Commission

Third-party commissions are the fees paid by the your company to third-party entities (agents, brokers, etc.) for intermediating the selling of a product or service to a customer. There may also be commissions paid by the third-party entity to your company, for example for accessing the company's crediting platforms, or even agreement management commissions paid periodically to the company. These third-party commissions vary for each company, based on their policy.

To prevent losing profits, there may be situations when the company claims back all or some of the commission already paid out to third-party entities, because the affected contracts were closed before their due date.

Distribution Management has a dedicated menu for managing third-party commissions. These third-party commissions are attached to agreements with third-party entities.

IMPORTANT!  
Third-party commissions cannot be used in contracts for customer, even if using the Distribution Management for Banking add-on.
They are not displayed in Banking Product Factory's Commissions menu and they can't be selected in Commission Lists.
Third-party commissions and third-party commission types can't be used in Payment Schedule Type Details.

To manage third-party commissions:

  1. In FintechOS Portal, click the main menu icon and expand the Distribution Management menu.

  2. Expand the Distribution Management Operational menu and click the Commissions menu item to open the Commissions List page.

 On the Commissions List page, you can create a new third-party commission, search, edit, or delete an existing one. You can't delete commissions already used by other records.

IMPORTANT!  
Even if using the Distribution Management for Banking add-on, the value of a third-party commission used in active contracts can't be edited. Instead, you can modify the value's validity and add a new value with a future validity period. For details, see the Editing The Value Of A Commission Already In Use section.
NOTE  
For information about the available endpoints, please visit the Distribution Management Endpoints page.

Creating Third-Party Commissions

IMPORTANT!  Make sure that the commission schema and commission types are already set up before creating your commissions.

Follow these steps to create new third-party commission records:

  1. In the FintechOS Portal, click the Insert button on the top right side of the Commissions List page. The Commission page is displayed.

  2. Fill in the following fields from the Main Information section:

    • Name - Enter the name of the commission.

    • Commission Type - Choose one from the following commission types:

      • ThirdParty (out-of-the-box third-party commission type)
      • ThirdParty Clawback (out-of-the-box third-party commission type, defined for clawback commissions)
      • Other third-party commission types defined by your users.
    • Currency - Select the currency of the commission from the drop-down.
    • Accept Clawback - Select this checkbox if the commission accepts a clawback commission during agreement pricing definition.

    • Is For Transaction - Select this checkbox if the commission is applicable when approving a transaction at the contract/ deal level, for example when approving a disbursement. If left unselected, then the commission is applicable when approving the contract/ deal. Depending on this setting, the system automatically triggers the calculation of the commission value in the moment when a contract or a transaction that falls under a third-party agreement is approved.

      NOTE  
      If a clawback commission has Is For Transaction = True, the clawback commission is calculated for each transaction type set in the Clawback Transaction Types field at the agreement pricing level.
      If a clawback commission has Is For Transaction = False, the clawback commission is calculated only for the first occurring transaction type from the ones set in the Clawback Transaction Types field at the agreement pricing level.
    • Value Is Percentge - Select this checkbox if the commission is measured by percentage, not as a fixed value
    • Percent Applied To - Only displayed if you select the checkbox next to the Value Is Percent field. Choose one of the following:
      • Remaining value - the percentage applies to the contract's remaining to be repaid value .
      • Financed value - the percentage applies to the contract's financed value.
      • Amount - the percentage applies to the contract's amount.
      • Interest - the percentage applies to the contract's interest.

      • For Term Loan, Mortgage or Overdraft banking products the calculation method is as follows:

      If percentAppliedTo = financedAmount, then financedAmount = amountDue - advanceAmount;

      If percentAppliedTo = amount, then financedAmount = amountDue;

      If percentAppliedTo = remainingValue, then, if Contract Status = ContractVersionDraft, then financedAmount = (-1) * mainBankAccountBalance. No negative values are allowed, so if the result is negative, then financedAmount = null.

      Default value financedAmount = null.For Current Account with Overdraft banking products the calculation method is as follows:

      If percentAppliedTo = overdraftLimitAmount, then financedAmount = overdraftLimitAmount;

      If percentAppliedTo = usedAmount, then if (periodType == Once), financedAmount = overdraftLimitAmount - availableAmountForOverdraft, else financedAmount = null.

      Default value financedAmount = null.

  3. Click the Save and Reload button.

After saving the commission record, you should define the actual values of the third-party commission. These values are later displayed on the Commission page's Commission Values section.

To add a new commission value, follow these steps:

  1. Click the Insert button above the Commission Values section within the Commission page.

  2. Fill in the following fields in the newly opened Commission Value page:

    • Commission Value - Enter the value of the commission, if the commission is a fixed value.

      OR

    • Commission Percent - Enter the percentage representing the commission. If the commission percentage > 100, Distribution Management displays a warning message.

    • Valid From and Valid To - Select the interval during which the commission value is applicable.

  3. Click the Save and Close button.