Settlements and pay groups

A settlement collects the eligible commission of a period up to a cutoff date, gets it approved, and freezes it as the immutable record of what will be paid. The frozen settlement then feeds the payment outputs (payroll-ready export, Accounts Payable, generic export or manual payment) and the accounting proposal. Pay groups let you settle groups of participants on their own schedule, with minimum and maximum payments.

A new settlement selects eligible balances through the cutoff date.

A frozen settlement is the immutable record of what will be paid.

Before you start

• Earnings must be Eligible. See Eligibility, aging, and holds.
• Each participant needs a Payment Method on the participant version: Payroll Export (with an Employee No.), Accounts Payable (with a Vendor No. or vendor link), Generic Export or Manual. See Participants and payees.
• Creating and working settlements requires finance-wide access. Users without it see the error BAA-FINANCE-SCOPE.
• If you use approval policies, set them up first. Without an active policy, submitting a settlement approves it directly. See Approvals and notifications.

Set up pay groups (optional)

A pay group settles a set of participants on a shared schedule and payment channel.

1. Open Commission Pay Groups and create a group.
2. On Commission Pay Group, fill in:

Field	What it does
Payment Frequency	Weekly, Biweekly, Semimonthly, Monthly, Quarterly, Annual or On Demand. New settlements default their cutoff to the end of the current cycle. On Demand uses the work date.
Cycle Anchor Date	A date that ends one biweekly cycle. Required for Biweekly.
Minimum Payment Amount	Smaller payables are deferred and stay eligible. Zero means no minimum.
Maximum Payment Amount	Only the maximum is paid and the remainder stays eligible. Zero means no maximum.
Component Offset	Offset Across Components nets negative components against positive ones. Positive Components Only pays the positive components and carries the negative ones forward.
Payment Method	Payroll Export or Accounts Payable.
Output Format Code	A free code recorded on exports for this group.
Consolidated Payee	Redirects member payments to a payee through Commission Payee Mappings.
Company Name	The company that pays this group, when it is not the current company.
Status	Only Active groups can be used.

1. Add participants in Members with Effective From and optional Effective To dates. A participant belongs to one pay group at a time.

Commission Payee Mappings redirect a participant's payment to another participant, for example an agency that is paid for several agents. The settlement still keeps one line per participant. Mappings cannot be chained or overlap.

Create and freeze a settlement

1. Open Commission Settlements and choose New settlement.
2. On New Commission Settlement, choose the Period, optionally a Pay group, and either one Participant or All participants. Set the Cutoff date. Eligible balances through this date are included. Leave No. blank to use the Commission Nos. series.
3. Choose OK. The settlement opens in Draft with its lines.
4. Review the lines. Choose Refresh selection if new eligible amounts arrived since the draft was created.
5. Choose Submit for approval. With an effective approval policy, the request goes to the approvers. Without one, the settlement is approved directly.
6. The approver opens the settlement and chooses Approve batch or Reject batch. The requester cannot approve their own request. A rejected or cancelled request returns the settlement to Draft.
7. Choose Freeze settlement. The app rechecks the balances and the license, then reserves the approved selection. The eligible amounts move to Payable, and the header and lines become immutable.

Read the settlement lines

Field	What it shows
Selected Amount	The eligible amount selected through the cutoff.
Recovery Amount	The amount withheld to recover an earlier overpayment. See Clawbacks and recoveries.
Net Amount	What the line pays.
Line Status	Payable, Deferred (below the pay group minimum), Capped (above the maximum) or Carried Forward (the net is negative and stays eligible to offset later earnings).
Decision Explanation	Why the payable differs from the selected amount.
Payment Method / Output Destination Code	How the line is paid: EMPLOYEE-PAYROLL or VENDOR-AP.
Payee Participant ID	The consolidated payee, if any.
Payment Currency Code	The currency the participant is paid in, when it differs from local currency. See Multi-currency.
Hold Reason Code	Why part of the balance was held.

Choose Balance evidence on a line to see the balance movements it selected.

Pay a frozen settlement

What you do next depends on the payment method of the lines:

Payment method	Next step
Payroll Export	Create payroll-ready export. See Payroll export.
Accounts Payable	Create AP export and create purchase invoices. See Vendor payments through Payables.
Generic Export	Create generic export file downloads an immutable CSV of the generic export lines. Then record each payment on its line.
Manual	Pay outside Business Central and record the payment on the line.

In every case, choose Create accounting proposal to post the accrual. See Accounting and posting.

Record a payment

For Manual, Generic Export, and Accounts Payable lines that have no AP invoice, select the line and choose Record payment. Enter the Paid amount (no more than the unpaid amount), the Pay date and a Payment reference such as a bank or cheque reference. The app records a Payable-to-Settled balance movement and an audit entry.

A settlement becomes Paid once every payable line is covered by its channel: a posted AP invoice, an accepted payroll acknowledgement, or a recorded payment. When every settlement of a frozen period is paid, the period becomes Settled.

Choose Remittance advice to print the Commission Remittance Advice for the settlement: lines, holds, payments and running balance per participant.

Settlement statuses

A settlement moves through Draft, Review, Submitted, Approved, Frozen, Exported, Posted, Paid, Reconciled and Closed. It can also be Cancelled or Reversed. From Frozen onwards, the header and lines cannot change.

Off-cycle and final pay

• Off-cycle creates an emergency, correction, contest or manual settlement outside the pay group calendar. The cutoff is not defaulted and an Off-cycle reason code is required. It follows the effective approval policy like any other settlement.
• Final pay settles every eligible amount of one terminated participant regardless of the cutoff date. The participant version must carry a termination date. Pay group minimum and maximum do not apply.

A regular settlement created after an off-cycle one selects only the remainder, so the same earning is never paid twice.

Adjustments after payment

A frozen settlement is never changed. When a return or correction changes an earning that was already settled, the delta becomes a new eligible or negative amount for a later settlement. If the original accrual was already posted, Create accrual adjustment on the posted accounting proposal posts only the delta against the original accounting lineage, and the posted adjustment is paid through the original settlement line's AP or payroll documents.

Troubleshooting

• BAA-SETTLE-VENDOR. A participant in an Accounts Payable pay group has no effective vendor link or vendor number with a matching currency.
• BAA-PAYGROUP-EMPTY. The pay group has no members effective on the cutoff date.
• BAA-HOLD-PAYSHEET. A paysheet hold is on the settlement. Release it on Eligibility Holds before submitting or freezing.
• A later reservation exists. A participant already has a frozen settlement with a later cutoff. Use a cutoff that includes it.

Related pages

• Payroll export
• Vendor payments through Payables
• Accounting and posting
• Period close and reopen