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.

The main business activities to be performed in the SAP system are shown in Figure 1.

Figure 1

Main activities involved in the vendor down payment process

The Down Payment Process

In the down payment process, you create a PO in materials management (MM), which is filled upon receipt of a down payment. After you post a goods receipt, you create the logistics invoice verification in MM. The system automatically clears the goods received and goods invoiced. After the customer makes a down payment, it must be cleared to provide an accurate final invoice amount. Clearing of the down payment can be done automatically or manually. The final payment can then be made.  

In the SAP system, the purchasing department creates a PO document with down payment data using transaction ME21N or by following menu path Logistics > Materials Management > Purchasing > Purchase Order > Create > Vendor/Supplying Plant Known (Figure 2).

Figure 2

PO details involved in the vendor down payment process

In this case, you can choose to enter the down payment amount or percentage along with the due date for the payment in the PO line item. You can also choose the down payment category from the following values, which can be used only to classify the down payment:

• Mandatory down payment – As per negotiation, a down payment is required for this transaction
• Voluntary down payment – The company is willing to pay a down payment without any request from the vendor

After saving the PO document, you can monitor it with a new program. Use transaction ME2DP or follow menu path Logistics > Materials Management > Purchasing > Purchase Order > Reporting > Down-Payment Monitoring for PO (Figure 3). Usually, the FI team uses this transaction for monitoring and processing the down payment.

Figure 3

Monitor PO documents with down payments

The system shows the following details for each document:

• Down payment not yet processed
• Down payment processed and payment made
• Down payment has been created at header level

After selecting the appropriate document, you can create a down payment request or post a down payment. Note that the down payment document is visible in the PO history. To create a down payment request, enter the PO details in the fields shown in the screen in Figure 3. Click the execute icon . The system then calls transaction F-47 in the background. You can also follow menu path Accounting > Financial Accounting > Accounts Payable > Document Entry > Down Payment > Request. The system provides the down payment details in the Down Payment Request: Header Data screen (Figure 4). Verify that the down payment information is correct and press Enter. The next screen (Figure 5) includes a status message indicating that the down payment request has been posted to the PO.

Figure 4

Create a down payment request (header data)

Figure 5

Down payment request line item data saved to the PO document

To post a down payment, use transaction F-48 or follow menu path Accounting > Financial Accounting > Accounts Payable > Document Entry > Down Payment > Down Payment (Figure 6).

Figure 6

Header details of FI vendor down payment document

After you enter the down payment data, as shown in Figure 6, click the Requests button.

The list of the down payment requests appears (Figure 7).

Figure 7

Choose the appropriate vendor down payment request

After selecting the appropriate vendor’s down payment request, click the Create down payments button. In the next screen (Figure 8) click the save icon (not pictured).

Figure 8

Save the vendor’s down payment posting

The accounts payable department then creates an incoming invoice for the PO. Use transaction MIRO (Enter Incoming Invoice) or follow menu path Logistics > Materials Management > Logistics Invoice Verification > Document Entry > Enter Invoice (Figure 9).

Figure 9

Invoice verification (basic data and line-item details)

After entering the PO, you see an information message that down payments exist for this PO. Note that the system displays the Down Payment Clearing button at the header level. This button shows the status of clearing:

• Red stands for an error in down payment clearing.
• Yellow shows that clearing amounts have not been entered for all down payments.
• Green shows that clearing amounts have been entered for all down payments.

Select all the down payments that you want to clear. Click the save icon (not pictured) to save the invoice document. The down payment clearing document is posted as a separate document together with the invoice document. 

Customizing Prerequisites

From an MM point of view, no specific customizing steps need to be performed in the system because you can use the standard SAP settings can be used for this solution. You can use transaction code FBKP for the main FI customizing steps relevant for vendor down payments. After you execute this transaction, the system lists the options shown in Figure 10.

Figure 10

Options for FI customizing steps for vendor down payments

Automatic Postings

Click the Automatic postings button for the list Group with an Account Key. In the next screen (not shown here), select Down Payments. Select the group for down payments, which is ANZ. The system displays the details listed in the screen shown in Figure 11.

Figure 11

Maintain accounts for automatic postings relevant to down payment

Users can specify general ledger (G/L) accounts for automatic postings only for taxes.

Select the options highlighted in Figure 11 by double-clicking the line item and specifying the accounts for the output tax (Figure 12) and the input tax (Figure 13) relevant for down payment to automatically determine the right account to be associated with the tax code.

To specify accounts for the output tax, enter the account for the Chart of Accounts and transaction  MVA combination (Figure 12). To specify accounts for the input tax, enter the account for the Chart of Accounts and transaction VVA combination (Figure 13).

Figure 12

Automatic posting details for output tax clearing

Figure 13

Automatic posting details for input tax clearing

Special G/L

In a standard SAP system, the Special G/L indicator is used to distinguish the down payment and accounts receivable data for the same account type (e.g., vendor). 

To specify the reconciliation accounts and special G/L accounts for the down payment request and down payments, click the Special G/L link shown in Figure 10.

In the screen that appears (Figure 14) define configuration settings for a down payment request. Enter K in the Account type F in the Special G/L ind. , and INT. in the Chart of Accounts. Press Enter to save the data.

Figure 14

Define accounting configuration for a down payment request

To define configuration settings for a vendor’s down payment, enter INT in the Chart of Accounts, K in the Account Type, and A in the Special G/L ind.

