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Management of commissions and Bonuses

An agent is very important person for a company. They bring business for the company. The company can be dealing in any industry like paper industry, food and beverages industry, banking, insurance, automotive, stationary, real estate, manufacturing etc. Name the industry and they have multiple agents working for them. All these agents are paid commissions and incentives for the business they bring for the company.


All the agent’s commissions and incentives are to be maintained in hard copy or as soft copy using some file management system or some business automation solution. The process of incentive and commission payment is not that simple and may not be handled by many business solutions. SAP has a dedicated module, FS-ICM, for the incentive and commission management needs of the business. It is flexible and can provide solution to any complex business scenario in the incentive and commission management.

SAP is the leading ERP vendor in the market. FS-ICM is the solution provided by SAP to cater to all the business requirements related to incentives and commission. FS-ICM allows one to create business objects (BO) according to the requirements on which commission needs to be created and then these BOs can be customized and modeled accordingly. FS-ICM provides very simple interface (NetWeaver portal) for the users to maintain the standard commission contracts. From standard commission contracts, individual commission contracts can be created. In commission contracts multiple agreements can be added. The agreements are nothing but the set of rules set to calculate the final remuneration of an agent. These agreements can be customized according to the company’s predefined standards. The agreements can be participation, activity, valuation, remuneration, remuneration clearing, remuneration scheduling, flat rate, guarantee, target, retention etc. Commission case is created from the contract whenever sales happen.

There can be multiple partners involved in a sale. They can also be maintained in the commission contract. The participation can be direct or indirect participation. The participation can be determined using the organizational plan, via partnership, via previous commission cases or via contract to contract relationship. ICM differs between the direct and indirect participation. It is also possible to connect multiple individual commission contracts via contact to contract relationship.

The valuation process in ICM is used to determine the base amount on which the remuneration will be calculated. Remuneration process is where the commission rules and commission percentages are applied to calculate the actual commission. The incentive and commission valuation can be triggered from higher level system or from same level manually. High level system contains business objects, participants etc.                       



The tasks are fully automated. Once commission contract is created with all the agreements and a commission case is triggered, the system accepts the case, calculates the valuation amount according to the agreement, calculates according to the multiple agreements defined, calculated the remuneration amount, if scheduling is required than schedules the payments else post it to the calculation and disbursement (SAP FS-CD). There is very little or no user interaction required.

ICM covers profit sharing, incentives payment and target achievements also. Profit sharing, bonuses, incentives can be achieved by the Additional Commission Case agreement and can be run periodically. ICM has various predefined reports than can give the overview of commission cases, list of commission case participants, remuneration for commission documents etc. If any other complexity is to be simplified, it can be achieved using multiple BADIs available for customizing.

It would not be wrong to finally say that FS-ICM can support various scenarios related to the incentive and commission cases.

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