Down Payment.

SAP FICO
Down Payment
(Advance Payment form customer)

(Advance payment to Vendor)
BY PRANAV JADHAV
(SAP Consultant | S4HANA Finance | MM)
Pranav Jadhav
[email protected]
Down Payment
A. Advance Payment From customer-

The SAP customer down payment process is required when advances are
received from customers to fulfill sales orders before the actual sale has
occurred. These customer advances are a liability for the organization which
will be cleared by future sales. Down payment requests are created when an
agreement has been made with the customer to provide a down payment for a
product before it has been delivered or for a service before it has been
provided. The customer pays a part of the total amount at the time of purchase
or before delivery. When invoicing takes place, this down payment is deducted
from the invoice.
The down payment process is a fundamental financial transaction that allows
businesses to receive advance payments from their customers before the
actual delivery of goods or services. This process serves to secure a
commitment from customer and is especially common in industries with long
sales cycle or high value transaction.
The down payment process in SAP FICO typically begins with the creation of a
down payment request, where the customer expresses their intent to make an
advance payment. Once approved, a down payment invoice is generated,
confirming the commitment and recording the financial transaction. This down
payment invoice is posted to the customer's account and a dedicated clearing
account in SAP.
The down payment process in SAP FICO helps maintain accurate accounting
records, prevents revenue leakage, and ensures that both customers and
businesses have clear visibility of the financial commitment. It's a crucial aspect
of financial management, enabling businesses to streamline their operations
and maintain transparency in their financial dealings.
Pranav Jadhav
[email protected]
1. Create GL Account for customer downpayment. T code- FS00
Advance receipts from customers need to be shown as liabilities on the balance
sheet. In order to support this requirement down payments received are
posted as special general ledger (G/L) transactions. An alternative
reconciliation account is required to post such transactions. When a down
payment is received from the customer the system updates the alternative
reconciliation account.
This account represents the alternative reconciliation account that will be
selected when a down payment is processed.
Click on create and take liability number range.
Company code and fill the type/description.
Pranav Jadhav
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Save.
Pranav Jadhav
[email protected]
2. Define reconciliation Account for customer down payment. T code- OBXR
To facilitate the recording of the down payment as a special G/L transaction, a
link must be created between the standard reconciliation account and the
alternative reconciliation account. To create this link, use transaction code
OBXR or use the customizing path below in transaction code SPRO:
Path-
Execute-
Click on account type ‘A’.
Enter your chart of account.
Pranav Jadhav
[email protected]
Take your reconciliation account and special GL account.
Save it.
Pranav Jadhav
[email protected]
3. Down Payment. T code- F-29.
The process begins when the advance payment is received from the customer.
Post the advance receipt as an accounts receivable down payment.
Path-
In the initial screen of transaction code F-29 enter the relevant required
information and be sure to enter special G/L indicator A as highlighted below:
Pranav Jadhav
[email protected]
Take customer number then bank account and amount.
Save.
Now you can see the customer line item report using transaction code FBL5N.
Take customer number company code and the report selection screen, select
the Open items radial button and the Special G/L transactions tick box. Execute
the report and you can see the advance receipt you just created, appearing as a
credit to the customer account.
Pranav Jadhav
[email protected]
4. Raise Invoice. T code- F-22
Now we post the sales invoice for the same customer from which the advance
was received in the previous step.
Path –
Open
Scroll down and take customer account. Posting key 01 is for customer debit.
Press the enter you get the popup how much downpayment is exist for your
customer.
Pranav Jadhav
[email protected]
Save/Post.
Pranav Jadhav
[email protected]
5. Down Payment Clearing. T code- F-39
we must transfer the advance receipt amount from the alternative
reconciliation account to the standard reconciliation account. That is to say, we
will move the down payment from the special G/L to the normal G/L.
Path-
Pranav Jadhav
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Select the available amount .
Save/Post.
Pranav Jadhav
[email protected]
6. Clearing Open Item. T code- F-32
Finally, we only need to clear the customer invoice against the normalized
advance payment we transferred in the previous step.
Path-
initial screen of transaction code F-32 enter the customer account and
company code, then click the Process open items button.
Select the amount of the document you want to clear.
Pranav Jadhav
[email protected]
Save/Post.
Pranav Jadhav
[email protected]
B. Advance Payment to Vendor.
Down payments are sometimes also referred to as advance payments. A down
payment is a payment made or received before the physical exchange of goods
and services. Once the receipt or delivery of goods and services occurs, the
down payment clears against the final invoice.
1. Create GL Account for Vendor Down Payment. T code- FS00

