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SagarG
Explorer
This blog post will delve into the intricacies of the Down Payment Process with S4 HANA Finance. Down Payments or Advance payments, constitute a financial practice where parties pay in advance before the actual exchange of goods and services takes place. In the context of S4 HANA Finance, down payments are treated separately on the balance sheet, distinct from the conventional Accounts Payables or Accounts Receivables balances. All these down payments need to be clear once the goods and services are completed either manually or by automatic payment program. Shedding light on its significance and the steps involved in handling down payments.

  • Configuration for Down payment in SAP (Tcode: FBKP)

  • Initiate Down payment Request

  • Post Supplier Down Payment

  • Create Down Payment Invoice

    • Create Incoming Invoice (Without P.O)

    • Create Incoming Invoice (With P.O)

    • Invoice creation thru upload template



  • Clear Supplier Down Payment

  • Schedule Automatic Payments

  • Post Outgoing Payments (Manual)

  • Accounts Payable Overview

  • Aging Analysis


Configuration for Down payment in SAP (Tcode: FBKP)


Maintain Accounting configuration to create special GL accounts for Vendors and Customers


Figure: 1 - Configuration Screen FBKP


Double click Special G/L

Creation of Down Payment Request G/L Accounts for Vendors / Suppliers


Figure: 2 - Create Down Payment Request G/L Account for Vendors / Suppliers


 

Double click the above highlighted and assign Reconciliation Account and Special GL Account

21100000 is Vendor Reconciliation account, 12119000 is Special GL Account Vendor / Supplier Down Payment request GL Account indicated by “F


Figure: 3 - Assign G/L Accounts to Vendor account type






















Spl GL Description Recon A/C GL Description Alt Recon ac GL Description
F Down payment Request 21100000 Payables Domestic 12119000 Supplier Down Payment Requests

 

Creation of Down Payment Request G/L Accounts for Customers



Figure: 4 - Create Down Payment Request G/L Account for Customer


 

Double click the above highlighted and assign Reconciliation Account and Special GL Account

GL Account 21190000 is Customer Reconciliation Account, 12100000 is Special GL Account Customer Down Payment request GL Account indicated by “F


Figure: 5 - Assign G/L Accounts to Customer account type


 



















Spl GL Description Recon A/C GL Des Alt Recon ac GL Des
F Customer Down payment 12100000 Receivable Domestic 21191000 Customer Down Payment Requests

 

Creation of Down Payment G/L Accounts for Vendors / Suppliers


Figure: 6 - Create Down Payment G/L Account for Vendors / Suppliers


Double click the above highlighted and assign Reconciliation Account and Special GL Account

21100000 is Vendor Reconciliation account, 12110000 is Special GL Account Vendor / Supplier Down Payment GL Account indicated by “A


 



















Special GL Description Recon A/C GL Des Alt Recon ac GL Des
A Supplier Down payment 21100000 Payables Domestic 12110000 Supplier Down Payments

 

Creation of Down Payment G/L Accounts for Customers


Figure: 8 - Create Down Payment G/L Account for Customers


Double click the above highlighted and assign Reconciliation Account and Special GL Account

12100000 is Customer Reconciliation account, 21190000 is Special GL Account Customer Down Payment GL Account indicated by “A


Figure: 9 - Assign G/L Accounts to Vendor account type


 



















Spl GL Description Recon A/C GL Des Alt Recon ac GL Des
A Customer Down payment 12100000 Receivables Domestic 21190000 Customer Down Payments

Initiate Down payment Request (Fiori App)


This is an optional step to create note in system for down payment. No accounting document is created. Down payment can be  made based on this request


Figure: 10 - Down Payment Request


 

Showed as ‘Noted Items’ in Vendor line-item display. In contrast, the document contains no offsetting entries to other documents.

On the initial screen, you determine which line items should be displayed. For special G/L transactions, you select special G/L transactions.

If you want to display down payment requests only, you can use the selection function using the special G/L code “F”. Down payment requests are displayed in a separate column


Figure: 11 - Showed as Noted Items in Vendor line item display



Down Payment Process Flow



Figure: 12 - Down Payment Process Flow



Post Supplier Down Payment (Fiori App)


Down payment can be made with or without down payment request. System post to alternate GL account to display separately in the Balance sheet


Figure: 13 - Post Supplier Down Payment


 


Figure: 14 - Display Document


Vendor line-item display with Special GL Indicator & alternate reconciliation account

Accounting entries are as below

 

































Posting key GL Accounts Account Number Amount Currency
Dr 29A Special GL Vendor AC Supplier Down Payment 12110000  $    2,000.00 USD
Cr 50 Bank Outgoing A/C 10010000  $    2,000.00 USD

 

