What is forfeiting in SAP PA-EC - Enterprise Compensation Management?

SAP Term: forfeiting

• Component: PA-EC

• Component Name: Enterprise Compensation Management

• Description: Occurs when an employee gives up his/her right to exercise awards due to life events such as termination, retirement, death or disability. Awards that have been cancelled following a life event can also go back to the pool or be redistributed.

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• Key Concepts: 
  Forfeiting is a process in SAP's Enterprise Compensation Management (PA-EC) component that allows companies to manage their receivables and payables. It is a form of financing that involves the sale of receivables to a third party, usually a bank, at a discounted rate. The third party then assumes the risk of non-payment by the debtor and pays the seller the discounted amount. 
  
  How to use it: 
  In SAP, forfeiting is used to manage receivables and payables. The process begins with the seller entering into an agreement with a third party, usually a bank, to purchase their receivables at a discounted rate. The third party then assumes the risk of non-payment by the debtor and pays the seller the discounted amount. The seller can then use this money to pay their creditors or invest in other projects. 
  
  Tips & Tricks: 
  When using forfeiting in SAP, it is important to ensure that all parties involved are aware of the terms of the agreement and that all documents are properly signed and filed. Additionally, it is important to keep track of all payments made and received in order to ensure that all parties are paid on time. 
  
  Related Information: 
  For more information on SAP's Enterprise Compensation Management (PA-EC) component, please visit SAP's website at https://www.sap.com/products/enterprise-compensation-management.html. Additionally, for more information on forfeiting, please visit Investopedia's website at https://www.investopedia.com/terms/f/forfeiting.asp.