Figure 15

Define accounting configuration for a vendor’s down payment

Posting Keys

The posting key defines whether the item is a debit or credit, as well as which account type (customer or vendor) is posted. By default, the SAP system lists the relevant posting keys used for vendor down payments. To access this list use customizing transaction OB41 or follow IMG menu path SPRO > Financial Accounting > Financial Accounting Global Settings > Document > Line Item > Controls > Define Posting Keys (Figure 16).

Figure 16

Posting keys relevant for vendor down payments

Document Types

The document type classifies the accounting documents and stores attributes that control the entry of the document (for example, the type of number range). In a standard SAP system, the document types relevant for down payment are KA and KZ (KA is used for down payment requests, and KZ is used for vendor payments), as shown in Figures 17 and 18. If necessary, you can also use your own document types, such as ZA and ZZ. Use customizing transaction OBA7 or follow IMG menu path SPRO > Financial Accounting > Financial Accounting Global Settings > Document >Document Header > Define Document Types.

Figure 17

Display a document type for a down payment request

Figure 18

Display a document type for a down payment posting

Clearing Procedure

In the SAP system the standard clearing procedures for outgoing payments, and also for vendor down payments, are completed with transaction code AUSGZAHL. In the screen in Figure 19 (which you access by clicking the Clearing Procedure link in Figure 10), define the Posting keys that are used for debit/credit clearing entries in a vendor account if the line item to be cleared has a special G/L indicator.

Figure 19

Define posting keys for debit/credit clearing procedures in a vendor account for special G/L

Field Status Group

To define which fields are required entry fields and which are hidden during document entry, click the Field Status Grps link in Figure 10. In the screen that appears (Figure 20) set the PO field as optional.

Figure 20

Field status group details for a PO at posting key/special G/L level

Assign the Company Code to the Field Status Variants

To assign your company code to the appropriate field status variants, use customizing transaction OBC5. In the screen that appears (Figure 21) enter the appropriate value in the Fld stat.var. column. A field status variant consists of field status groups. Within each field status group, you can define an attribute of a field: optional, mandatory, or suppressed entry. Use transaction code OBC4 to define these attributes in customizing.

Figure 21

Assign company code to field status variants (in this case, 0001)

Classify G/L Accounts for Document Splitting

I recommend that you perform this customizing step only if you have activated the online document-splitting option in your system. In this case, each document is assigned to an accounting transaction variant, and each document line item is assigned to an item category. Additionally, you determine for each business transaction variant which item categories can or must be posted here. Follow customizing menu path IMG > Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Classify G/L Accounts for Document Splitting (Figure 22). In this case, the item category 03100 Vendor: Special G/L Transaction should be determined for account 159010 in chart of accounts INT.

Figure 22

Classify G/L accounts for document splitting

Automatic Clearing Process

To activate the automatic clearing option, use transaction code SFW5 to switch on the business function LOG_MMFI_P2P as shown in Figure 23. Note that SAP added this functionality to MM beginning with enhancement package 4. After you activate this function, all relevant automatic clearing functionalities are available in the PO and LIV.

Figure 23

Activate the business function LOG_MMFI_P2P

Note that if you want to use down payment clearing with SAP General Ledger accounting, you need to follow menu path Customizing for Financial Accounting (New): IMG > Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Classify G/L Accounts for Document Splitting. In the screen that appears (Figure 24) enter the special G/L account with an item category of 3100 (Vendor: Special G/L Transaction) that is posted during down payment clearing. If you select the Overrd. indicator, you specify that the internal derivations of the item category should be overridden by the derivation by accounts.

Figure 24

Classify G/L account for document splitting (in case of down payment clearing with the SAP General Ledger accounting)

To extend the document-splitting rule that you use when posting the invoice from LIV (via transaction MIRO) follow menu path IMG > Financial Accounting (New) > General Ledger Accounting (New) > Business Transactions > Document Splitting > Classify G/L Accounts for Document Splitting > Extended Document Splitting > Define Document Splitting Rule (Figure 25). Select the Header data folder and click the For Each Logical Transaction radio button in the Further subdivide document group section.

Figure 25

Enable the document-splitting rule separately for each logical activity

Double-click the folder Item categories to be edited. In the pop-up screen that appears, add category 3100 (Vendor: Special G/L Transaction) to the list of respective Basis item categories, as shown in Figure 26.

Figure 26

Add a base item category for a down payment

Note that if you have activated automatic down payment clearing, you cannot use down payment clearing in transaction MIRO. To activate down payment clearing during a goods receipt/invoice receipt (GR/IR), follow menu path IMG > Public Sector Management > Funds Management Government > Actual and CommitmentUpdate/Integration > Integration > Configure Automatic Clearing of Down Payments/Down Payment Requests (Figure 27). Select the box shown under the DP Clr column.

Figure 27

Activate down payment clearing during a GR/IR

If the DP Clr box is selected, the system clears a down payment automatically when a GR/IR is created and references it. If the DPR Upd box is selected, the system updates a down payment request (DPR) to the PO history, and if a user creates a down payment referencing that DPR, the DPR is automatically cleared.

Gaetano Altavilla

Dr. Gaetano Altavilla is a senior SAP practice manager. His focus is on pre-sales, delivery of SAP application solutions for large international corporations, and SAP knowledge management in Europe, the Middle East, and Africa (EMEA).

In his 18 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 (SAP APO), and MES (ME) 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.

You may contact the author at Gaetano_altavilla@hotmail.com.

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