Reduce Your Company's Spending with Automatic Clearing of Vendor Down Payments

  • by Gaetano Altavilla, Senior SAP Solutions Architect, Instructor, Project Manager, and Team Leader
  • November 25, 2013
See how to use the down payment process with the automatic clearing option with the materials management (MM) and Financial Accounting (FI) modules in SAP ERP Central Component (SAP ECC) 6.0. These solutions have already been implemented in production environments for MM and FI in SAP ECC 6.0. However, the processes also apply to previous versions of SAP ECC.
Learning Objectives

Reading this article, you will learn:

  • The business process of vendor down payments managed in SAP
  • The main customizing settings to be done in the system from an FI point of view
  • How to monitor purchase order documents with down payments
Key Concept
Many companies require a down payment when selling complex equipment. The down payment is processed through materials management (MM) and Financial Accounting (FI) modules and figured into future invoice documents. The automatic down payment process can improve company cash flow, reduce the risks of unplanned costs, and improve vendor relationships. The entire process can be monitored using the transaction’s purchase order (PO) history to display and change a PO.
SAP introduced new functionalities to SAP ERP Central Component (SAP ECC) 6.0 enhancement package 4 to clear down payments automatically at the time of invoice verification. Users can now record down payment data in purchase orders (POs) at the header and item levels (for example, down payment category, down payment amount, and down payment percentage). In addition, the down payment clearing function enables users to clear down payments that they have posted with reference to a PO without going to the relevant Financial Accounting (FI) transactions (transactions F-47 and F-48) directly in Logistics Invoice Verification (LIV). These functions are available for material settlement and service settlement in POs.

Gaetano Altavilla

Dr. Gaetano Altavilla is a certified associate senior SAP solutions architect, instructor, project manager, and team leader located in Naples, Italy. His focus is on pre-sales, delivery of SAP application solutions for large international corporations and SAP knowledge management across regions.

In his 16 years of SAP application experience working for many multinational companies, such as Procter & Gamble and Hewlett-Packard, he has covered a wide range of ERP logistic areas, focusing on the MM, WM, SD, LES, PP, PP-PI, PLM (QM, PM, PS) modules, as welll as CRM (TFM), SRM (EBP), SCM (APO), SCM (TM) and SCM (EWM) components.

Dr. Altavilla holds a degree with first-class honors in mathematics from the University of Naples and is certified in many SAP modules: SAP Logistics Bootcamp, SAP MM, SD, LE (SHP/WM/LE), PP, PLM (PM, QM, PS), SRM, CRM, SCM (APO), SCM (TM), FI, CO, and Solution Manager. He also has experience in ABAP/4 and application link enabling (ALE) and IDocs. He has participated in numerous industry conferences, such as the SAP Skills Conference in Walldorf at SAP SE.

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Comments

1/21/2014 11:55:51 PM
Nauman

Figure 1 seems to be incorrect. Article is not about accounts receivables. It should not mention "incoming downpayment" and "allocation of downpayments to receivable". Isntead, it should be "outgoing downpayments" and "allocation to payables".
1/21/2014 11:55:36 PM
Nauman

Figure 1 seems to be incorrect. Article is not about accounts receivables. It should not mention "incoming downpayment" and "allocation of downpayments to receivable". Isntead, it should be "outgoing downpayments" and "allocation to payables".

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