Make Splitting a Payment Easy with Vendor’s Invoice Retention

  • by Moinuddin Khan
  • April 18, 2012
See two ways to split a payment with the amount split indicator. One is based on a percentage of the total owed by the customer, and one based on a specific amount.
Key Concept
The standard SAP option enable amount split indicator in Financial Accounting global settings allows you to split a vendor invoice amount. It activates a new tab called Amount split for incoming or outgoing invoices in Enjoy SAP system screens such as the new ABAP list viewer (ALV) screens used with transaction codes FB60 and FB70. This feature reduces the efforts users spend on a complex posting option for retaining an amount on vendor invoices.

You may have come across this scenario: A user asks how the SAP system can retain either a certain percentage or a dynamic amount from a vendor invoice. You can find yourself facing this situation if a vendor wants to make a down payment and then pay the rest upon completion of the work. This process is called retention on a vendor invoice. I show you how to achieve both percentage-based retention and amount-based retention on a vendor invoice.

Note
In Saudi Arabia, for a Saudi registered vendor, a Zakah certificate is presented on completion of work if a retention condition is agreed upon in the contract. Generally, such clauses are used for  service-related contracts.

Percentage-Based Retention

Let’ say you have a requirement for a 10-percent retention on a vendor invoice as per the contract with a vendor. This is a straightforward requirement that you can achieve by configuring the following payment and installment payment terms.

First you configure the payment term using transaction OBB8 or by following menu path SPRO > SAP Reference IMG > Financial Accounting (New) > Accounts Receivable & Accounts Payable > Business Transactions > Incoming Invoices/Credit Memos > Maintain Terms of Payment. Create a new entry. For example, ZRET is the proposed name for the retention invoices because other payment terms may exist. For the payment term, do not forget to select the Installment payment indicator (field XSPLT). You define the description of this payment term ZRET as Pay 90% and retain 10% (Figure 1).

 

Moinuddin Khan

Moinuddin Khan is an SAP-certified FI/CO consultant who has been working as an SAP consultant for more than 11 years. He has been involved in SAP implementations, upgrades, rollouts, and support activities. He also has SAP FI-CA and FM module experience.

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