What is settlement type in SAP ICM - Incentive and Commission Management (ICM)?

SAP Term: settlement type

• Component: ICM

• Component Name: Incentive and Commission Management (ICM)

• Description: Incentive and Commission Management Defines the way in which remuneration is settled and transferred to target systems. A target system and the relevant account assignment information for the transfer is assigned to the settlement type.

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• Key Concepts: 
  Settlement type is a feature of ICM Incentive and Commission Management (ICM) that allows users to define the rules for how commission payments are calculated and distributed. It is used to determine the amount of commission to be paid out to sales representatives based on their performance. 
  
  How to use it: 
  Settlement types are created in the ICM system and can be configured to meet the specific needs of an organization. The settlement type defines the criteria for calculating commission payments, such as the commission rate, payment frequency, and payment method. It also defines the conditions under which a commission payment will be made, such as when a sales representative meets certain performance targets. 
  
  Tips & Tricks: 
  When creating a settlement type, it is important to consider the needs of both the organization and its sales representatives. For example, if an organization wants to incentivize its sales representatives to reach certain goals, it may want to create a settlement type with higher commission rates for those goals. 
  
  Related Information: 
  Settlement types are closely related to other features of ICM, such as incentive plans and bonus plans. Incentive plans define the criteria for awarding bonuses or other rewards to sales representatives based on their performance, while bonus plans define the criteria for awarding bonuses or other rewards based on a sales representative’s overall performance.