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Down Payment Process in SAP S/4 HANA

Updated: 2 days ago

What is a Down Payment ?

A Down payment is an advance payment received from a customer or an advance payment made to supplier, part of full payment and rest of money paid later, to fulfill order before the actual sale/purchase.


Let's take an example to understand this :

'Bajaj' placed an order of 1,00,000 INR to its 'Vendor' for supplying items, on 01.04.2024 Vendor have asked 'Bajaj' to pay an amount of 25,000 INR before 10.04.2024 for the actual sale, and later to pay the remaining amount after receiving the goods. On 08.04.2024 'Bajaj' made a payment of 25,000 INR to Vendor. On 11.04.2024 vendor sent Invoice with supplies of 1,00,000 INR and on the same day Bajaj settled the remaining payment of 75,000 INR.


Configuration for Down Payment in SAP ( Special G/L Indicator )

STEP 1 : Go to Transaction Code OBYR (Vendor) or OBXR (Customer) for special G/L configuration, then Select Special G/L Indicator : "A" for Actual Down Payment, "F" for Down Payment Request and Provide your Chart of Accounts.


Special G/L Indicator

Both the Special G/L Indicators are pre-delivered by SAP, with properties as seen below -

Special G/L Indicator "F" is ticked as Noted Item where Target Special G/L Indicator is "A".

  • Noted Items : are special G/L transactions meant for reference, not for updating general ledger. They serve to remind users of outstanding payments due or to be made.

  • Target Special G/L Indicator : is used to define the target special GL indicator from which payment can be made against a request.

Special G/L Indicator

STEP 2 : Enter Vendor G/L's under Reconciliation Account against Advance to Vendor G/L under 'Special G/L Account' in both Special G/L Indicator of 'A' & 'F' .


*Pre-Requisite :- below G/L Accounts (in FS00)

  • Advance from Customer with Account Type 'X' and Reconciliation Account Type as 'Customer' which is a Liability.

  • Advance to Vendor with Account Type 'X' and Reconciliation Account Type as 'Vendor' which is an Asset.

Special G/L Indicator



How does the Down Payment Process work in SAP ?

The Down Payment Process in SAP S/4 HANA for both the Vendor (K) and Customer (D) is similar, basically this includes the following steps.

Serial No.

STEP

T.Code (K)

T.Code (D)

1

Down Payment Request

F-47

F-37

2

Post Down Payment

F-48

F-29

3

Invoice Creation

FB60

FB70

4

Clear Down Payment

F-54

F-39

5

Final Payment

F-53

F-28

By Considering the above example, lets post the transactions in the system.


STEP 1 : Go to Transaction Code F-47 for creating a Down Payment Request of 25,000 INR

Enter Document date, Posting date, Vendor A/c, Target Special G/L as "A", Advance Amount, Due on date and then click on Post.


Down Payment Request

Document Posted seen below shows that the Down Payment Request with Special G/L Indicator 'F' which created only a single line of entry this doesn't effect Vendor G/L balance (this can be seen with Noted Item selection in Vendor balance display).


Down Payment Request

STEP 2 : Go to Transaction Code F-48 to Post Down-Payment of 25,000 INR

Enter Document date, Posting date, Vendor A/c, Special G/L Indicator as 'A', Bank fields and click on Requests


Down Payment Request

Select the Down Payment Request created and then click on Post.

Down Payment Request

Document Posted seen below shows the Down Payment Request with Special G/L Indicator 'A' in Vendor line item.

Down Payment Request

STEP 3 : Go to Transaction Code FB60 to create Vendor Invoice of 1,00,000 INR

Enter Vendor, Invoice date, Amount (including Tax), line item fields and click on Post.

Vendor Invoice (KR) is a bill that a company receives when purchasing goods from a supplier.


Down Payment

Posted Vendor Invoice Document -

Down Payment

STEP 4 : Go to Transaction Code F-54 to Clear Vendor Down Payment against Invoice

Enter Document date, Vendor A/c, the Invoice and then click on Process down payments.


Down Payment Clearing

Select the Document number of Down payment made and then click on Post.

Down Payment Clearing

Document generated after Down Payment Cleared against the Invoice.

Down Payment Clearing

STEP 5 : Go to Transaction Code F-53 to make remaining payment of 75,000 to vendor.

Enter Document date, Posting date, Bank data, Amount, Vendor A/c and click on Process Open items.

Vendor Payment (KZ) - is paying the amount for receiving goods or services, it is the final step of P2P Cycle. Vendor payments are made by considering terms of payment and on how to settle payment whether to make Payment in full, Partial and Residual Payment.


F-53

Select both the Vendor Down Payment Cleared & Invoice and then click on Post.

Down Payment

Document generated after making the final Payment.

Down Payment

In conclusion, understanding the down payment process in SAP is essential for smooth financial transactions. By following the above steps, businesses can effectively manage down payments, streamline their payment processes, and ensure compliance with accounting standards.



Thank you for taking the time to read my blog. I appreciate your support and hope you found this content valuable. Stay tuned and follow me for more insightful articles in future.



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2 Comments


I like the way you made the document and followed logical steps and explained. THANK YOU

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Replying to

Thank you so much! Your comment really motivates me to keep writing more blogs.

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