Create Down Payment Invoice (Fiori App)


Create Incoming Invoice (Without P.O)


Use this Fiori app to create a down payment Invoice without P.O. As soon as you enter the Vendor details, Invoice details will get an information message that Down payment exists for this vendor


Figure: 15 - Create Incoming Invoice


The system generates an accounting document for the down payment invoice



Figure: 17 - Document Ledger View


Accounting entries are as below

 

































Posting key GL Accounts Account Number Amount Currency
Dr 40 Expense 65003000  $  12,000.00 USD
Cr 31 Vendor A/C Regular Payables Reconciliation Acct 21100000  $  12,000.00 USD

 

Import Supplier Invoices


AP Invoices thru upload template


Figure: 18 - Import Supplier Invoices


Click Download for Template


Figure: 19 - Download Template


After downloading the template, enter all details on the template upload the file in the system.


Figure: 20 - Upload the template


Highlight the worklist item and select "Check"  to see in simulation mode


 


 

Figure: 21 - Simulation results


 

If you are satisfied with the simulation results, click Post


Figure: 22 - Posted an Invoice


Invoice is posted successfully


Figure: 23 - Supplier Invoice


 

Create Incoming Invoice (With P.O)


First create a P.O with "Manage Purchase Orders"


Figure: 24 - Manage Purchase Orders


Goods receipt with " Post Goods Movement app


Figure: 25 - Post Goods Movement


Create Supplier Invoice with reference to P.O

 


Figure: 26 - Create Supplier Invoice



Figure: 27 - Create Supplier Invoice with reference to PO


 

Invoice posted successfully


Figure: 28 - Invoice Posted



Clear Supplier Down Payment


Once the goods and services are delivered or completed, down payments need to be cleared. Special G/L should be cleared. Down payment clearing moves the balance from alternate reconciliation account to payables reconciliation account. This can be done manually or through automatic payment program, ensuring accurate financial reconciliation. The system generates an accounting document for the clearing. From the above scenario, we received the down payment of $2000 and an expenses of $12,000



Figure: 29 - Clear Supplier Down Payment


 

 



Figure: 30 - Down Payment Clearing


Down Payment Clearing completed with accounting document


Figure: 31 - Clearing Document


 


Accounting entries are as below

































Posting key GL Accounts Account Number Amount Currency
Dr 26 Vendor A/C Regular Payables Reconciliation Acct 21100000  $    2,000.00 USD
Cr 29A Special GL Vendor AC Supplier Down Payment 12110000  $    2,000.00 USD

Manage Automatic Payments / Schedule Automatic Payments


With this app you can schedule payment proposals or schedule payments directly and get an overview of the proposal or payment status. The app identifies the overdue invoices and checks whether all the required payment information is complete. Run automatic payment program to clear the open items against the Vendor after clearing down payments. Either you can select the invoice document number in free selection screen or without


Figure: 32 - Schedule Automatic Payments


 

Execute the payment run and see the postings


Figure: 33 - Payment Processed


The final accounting entries are as below

































Posting key GL Accounts Account Number Amount Currency
Dr 25 Vendor AC Regular Payables Reconciliation Acct 21100000  $  10,000.00 USD
Cr 50 Bank Outgoing A/C 10010000  $  10,000.00 USD

 

Post Outgoing Payments (Manual)


With this app you can post and clear a single outgoing payment in one step. You usually perform outgoing payments automatically based on payment proposals. However, if you want to perform a payment immediately, you need to enter the payment data manually. You can clear outgoing payments with open items. You can also post an outgoing payment on account or to a G/L account.

 


Figure: 34 - Post Outgoing Payments


 

Enter all payment details and click process open items, select only the line item you want clear the payment and post it


Figure: 35 - Process Open Items



Figure: 36 - Select the Open Item



 

Accounts Payable Overview


With this analytical overview app, you can monitor important accounts payable indicators and access the relevant accounts payable apps. You can use the filters to limit the data behind the indicators to the information most relevant for you. You can track down the Parked, Blocked, Posted invoices and Payable Outstanding's, Payments etc.


Figure: 37 - Accounts Payable Overview


 

Aging Analysis


With this app you can see the aging information across your organization so that you can identify negative trends in the total payable amount, the net due amount, and the overdue amount. This allows you to timely react by having your team taking appropriate actions to reverse these trends.


Figure: 38 - Aging Analysis Report


 

Conclusion


This blog post provides some insights on the down Payment process in S4 HANA Finance is a curial aspect of financial transactions, offering flexibility and transparency in handling advance payments. By segregating down payments on the balance sheet, organizations can maintain a clear and accurate financial records. Understanding and effectively managing the down payment process is essential for managing integrity and ensuring smooth business operations. Share your feedback in the comment section