---
title: "Designer trade discount commission: how to track it honestly"
date: 2026-10-22
lang: en
url: https://archiboard.ru/blog/designer-trade-discount-commission-tracking
---

# Designer trade discount commission: how to track it honestly

To track a designer trade discount or commission honestly, record three numbers for every item (list price, your purchase price and the client price) and keep supplier commission as a separate line with its own status, from accrued to received. Decide in advance which earning model you use and how you disclose it to the client. Everything below follows from those two rules.

## Four ways a designer earns from suppliers

The words "discount", "markup" and "commission" are often mixed up, and that is where honest tracking starts to fail. They are different money flows with different owners. Before you build any spreadsheet or report, name the model you actually use on each project.

| Model | How it works | Where your income appears |
| --- | --- | --- |
| Resale at list price | You buy at the trade price and the client pays the list price | The difference between list and purchase price |
| Pass-through with markup | The client sees your purchase price plus an agreed markup | The markup, while the full trade discount stays visible |
| Shared discount | The trade discount is split between the client and the studio | Your share of the discount |
| Supplier commission | The client pays the supplier; the supplier pays you a percentage afterwards | A separate payment from the supplier, often weeks later |

These models can be mixed on one project. A fabric supplier may pay commission while a lighting brand gives you a trade price. Track by supplier and by item, not by project average.

## Set the rules before the first order

Most disputes about trade discounts come from rules that were never written down. Spend half an hour on this before you send any estimate.

1. **Choose the model per supplier.** Write down which of the four models applies to each supplier you use on the project.
2. **Fix the percentages.** Record the trade discount, your markup or your share of the discount, and the commission rate, each with its source: a price list, an email or a dealer agreement.
3. **Decide who pays whom.** Either the client pays the supplier directly, or the client pays the studio and the studio pays the supplier. This changes your cash flow and your risk, so write it into the project terms.
4. **Put it into the contract or the proposal.** State in plain words how you are paid: fee, markup, share of discount or supplier commission. Follow the disclosure rules that apply in your country and in your professional association.
5. **Agree on the report.** Tell the client what they will receive: an estimate with final prices, a payment schedule, a closing report.

### What to keep as source documents

- The supplier's trade terms or dealer confirmation, with the date
- Written confirmation of the commission rate and the payment terms for it
- The signed estimate or approval of each item by the client
- The supplier invoice and the proof of payment for every order

## Calculate honestly: one item, four models

Take one sofa as a worked example. The numbers are illustrative: list price 10,000 EUR, trade discount 30%, so the studio's purchase price is 7,000 EUR. The commission model assumes the client pays the supplier directly and the supplier pays the studio 10% of the invoice.

| Model | Client pays | Studio pays supplier | Studio earns |
| --- | --- | --- | --- |
| Resale at list price | 10,000 EUR | 7,000 EUR | 3,000 EUR |
| Pass-through, 12% markup on purchase | 7,840 EUR | 7,000 EUR | 840 EUR |
| Shared discount (client gets 20 points, studio keeps 10) | 8,000 EUR | 7,000 EUR | 1,000 EUR |
| Supplier commission, 10% | 10,000 EUR to the supplier | 0 EUR | 1,000 EUR from the supplier |

The same sofa gives the studio between 840 and 3,000 EUR, and the client pays between 7,840 and 10,000 EUR. None of these is dishonest in itself. What makes a model dishonest is hiding it from the client when your agreement says it should be visible, or mixing models so that nobody can tell where the money came from.

### Markup or margin

A 12% markup on cost is not a 12% margin on the selling price. In the example, 840 EUR on 7,840 EUR is about 10.7% margin. Pick one definition, name it in your internal reports and use it consistently. If you need a quick check of the conversion, the [markup calculator](/tools/markup-calculator) does it in a few seconds.

### Three numbers per item

1. **List price (MSRP).** The reference price the supplier publishes.
2. **Purchase price.** What you or the client actually pay the supplier after the trade discount.
3. **Client price.** What the client sees in the estimate.

If you store only the client price, you cannot later prove what the discount was. If you store only the purchase price, you cannot explain your earnings. Keep all three, and let percentages and amounts recalculate from each other so that they never drift apart.

## Track supplier commission through its full lifecycle

A trade discount is visible immediately, because it sits in the price. Commission is different: it is money owed to you that arrives later, and it is easy to forget. Treat it as a receivable with a status.

