Commission Case

The commission case determines the remuneration result of the commission recipient on the basis of the information provided.

Commission is generated when a process (business transaction) takes place in an enterprise, which results in added value and at least one participant is involved. Agreements have to be made that trigger the disbursement of a commission. With Incentive and Commission Management, you can remunerate a wide range of business transactions as the system is extremely flexible.

The result of the commission case is a commission document, which is required for settlement.

Prerequisites

You must define your remuneration model in Customizing for Incentive and Commission Management.

Features

This graphic is explained in the accompanying text.

Graphic: Commission Case

Commission Case Inbound Interface

The commission case arrives in the system through a structured inbound interface with information on the participants, activities and objects relevant for commission. Individual field enhancements to the inbound interface can be made to all the structures. Data can be supplied to the commission interface either online or using a background (batch) procedure.

A commission case is recorded in Incentive and Commission Management as a primary entry. These entries are kept in different versions and therefore represent changes from the reporting systems in terms of when they were made.

Note Note

The processing mode is an important editing parameter provided in the inbound interface.

Post

If it contains the value through posting, then commission documents are created and posted as long as they contain no errors. The commission case and its documents then receive the status posted and are released for inclusion in the settlement.

Parking

The park mode means that the commission case and its documents have been given the parked status. This means that documents cannot be included in the statement, but they are marked as a provisional payable.

Simulation

As an additional feature of processing mode, commission cases can be simulated, allowing you to analyze their effects without the data being written to the database.

Pending Cases

As long as a commission case has not yet been posted, and therefore not yet released for inclusion in the settlement, the processing status is pending. A pending commission case must be reprocessed. If changes are made, a new version of the commission case is created. This means that changes are clear and can be tracked, and are consistent with previous postings.

End of the note.

The commission case consists of the following processing steps:

1. Check Acceptance

The acceptance check ensures that only consistent data passes through the commission case interface to the commission system. The data is checked effectively as well as technically in the following process steps:

- Formal data check, for example of date formats

- Check of correct chronology of receipt of business object information

- Check of dependencies of business objects (bundling)

- ...

If the check is successful, the commission case can be processed further.

If the check is not successful (for instance, if essential data is missing), the commission case is rejected by the inbound interface and no data is written to the database.

2. Enrich Commission Case

At this point you can enrich the commission case with data from user exits. For instance, you can use user exit CACS1001 to insert industry keys, object characteristic groupings, to check attributes and to read other data. This lets you enrich, change and check metaobjects at the start of commission case processing and during the check itself.

In the determination of participants, a differentiation is made between direct and indirect participants.

Information on individuals participating directly in a business transaction, for instance a new acquisition, is passed on to the inbound interface of the commission system.

Information on individuals, such as a line manager, participating indirectly in a business transaction is determined on the basis of the Customizing settings for the organizational structure or contractual agreements.

Indirect participants are usually determined from the direct participants, for instance the line manager of a signing agent is determined from the signing agent. Each participant is assigned a participant role. You can use this assignment during the remuneration calculation to define different remuneration rates depending on the role.

Example Example

Main agent 8%

Subagent 5%

End of the example.

You can use participation shares to weight the share of the direct participants in a particular business transaction.

A participation represents the joint services provided by more than one participant, and represents the grouping of more than one direct participant.

3. Calculate Commission Case

3.1 Determine Activities

Work carried out by a direct participant that results in a commission entitlement is known as an activity. This includes activities such as conclusion of a new contract, or portfolio business support, and periodic remuneration on the basis of output attained.

You define individual activities according to the requirements of your company in Customizing for Incentive and Commission Management.

You can also define your own customer-specific commission-relevant objects, and it is possible to map hierarchical structures between objects.

Structures in Insurance Industry

This is represented by an insurance policy with hierarchical subdivisions such as tariff, coverage or product, or one-level objects such as a collection transaction, a remuneration as part of claim settlement, or a periodic remuneration.

3.2 Perform Valuation

Commission-relevant objects can be evaluated using one or several valuation types.

This valuation forms the basis for historic updating of objects, whereby both the current value and the difference in the case of object changes are determined.

The valuation also forms the base value for the actual remuneration calculation. You can use the current absolute value of an object and the difference value that arises if an object is changed.

4. Liability

At this point in the commission case process you can determine liability totals.

To do so, you must have selected package CACS03 Liability in Customizing under Application Administration

In the case of a cancellation or partial cancellation, the liability function lets you fully or partially recall remuneration payments already disbursed. Depending on the packages you have chosen in Customizing, the following liability models are available:

LIFO liability (last in - first out)

FIFO liability (first in - first out)

Pro rata liability

You can either define global liability rules or rules for each commission contract.

5. Calculate Remuneration

You define the various remuneration types in Customizing, according to the organizational requirements.

Globally, a differentiation is made between direct remuneration (intended for disbursement) and indirect remuneration (not intended for disbursement).

Remuneration types also control the determination of remuneration rules, tables and calculation schedules, as well as determination of account information for the settlement systems.

Acquisition commission, portfolio support commission, collection commission, follow-up commission or overriding commission are typical examples of direct remuneration.
A typical example of indirect remuneration is the output that can be the basis for periodic direct overriding commission or competition, but which cannot be paid out on its own.

Remuneration types determine the calculation methods and control how account information for the settlement systems is determined.

6. Remuneration scheduling

If you do not want remuneration to be automatically due for disbursement on the posting date of the commission case, you can schedule the remuneration payments.

7. Post commission case

A final check is made before the commission case is posted. If an error message is written to the application log, the commission case can only be posted with the status Parked with errors, in other words the case is set to pending. You can influence the processing status with user exit CACS1000.

Example Example

For an exceptionally high remuneration amount, you can set the processing status to dual control.

End of the example.

If no errors occur during processing of the commission case, a commission document is posted.

Result

When the commission case process is successfully completed, the data is available for settlement.