission.

You can even create a Customer Group = “Represented Vendors” to keep them organized.

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2. Buyers → “End Customers” Linked to Vendors

Treat the actual product buyers as Contacts or Linked Buyers under each represented vendor.
You have several options:

• Use Contact and Address linked to the represented vendor.

• Or create a custom doctype like “Buyer” linked to “Vendor.”

This way, you can track who bought what, without them being true customers in your accounting.

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3. Products → Vendor Products

You can import each vendor’s catalog into ERPNext:

• Create Item Group per Vendor (e.g. “Sony Products,” “Bosch Tools”).

• You don’t need to manage stock — just uncheck “Maintain Stock” on each item.

That lets you record orders without inventory implications.

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4. Orders and Deliveries → Track as “Sales Orders” & “Delivery Notes”

You can record vendor-side transactions purely for tracking:

• Sales Order: Represents the buyer’s order to the vendor.

  • You can link it to both the represented vendor (your “customer”) and the buyer via a custom field.

  • It’s only for reference — no GL impact.

• Delivery Note / Invoice (Vendor’s): You can record the vendor’s invoice data (invoice no., amount, buyer, etc.) in ERPNext via a custom doctype like “Vendor Sale Record.”

That document will be the base for your commission calculation.

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5. Commission Calculation

ERPNext already supports Sales Partner Commission, but that’s usually from your sales invoices.

In your case, you need a reverse version:

• You’re the Sales Partner, and the vendor’s sales define your commission.

So:

• You can use the Sales Partner doctype to define commission rates (by item, quantity, or value).

• Then create a custom script or report that:

  • Reads vendor invoice data (from your custom doctype),

  • Calculates your commission,

  • Creates a Sales Invoice (your invoice to the vendor).

This is straightforward with a Server Script or Custom App.

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6. Your Commission Invoice

Finally, you issue a Sales Invoice in ERPNext to the represented vendor:

• Item: “Sales Commission for [Month/Buyer/Product]”

• Based on your calculated totals

• Standard accounting applies here (you can track income by vendor)

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Example Flow

Step	Real-world Action	ERPNext Equivalent
Buyer orders product from Vendor	Record as Sales Order (tracking only)	“Sales Order” with custom field “Buyer”
Vendor delivers goods	Record vendor’s Delivery Note or Invoice	Custom Doctype “Vendor Invoice”
Commission due to you	Commission Calculation Report	Custom script/report
You invoice vendor	ERPNext Sales Invoice	Normal invoice

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Optional Automation

• Custom Script: Automatically generate commission invoices monthly.

• Report: Total vendor sales, total commissions due.

• Dashboard: Sales by represented vendor, top buyers, commission trends.

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Summary

Feature	ERPNext Support	Notes
Vendor management		Use as “Customers”
Buyer tracking		As Contacts or custom doctype
Product catalog		No stock needed
Order/delivery tracking		Non-accounting entries
Commission calculation	Custom script/report	Straightforward to automate
Commission invoicing		Standard ERPNext feature

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Bottom Line

ERPNext can handle your entire process cleanly with light customization, without hacking the core.

If you want, I can show you a practical prototype configuration — step-by-step — that fits exactly your case (e.g., doctypes, custom fields, and naming setup).
Would you like me to outline that next?