1. **Accrued.** The client has paid the supplier or the order is confirmed, so you are entitled to the commission under your agreement. Record the expected amount.
2. **Requested.** You have sent the supplier a commission invoice or a written request. Record the date.
3. **Received.** The money has arrived. Record the date and the amount, and note any difference from the expected figure.

Review the list of accrued but unrequested commissions every month. Those are the ones that most often get lost, usually when a project is finishing and everyone is busy with installation.

### Monthly commission review

- Every supplier with a commission agreement has a recorded rate
- Every paid order has an expected commission amount
- Requests older than the supplier's payment term are chased
- Cancelled or returned items have their commission adjusted
- Received amounts are compared with expected amounts, and differences are explained
- Commission is not mixed into the client's payments or the project budget

## Explain it to the client without confusion

The client should be able to answer one question after reading your documents: what did I pay, and who received it? You do not have to show every internal percentage unless your agreement requires it. You do need to make sure that nothing in the documents contradicts how you are actually paid.

- Show final prices per item and the totals per room.
- Keep purchase price, markup and profit columns out of client documents unless the agreement says they are shared.
- If a shared discount is part of the deal, show the client's saving explicitly.
- If the client pays the supplier directly, say that the supplier may pay the studio a commission, in the way your agreement describes.
- Use the same wording in the proposal, the estimate and the closing report.
- Answer direct questions about earnings directly. A prepared, calm explanation is better than a defensive one.

When the client sees a payment schedule that matches the invoices, trust usually follows. The [client portal](/features/client-portal) is one way to give them that view without exposing your internal numbers.

## How to do it in ArchiBoard

The [Project Finance](/features/project-finance) feature keeps the earning model, client payments, supplier payments and commission in one project. The steps below follow the user guide; item-level details are covered in the [Estimates help chapter](/help/estimates).

1. Open the project and go to **Project Finances**. In the finance settings, set your studio role, how you earn (commission, markup or share of supplier discount), who pays whom ("Client → Supplier" or "Client → Studio → Supplier"), the project currency and the approved budget.
2. Open **Suppliers** in the left menu and check the supplier commission recorded for each supplier you use on the project.
3. Go to **Estimates** and switch "Estimate view mode" to **Economics**. For each item you see MSRP, supplier discount, procurement, markup, profit and client price. Change an amount and the percentage recalculates, and the other way round.
4. In **Project Finances**, record client payments and supplier payments as transactions. Supplier payments are grouped by supplier, so you can compare what was paid with what was ordered.
5. Follow the commission through its stages: accrued, requested, received. The system creates the task "Request commission from…" automatically, so a commission does not wait unnoticed.
6. From a payment, generate a PDF: an invoice to the client, an invoice to the supplier for commission, or a report to the client. Studio details are taken from your profile settings.
7. Before sending documents to the client, use **Estimates → "Export to PDF"**. Your internal figures (purchase price, markup, profit) are not included in the client PDF.

## FAQ

### Is a trade discount the same as a commission?

No. A trade discount lowers the price at which you or your client buy from the supplier, so it is visible in the invoice. A commission is a separate payment the supplier makes to you, usually after the client has paid. They are tracked differently: the discount per item, the commission as a receivable with its own status.

### Do I have to tell the client about my trade discount?

That depends on your contract, your professional association and the rules where you work, so check those. As a practical principle, the client should understand how you are paid and should not be surprised later. Write the earning model into the proposal in plain words, and make sure estimates and reports do not contradict it.

### Should I pass the whole trade discount to the client?

It is a business decision, not a rule. Some studios pass the full discount through and charge a transparent fee or markup. Others share it or keep it as part of their compensation. Whichever you choose, agree on it before ordering, apply it consistently, and make the documents match the agreement.

### How do I avoid forgetting unpaid supplier commissions?

Record the expected commission when the order is confirmed or paid, not when you remember it. Give it a status and a request date. Review accrued but unrequested commissions once a month. Tools that create a reminder task for each commission help, because the gaps usually appear at the end of a project.

### Is markup on cost the same as margin?

No. Markup is the percentage added to your cost, while margin is the share of the selling price that you keep. A 12% markup gives about a 10.7% margin. Choose one definition for internal reports, label it clearly and use it consistently, so that profit figures from different projects can be compared.