A vendor down payment needs to be recorded as an asset on the balance
sheet. In order to support this requirement down payments are posted as
special general ledger (G/L) transactions. An alternative reconciliation account
is required to post such transactions. When a down payment is posted to the
vendor account, the system updates the alternative reconciliation account
instead of the standard AP trade reconciliation account.
Click on create and take current asset number range.
Pranav Jadhav
[email protected]
Save.
Pranav Jadhav
[email protected]
2. Define reconciliation Account for customer down payment. T code- OBYR
facilitate the recording of the down payment as a special G/L transaction, a link
must be created between the standard reconciliation account and the
alternative reconciliation account. To create this link, use transaction code
OBYR or use path.
Path-
On the special G/L maintenance initial screen, double click on special G/L
transaction indicator A – Down payment on current assets.
Enter the relevant chart of accounts in the pop-up next screen and hit Enter.
Pranav Jadhav
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Enter your reconciliation account And downpayment account.
Save.
Pranav Jadhav
[email protected]
3. Advance Payment Posting. T code- 48.
If the vendor send a request for a down payment, but the payment is not yet
ready to be made, you may enter a down payment request as a noted item
with no accounting impact. If the payment is ready to be made, you can enter
the down payment straight away.
Path-
In the initial screen of transaction code F-48 enter the relevant required
information and be sure to enter special G/L indicator A as highlighted below:
Pranav Jadhav
[email protected]
Pranav Jadhav
[email protected]
4. Check Vendor Account Balance. T code- FBL1N
Path-
Now let’s see the vendor line item report using transaction code FBL1N. In the
report selection screen, select the Open items radial button and the Special G/L
transactions tickbox. Execute the report and you can see the advance payment
you just created, appearing as a debit to the vendor account as shown below:
Pranav Jadhav
[email protected]
Execute.
You can see.
Pranav Jadhav
[email protected]
5. Purchase Invoice Posting. T code- F-43/FB60
Post the invoice for the same vendor to which the down payment was issued in
the previous step. The accounting document will look similar to the below, with
a credit to the vendor account and debit to the inventory or expense account.
Path-
Pranav Jadhav
[email protected]
Pranav Jadhav
[email protected]
6. Clear Vendor Down Payment. T code- F-54
we have to transfer the down payment amount from the alternative
reconciliation account to the standard reconciliation account. That is to say, we
will move the advance payment from the special G/L to the normal G/L.
Path-
Fill the mandatory filed and take vendor account then click on process
downpayment .
Pranav Jadhav
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All advance payments for the vendor account are displayed. Select your
transaction and save/post.
Pranav Jadhav
[email protected]
7. Clearing Open item. T code- F-44
Finally, we only need to clear the vendor invoice against the normalized
advance payment we transferred in the previous step.
Path-
enter the vendor account and company code, then click the Process open items
button . In the open items clearing screen, all open amounts remaining on the
vendor account will be displayed. Double click the amounts of the documents
you want to clear. The amounts will turn blue and they will net to 0.00, as
demonstrated below:
Pranav Jadhav
[email protected]
Save/Post.
Pranav Jadhav
[email protected]

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SAP FICO

(Advance Payment form customer)

A. Advance Payment From customer-

Enter your chart of account.

Select the amount of the document you want to clear.

1. Create GL Account for Vendor Down Payment. T code- FS00

You can see.

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