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Paying Vendor in Installments Using Terms of Payment

Hi Friends,

In this document I’m going to explain about paying vendor in installments using terms of payment.

In SAP we can pay to the vendor in installments by using payment terms.

Example: Total invoice amount Rs.2000 Dated.01.07.2013 and this amount is paid to the vendor installments as given below

Installment1 Rs.1000 on 11.07.2013

Installment2 Rs.500 on 21.07.2013

Installment3 Rs.500 on 31.07.2013

the configuration required to achieve this is explained below.

Step1. We need to create one main terms of payment in transaction code OBB8 or in the path as shown below


Here select installment payment check box and select base line date as required. Enter the required description as shown below.


Step2. Create separate payment terms for each of installment and enter the number of days after which the installment is to be paid as shown below.

Ex. IF you have to pay in 3 installments after every 10 days of baseline date you have to create three payment terms with number of days as 10,20 & 30 respectively as shown below




Step3. Assign Main terms of payment to the installment payment terms and define the percentage of total invoice amount to be paid in that respective installment. Transaction code OBB9 or follow below path.


For example 50% of the total invoice amount is to be paid in first installment(after 10days from base line date), and remaining amount is to be paid in two half’s in the next two installments(after 20 and 30 days from baseline date respectively).



To test the above configuration, create a purchase order and enter the main payment terms in the PO header.



then carryout the goods receipt for PO  and do logistic invoice verification in MIRO.


In invoice simulation observe three line items posted against the vendor.


Also observe accounting document is created with 3 line items, the total amount to be paid to the vendor is distributed as per the percentage specified and each having separate payment terms and due date as per the configuration


-End of document

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