In SAP we can make payments to Vendor or Receive payments fro Customer in installments.Below is the SAP standard configuration to do this;

We have two alternatives:

     1. Use installment payment terms

     2. Activate document split

1. Installment payments

Instead of entering several line items, you only enter the data for one item. The breakdown is carried out by the system automatically by means of the payment terms.

Configuration

IMG Menu Financial Accounting ® Accounts Receivable and Accounts Payable ®Business Transactions ® Incoming invoices/Credit Memos ® Maintain

Terms of Payment

Transaction Code OBB8

You need to create four payment terms. First you create the ‘main term’ for the Installment. Here R001. This payment term is set to vendor

master.

The Installments need also payments terms.Here you set the day limits for payments. In IMG activity Define Terms of Payment for Installment payments you

define the percentages and assign the Installment payment to the ‘main term’.

1.1 Create ‘main term’

Press New entries

Field name                                            Description

Payment terms                                        R001

Sales Text                                               Inst. pymnt terms 3 part. amnt

Account type: Customer                           Selected

Account type: Vendor                               Selected

Default for baseline date:                           Document Date

Payment terms: Installment payment         Selected

Choose  Save.

Choose  Back.

1.2 Create ‘Installment terms’

Press ‘New entries’

Field name                                         Description                      Description                   Description

Payment terms                                   ZR01 ZR02 ZR03

Sales Text                                         1st installment                  2nd installment              3rd installment

                                                         R001 (15 days)                  R001 (30 days)             R001 (45 days)

Account type: Customer                      Selected                         Selected                         Selected

Account type: Vendor                          Selected                         Selected                         Selected

Default for baseline date                       Document Date                Document Date              Document Date

Payment terms: Installment payment    Not selected Not selected Not selected

Payment terms: No. of days                15                                    30                               45

Choose Save.

Choose Back

1.3 Define Installments

IMG Menu Financial Accounting ® Accounts Receivable and Accounts Payable ® Business Transactions ® Incoming invoices/Credit Memos ® Define

Terms of Payment for Installment payments

Transaction Code     OBB9

Select New entries and enter definitions for payment term R001. Enter the percentages and payment terms for the Installments (ZR01-ZR03).

Define your partial amounts in percent for each terms of payment key affected. Make sure that you number the individual partial amounts consecutively.

1.4 Enter the new payment term in the vendor master.

Ensure that the key is entered in the vendor master record which represents the specified terms of payment.

1.5 Test how the payment term works

Create Vendor Invoice where we find the Installment as Split line item in the Simulation.

Simulate the posting

We can see that the invoice is divided in three Installments with their own due dates.

2 Amount split

If you have fixed Installments, you can use the Installment payment terms. However,if you need to change the amounts, this is not a good solution. Any change in Installment payment terms or invoice plans requires additional customizing. There is a way to use flexible amounts in the Installments. Enable Amount Split in the company code customizing.

Amount split enables the split of an invoice or credit memo final amount. A new tab Amount split will appear on the screens of the Enjoy transactions (FB60, MIRO). This method does not work for the old style transactions such as FB01.)

2.1 Test the amount split

Create a new invoice for vendor 200 (payment terms R001 in vendor master).

Open tab Amount split.

You can split the amount according to payment method or terms of payment. If you have entered a payment method, this entry has priority over the payment method in the terms of payment.

If no split is made – Installments according to payment term.

Make following split: 15000 is paid immediately (payment term 0001) and the rest with payment term ZR02.

Simulate the document

3 Customer Invoice Installment

The same way Customer Billing document account will Split using the Payment Term configuration.

This is one of the important features of Payment Term configuration.

Regards,

Suman Sardar