How to process Trade-ins in procurement

[Ketan7kar]

Hello SAP Experts,
In previous systems that I've used including JD Edwards One World, Microsoft Dynamics Navision, and even bookkeeping software like Xero and QuickBooks, we always had the ability to enter in negative dollar amounts on to purchase orders and sales orders on a line item basis.   The total amount for the purchase order or the sales order would be a positive number, however individual lines could be negative. This could be used for a variety of reasons depending upon whether it was a sales or a purchase order, but a few of the things that we used it for would be for advanced payments, special discounts received, core charges, trade-in credits, etc. usually this came up in an instance in which the item that you were receiving or selling differed from when you would receive the discounts or the other credits back from the vendor or a payment had to be made, or in the case in which the credit needed to go to a different GL account than the base item that you were purchasing.  

In this instance that we're talking about, we are buying a specific fixed asset, and having a trade-in value for another fixed asset that we are turning in to that vendor. We then have post payment dates for when we actually need to pay on the invoice, and the payments are a mix of the truck we’re purchasing and the trade in credit. So in this instance because it's an asset the accounting rule states that when we receive the item we have to go ahead and recognize the full value of what that item is worth as a fixed asset and start depreciating it. Even though we are not paying for it until almost a year later. So in this instance we created a line for receiving of that fixed asset for the full value of it, and then because we have a trade-in credit, right below that added in a line for the negative value of that trade in. Because it is a trade-in credit from a different fixed asset it needs to be coded to a different GL account for that trade-in credit then where the original fixed asset is going to go. So the net amount of the purchase order is 1.2 million however the value of the truck that we're getting is 1.4 million, and we're getting a trading credit of 200,000 that needs to go to two separate GL accounts. Then even though we have gotten the use of the truck the payments are not going to happen until significantly later and they are two different payments that are going to happen. So in this instance we're going to be making one payment for half in January of 2025, and then the next won't happen until the end of 2025. So in that instance we post the total value to an outstanding liability account, basically the reverse of a prepaid account, and then use the purchase order to receive those lines whenever the invoices come in for the payments at the specified time.

We tried doing this through negative dollar values and negative quantities on the order but neither one of those ways would work within SAP, both instances gave an error on the purchase order. So what we're looking for is a way to enter a negative line on a purchase order while the total purchase order is still a positive value.

It is generally significantly easier to do this in a single document that is managed by both the purchaser and the purchasing team than it is to split this up through multiple documents. I know we could probably do this through journal entries, or we could do this through multiple different documents whether that be orders and return orders, or debit and credit memos, or these kind of things, but ultimately that is going to be reliant on somebody remembering to put all these in the system at the time that it is needed. It is significantly easier to just manage it within the purchase order because it's all a part of the individual purchase.

Please check the attached document for the process flow of the old system and suggest how we can map this requirement in SAP.
I really appreciate any help you can provide.