Both the fees and their conditions are required before fees and commission can be settled in business transactions.

The fees (FEE) themselves provide the foundation: which fees are to be defined in the system, with their descriptions, the accounts to be used and other such details. Fee conditions (FEC) indicate how a fee is to be settled (it is possible to define different values for the various types of conditions).

If new fees are to be added, the basis definition first has to be created in “Adding a Fee”. After the fee has been saved, the user is automatically taken to the Adding a Condition transaction. This allows the required conditions to be captured.

Details on the individual datafields of fees and conditions are described under “Maintaining Fees” (DBIFEE) and “Maintaining Conditions” (DBIFEC).

A number of fields have pre-defined selection options. If additional values need to be defined in the course of the installation project, this needs to be discussed with your support staff given the various dependencies that need to be taken into account.

This also applies if additional calculation methods for conditions are needed. The exception here is the case of the group code. Here, the codetable “FEEGRP - Fee Group Codes” can be used to provide additional banking requirements.

Fees can be selected manually to be charged in settlement transactions. Furthermore, rules can be defined in transactions stipulating the circumstances under which certain fees are to be automatically proposed for settlement.

If a fee is to be settled in a transaction, any fee conditions used in the calculation are searched for as follows. Firstly, the payer of the fee needs to be determined. This provides the key for the various special conditions. A check is run to see whether special conditions have been defined for this key and whether they apply at this relevant point in time.

Conditions applying split amounts need the relevant overall amount before the proportions used can actually be calculated.

The search sequence is:

• 00 = Default
• 10 = Business Sector (the contract belongs to)
• 20 = Entity (the contract belongs to)
• 30 = Region (in the country of the party)
• 40 = Country (of the party)
• 50 = Group (to which the party is assigned)
• 60 = Party (to pay the fee)
• 95 = reserved for frame agreement; not yet supported
• 99 = Contract (in which the fee is to be calculated)

Based on a generally valid fee condition, a search is made for more special conditions. If special fee condition values have been defined relative to the default condition (e.g. minimum/maximum), condition details are adjusted appropriately and the search continues.

When such relative values are used, users need to note that pushing and pulling of other special conditions can influence the end result.

Example: default '10.00 minimum' plus party condition defined as 'only 50% of the minimum' leads to a calculated minimum of 5.00. The additional definition of a sector condition of 'minimum 8.00', for example, can change the minimum for the party (in this business sector) to 4.00.

Fields are defaulted in the Settlement Panel based on the fee conditions that have been defined. The user can then decide how to proceed. Depending on the definition of the fee and/or the fee condition, the data contained in the condition may change. All details can be viewed in the Settlement Panel.

The system uses methods of calculating fees that are based on certain types of interest rate. In order to use this type of method, these interest rates types first need to be defined. This is done by using the “Maintaining Reference Interest Rate Types” (DBIIRT) transaction.

The interest rate type has to be defined separately for each currency. If an interest rate type has not been defined for a specific currency a warning is issued during transaction processing and the interest type for the system currency is taken. Interest is then calculated in the system currency only and is expressed in the system currency. When setting up the system it is important to adapt the interest rate types available in the application to meet the bank's own needs.

After interest rate types have been defined, it is possible to enter interest rates for the existing interest rate types. During the definition process, a sequential number for interest rate maintenance is also defined. Interest rates can be maintained by the “Maintaining Reference Interest Rates” (DBIIRS) transaction.

The maintenance of interest rates requires an interest rate type in the requested currency to be defined. Otherwise it is not possible to calculate interest for the target currency.