Guarantees (SAP Library

Guarantees

Use

When a commission contract partner first assumes an agent's activities, the earnings are usually not enough to live on for the first few months, or even years. For this reason, he or she is granted either a fixed subsidy or a guarantee. This means that the commission contract partner is guaranteed to receive a minimum amount (taking into account the commission).

Integration

The guarantee agreement is an individual agreement contained in the commission contract.

Case-related guarantees: Guarantees that refer to individual commission cases (for example, minimum commission) and are contained in the offsetting agreement (remuneration or ceiling amount).

Features

The following points are important in conjunction with the guarantee:

Details on the guarantee agreement	At the core of the agreement is a fixed term for a certain (for example, 18 to 24 months) or unlimited period and the determination of the extent of the guarantee amount to be paid for the fixed period. It also covers which performance-related and/or flat rate remuneration in the period can be offset against the agreed guarantee amount. This might include guarantees on the overall commission paid out within the settlement period or on remuneration of a particular type (for example, line of business or without taking into account flat-rate remuneration that is paid out to offset costs). Being able to limit remuneration to be offset allows you to have several independent guarantee agreements for different remuneration areas. You can agree to make the disbursement in advance or at the end of a period. The guarantee amount is then paid out either at the start or at the end of the period. In the case of payments in advance, creditable remuneration is offset at the end of the period.
Excess/Sub-Threshold Earnings	If the sum of creditable remuneration exceeds the agreed guarantee amount in the settlement period, the difference is referred to as excess earnings. If it does not reach the guarantee amount, the actual guarantee paid out is reported as sub-threshold earnings. If there are excess earnings in a settlement period, any sub-threshold earnings made in the previous period and not yet recalled, are recalled up to the amount of the guarantee.
Recall The following forms of recall apply:	As guarantee remuneration is not remuneration in the real sense, but is designed to assure an agent minimum earnings, an agreement is usually made regarding possible recall. This agreement covers, for the whole period of a guarantee ruling, when and to what extent a guarantee that has already paid out, can be recalled. The recall always applies within a guarantee remuneration ruling (no recall of guarantees paid out for this ruling from excess earnings from other rulings). No recall of guarantee remuneration Guarantee payments are generally not recalled The agent has at least the agreed guarantee in a settlement period. Ongoing recall of guarantee remuneration in the case of excess earnings Recall when a guarantee agreement ends: In the case of ongoing recall, guarantees can only be recalled during the term of a guarantee agreement if there are excess earnings in the period to be settled. Otherwise the guaranteed amount would not be reached. In such a scenario, therefore, when the agreement ends, the term of the agreement is viewed as a whole and any sub-threshold earnings that have not yet been recalled are offset against any excess earnings. This means that sub-threshold earnings in the last periods of the term can be offset against excess earnings from previous periods. In the current release, these amounts are cleared using manual transfer postings. Retention of excess earnings: In some companies, the agent receives remuneration only to the amount of the guaranteed amount during the guarantee period. Any excess earnings in this period are retained. Once the guarantee term is over, the guarantee costs that have been paid are offset against the retained excess earnings and any remuneration due is paid out.

In the commission system, the guarantee agreement in the standard commission contract is considered as being a standard agreement. Exactly one guarantee agreement can be assigned in each standard commission contract. Each guarantee agreement consists of one or more standard guarantee rules.