Settlement and Payment Agreement 

Use

From the point of view of the commission system, the payment agreement is an external service provided by the disbursement system that is linked to the commission system (for example, FI).

The settlement agreement is a service provided by the commission system. It provides the settlement data in the commission system.

On the Settlement screen area you determine the settlement rules for each commission contract number. A settlement rule must be assigned to a commission contract for commission to be paid out.

Payment system: The settlement rule must be linked to the payment system (by reference to the payment recipient) in line with the selected settlement group. You need to specify the personnel number for HR and the vendor account number for FI. You must assign the settlement agreement to a standard settlement agreement. As there can be several disbursement systems in one installation, (for example, FI for commission), you must assign the disbursement system in the commission system (for example, HR).

Assignment is done for each individual agreement on the basis of a general assignment rule in the settlement agreement.

Integration

·         The standard agreement is assigned to a standard settlement rule. This is where you enter the settlement type and the reserve type of the rule, and the Effective From and Effective To dates.

·         The individual settlement rule is assigned to a standard settlement rule by using the settlement payment type.

·         Reserve rules are maintained together with the settlement agreement.

·         Period management is contained in the settlement agreement.

·         Cession/garnishment: If the commission contract partner cedes the right to remuneration to a third party, either wholly or in part, this will be contained in the payment agreement in the form of an alternative recipient.

·         Disbursement system: The master data for disbursement to the recipient is maintained in the disbursement system. From a business point of view, the payment agreement is a contractual element, however functions from the component Disbursement system are used.

As the payment agreement and all the payments business, including the dividing up of amounts among the relevant payment agreements (different payment types, bank accounts, alternative recipients), is done in the disbursement system, it is not considered to be a service provided by the component Commission contract.

The following disbursement systems are possible:

Component	Area	Description
Collections/Disbursements (FS-CD)	Insurance Object	The insurance object can be assigned to the commission system.
FI-AP	Vendor	The vendor can be assigned to the commission system.
HR	Personnel number	Personnel number can be assigned to the commission system.

 

·         Details on the payment agreement are maintained in the individual payment systems. The following payment agreement attributes can also be maintained:

 

Attributes	Description
Bank number	Bank number (payment recipient) - this tells you the bank account to which the payment is to be made
Address	Address of payment recipient to which a check/payment request (in the case of recalls) is sent
Payment method	Transfer, check, wage
Alternative recipient	If the commission recipient does not receive the payment personally (and if this is not maintained in the system)
Incoming/outgoing payments	Determines whether the agreement covers incoming and outgoing payments
Upper limit	Determines the amount up to which commission is paid out - decision as to whether value is maintained here or in disbursement system
Minor amount limit	If the amount is below the minor amount limit, it is not paid out - this does not apply to recalls

 

Commission contract: A payment agreement is defined in the commission contract. This means that a payment agreement can only be terminated in the disbursement system if the contract (settlement rule) is no longer valid after the date in question, or a payment agreement is no longer needed. The reverse is also true, in other words, the payment agreement with contract cancellation must be changed accordingly.

Owing to component assignment, the performance of the commission system with regard to payment agreements always depends on the performance of the disbursement system. If it is not possible to distribute a contract's disbursement amounts in the disbursement system, then this will apply to the commission contract also.

When reconciling the systems in the implementation project, make sure that the accumulation levels for disbursement are compatible with the payment agreements. You can only distribute among certain remuneration agreements if the postings are delivered in sufficient detail.

Business partner: Commission recipients or the business partner, and their address and bank details are defined in the business partner system. Changes in the business partner system are therefore not possible if they give rise to inconsistencies in the disbursement system (for example, deleting bank details).

You must link the business partner with the payment agreement using a reference in the partner system as, otherwise, you cannot get a consistent overview if there are different disbursement systems.

Prerequisites

Generally, each commission contract must have at least one payment agreement and one settlement agreement.

Before creating an agreement, you must maintain the following parameters in Customizing:

·         Maintain Service Module for the Payment System: This function module formats the outgoing payment document and transfers it to the payment system interface.

·         Maintain Settlement Target System: Here you can maintain the payment application and assign the service module. You enter the destinations here (for example, in the case of RFC).

·         Maintain Account Assignment Types

·         Configure Account Assignments

·         Maintain Settlement Types: Here you can assign the account assignment type, reference period, frequency, target system, processing date and reserve type to the payment type. The account assignment type is assigned for reserve types.

Required characteristics for payment method:		Prerequisites
System, Client
Other characteristics to identify the disbursement system (in the case of divided systems):	·         Disbursement system (logical service) ·         Company code
For HR:	·         Personnel number ·         Wage type	You must maintain symbolic wage types in Customizing so that the commission system can recognize them and payments can be disbursed using HR.
For FI:	·         Account number (vendor) ·         Posting key ·         G/L account number (reserve) or cost type ·         Doc. Type	The commission system must be able to recognize posting keys so that payments can be disbursed using FI.
Required characteristics for costs/expense:
System, Client
Other characteristics to identify the disbursement system	·         Company code ·         Document type (FI) ·         G/L account number (FI) ·         Other account information

 

Features

 

Payment Agreement

Settling payment business between contract partners. This covers the payment method (transfer, debit, check, and so on) and the bank and address details for the payer and payment recipient. Different rules can be applied to different payment types (premiums, benefits, commission) and also within one payment type (for example, for each line of business). The degree of importance of the payment agreement varies in payment business settlement: When creating settlements, postings must be summarized in settlement items in accordance with the conditions in the payment agreements. Each posting item refers to a payment agreement. You can group postings on a commission contract partner's account and optimize payments business (for each bank) in the disbursement system, independently of the contract. Items are offset in the disbursement system (for example, FI) also, over and above the payment agreement. The alternative recipient is defined in the payment agreement.

Settlement Agreement

Controls the information flow from the commission system to the payment system, including commission payments and any recalls (in relation to the commission contract). This means that the settlement agreement defines the settlement information that is needed for summarization and commission payments, but that is not maintained in the payment agreement.   You can only assign one settlement agreement to a standard contract.

Activities

New standard settlement agreements are maintained in Customizing. Choose Commissions à Basic/Master Data à Standard Commission Contract ® Settlement and Cancellation Reserve Agreement ® Maintain Standard Settlement Rules.

When you create an agreement, you must enter the dates effective from and effective to, and also the reserve type, disbursement type and period.

Remuneration types with a validity period for use in settlement must be assigned to each standard settlement rule.

A payment recipient must be assigned to each rule. If, for example, FI is specified as a target system, an account number from FI must be output.

The following attributes must be maintained in the disbursement system:

·         Bank account number

·         Alternative payment recipient

·         Address of alternative payment recipient

·         Minor amount limit