How to Accommodate Forwarder Requirements to Offset Commissions by Costs Expended

This enhancement will be available with the 9.1L.026 release of Collection-Master.

Review this documentation before activating the enhancement and applying the new rate to your Forwarders.

Purpose & Description

Some Forwarders require firms to recover costs last but reduce commissions on payments until all costs are accounted for.

This special commission calculation will determine the “commissionable dollar amount” account for Pending Costs, Non-recoverable Cost, or Recoverable Cost Recoveries.

This enhancement may also be used in instances where Non-Recoverable Costs should not be collected at all, but your Forwarder still requires commissions to be reduced by the amount of Non-Recoverable Costs expended. For Forwarders that require this, you must remove the N from their Collection Order.

Activating the Enhancement

There is no charge associated with this enhancement, but it does require a click-to-buy from the vStore in order to activate it. You can do that from the vStore > Collection-Master > Modules & Enhancements > Accommodate Forwarder Requirements to Offset Commissions by Costs Expended.

We recommend you thoroughly review the example below to determine whether you should activate the enhancement and apply the new rate to your Forwarders.

How It Works

The special commission calculation is triggered by adding an asterisk to the MASTER.COMM field (e.g., 10*). The enhancement will lower the “commissionable dollar amount” by the amount of Pending Costs, Non-recoverable Costs, or Recoverable Costs which have yet to be accounted for and reduce commissions earned. Once the costs are accounted for, it will take the x* percent as it normally would – in this example, 10%. As more costs are expended, the next payments will reduce the “commissionable dollar amount” until those costs are also accounted for.

If your Forwarder allows you to collect the costs at the end of the collection order, once you get to the J (Pending Cost), N (Non-Recoverable), or C (Recoverable Cost) buckets and payments to recover the costs, the program will take the commission due.

Test Example

Use this example to determine whether the Commission Rate Enhancement is appropriate for your Forwarders.

Example using 10* in the MASTER.COMM field:

  • Principal Placement Balance: $1000.00

  • Expended $100.00 in Non-Recoverable Costs

  • Expended $100.00 in Recoverable Costs

  • The current Total Due on the claim is $1100.00

  • Collection Order is configured as OPVISNJCWE, which includes the following buckets:

    • P – Principal

    • N – Non-Recoverable Costs

    • C – Recoverable Costs

  • Upon posting a $500.00 payment on the claim, the system will recognize the * in the commission rate and determine that there are $200.00 in costs not yet accounted for. The $200.00 is reduced from the $500.00 payment, so only $300.00 will calculate at 10%, which is $30.00.

  • Balance is now $600.00, where $500.00 is Principal and $100.00 is Recoverable Costs.

  • Assuming no other costs are expended after this, the next payment for $600.00 will allow the full 10% commission on the entire amount. However, if there were costs expended, the process would reduce next payment commissions by the amount of costs like the first payment.

  • Upon posting a $600.00 payment, $400.00 will go to Principal (not $500.00 since there is an N in the Collection Order), $100.00 to Non-Recoverable Costs, and $100.00 to Recoverable Costs. However, the commission is calculated on the entire $600.00 payment at 10%, which is $60.00.

  • Total commissions on this claim would be $90.00, which is 10% of the $900.00 Principal that was paid on this claim.

Help Center > Self-Help Resources > Collection-Master > How To > How to Accommodate Forwarder Requirements to Offset Commissions by Costs Expended