In this tutorial, as part of our free online SAP FI training, we will describe the SAP customer down payment process. A down payment is a payment made or received before the physical exchange of goods and services. Upon receipt or delivery of the goods or services, the down payment is cleared against the final invoice.
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. In this tutorial, we describe the below steps involved in setting up the SAP customer down payment process:
- Create Alternative Reconciliation General Ledger Account
- Link Alternative and Standard Reconciliation Accounts
Once we have completed set-up, we will demonstrate the steps of the SAP customer down payment process by walking through them.
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You may recognize that the content of this tutorial appears very similar to our article on the SAP vendor down payment process. Here, we describe the accounts receivable procedure, while the vendor down payment process tutorial concerns accounts payable activities.
Create Alternative Reconciliation General Ledger Account
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 instead of the standard AR reconciliation account.
Let’s create a new G/L account as an alternative reconciliation account using transaction code FS00. Enter the required fields, including the following information:
- Account texts should be similar to Advance from Customers
- Account group Liabilities
Press Enter to check for errors then Save the G/L account 
.
This account represents the alternative reconciliation account that will be selected when a down payment is processed.
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Link Alternative and Standard Reconciliation Accounts
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:
Financial Accounting – Accounts Receivables and Accounts Payable – Business Transactions – Down Payment Received – Define Reconciliation Accounts for Customer Down Payments
On the special G/L maintenance initial screen, double click on the line with special G/L transaction indicator A – Down payment. Enter the relevant chart of accounts in the resulting pop-up screen and hit Enter.
Link the standard AR reconciliation account with the alternative reconciliation account number you created in the last step. In our example, 200110 is the standard reconciliation account and 100502 is the alternative reconciliation account.
Click the Save button 
.
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If we receive a normal payment against an invoice, the standard account 200110 will be leveraged. However if we receive an advance payment, we use special G/L indicator A and the system will automatically use the alternative account 100502 due to this linkage.
Execute SAP Customer Down Payment Process
Now that we have completed the set-up for the SAP customer down payment process, let’s walk through a demonstration. We will execute the process in sections as follows:
- Post Advance Receipt
- Post Sales Invoice Against Advance Receipt
- Transfer Posting
- Clear Normal Items
Post Advance Receipt
The process begins when the advance payment is received from the customer. Post the advance receipt as an accounts receivable down payment.
| Menu path | Accounting – Financial Accounting – Accounts Receivable – Document Entry – Down Payment – Down Payment |
| Transaction code | F-29 – Down Payment |
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:
Post the customer down payment. The accounting document will look similar to the below, with a credit to the customer account and debit to the bank account entered in the initial screen:
Now let’s see the customer line item report using transaction code FBL5N. 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 receipt you just created, appearing as a credit to the customer account as shown below:
Post Sales Invoice Against Advance Receipt
Now we will post the sales invoice, signifying that the goods have been delivered or the service has been rendered. This will be offset against the down payment and, if no further payment is required, cleared in the next step.
| Menu path | Accounting – Financial Accounting – Accounts Receivable – Document Entry – Invoice – General |
| Transaction code | F-22 – Invoice – General |
Post the sales invoice for the same customer from which the advance was received in the previous step. The accounting document will look similar to the below, with a debit to the customer account and credit to the sales account:
Again, let’s see the customer line item report using transaction code FBL5N. In the report selection screen, select the Open items radial button and both the Normal items and Special G/L transactions tickboxes. Execute the report and you can see both the invoice you just created and the advance receipt from the previous step remain as open items on the customer account:
Transfer Posting
Next, 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.
| Menu path | Accounting – Financial Accounting – Accounts Receivable – Document Entry – Down Payment – Clearing |
| Transaction code | F-39 – Clearing |
In the initial screen of transaction code F-39 enter the following information:
- Document and posting dates
- Company code
- Customer account
- Sales invoice number created in previous step
Click the Process down pmnts button 
to see the advance payments.
All advance receipts for the customer account are displayed. Select those that you would like to include in the transfer posting. Click the Save button 
.
Take a look at the customer line item report using transaction code FBL5N. In the report selection screen, select the Cleared items radial button and the Special G/L transactions tickbox. Execute the report and you can see that the advance receipt document you posted in the first step is cleared by the transfer posting you just made:
Clear Normal Items
Finally, we only need to clear the customer invoice against the normalized advance payment we transferred in the previous step.
| Menu path | Accounting – Financial Accounting – Accounts Receivable – Account – Clear |
| Transaction code | F-32 – Clear |
In the initial screen of transaction code F-32 enter the customer account and company code, then click the Process open items button 
. In the open items clearing screen, all open amounts remaining on the customer 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:
Click the Save button 
.
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Let’s look at the customer line item report one last time via transaction code FBL5N. In the report selection screen, select the Cleared items radial button and the Normal items tickbox. Execute the report and you can see that the customer invoice you created in step two and the normalized transfer posting you made in the last step are now cleared. At this point the SAP customer down payment process is complete!
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Did you like this tutorial? Have any questions or comments? We would love to hear your feedback in the comments section below.It’d be a big help for us, and hopefully it’s something we can address for you in improvement of ourfree SAP FItutorials.
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FAQs
What is the difference between down payment and down payment request in SAP? ›
Down payment request is "noted" item. It is not real posting and it is not part of the account balance, whereas down payment is a real accounting document.
What is down payment in SAP FI? ›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.
What is the use of F 54 in SAP? ›IMPORTANT: When the Down Payment is paid, the GR/SES or Invoice is approved, or F-54 is used to manually clear the DP, the receivable line automatically is blocked for payment with payment block A (this should NOT be removed). SPGL are used to identify transactions that should be reported to alternate G/L accounts.
What is the journal entry of down payment? ›A down payment received before it is earned is recorded with a debit to the current asset account Cash and a credit to the current liability account Customer Deposits.
How do I clear my customers down payment? ›- Menu Path: SAP Menu –> Accounting –> Financial Accounting –> Accounts Receivable –> Document Entry –> Down Payment –> Clear Customer Down payment.
- Transaction code: F-39.
- From the Accounts Receivable or Accounts Payable menu, choose Document Reverse .
- Enter the document number of the down payment request, the company code, and the fiscal year.
- On the same screen, enter the posting date and posting period of the reversing document.
- Step 1: Execute transaction code :F-47″ in the SAP command field or follow the SAP menu path Accounting – Financial Accounting – Accounts Payable – Document Entry – Download Payment – Request.
- Step 2: On Down Payment Request: Header Data, update the following details.
- Vendor.
- Bank.
A down payment is a payment made or received before the physical exchange of goods and services. Upon receipt or delivery of the goods or services, the down payment is cleared against the final invoice.
What is a down payment request? ›Down Payment Request. Down payment requests can be used when a vendor or customer submits an application for an advance payment to be made at a certain time.
What is a down payment? ›Down Payment Definition
A down payment on a house is the cash that the buyer pays upfront in a real estate transaction and other large purchases. Down payments are typically a percentage of the purchase price and can range from as little as 3% to as much as 20% for a property being used as a primary residence.
What is the difference between F-44 and F 54? ›
If you will use the f-54 you will clear only the down payments. But if you will use the f-44 you can clear both the down payments and the normal items.
What is the use of F 43? ›The SAP TCode F-43 is used for the task : Enter Vendor Invoice. The TCode belongs to the FIBP package.
What is manual payment in SAP? ›There are two ways to issue outgoing payments in SAP. The first and most commonly used way is to use automatic payments via Transaction F110. The other way to issue payments is referred to as manual payments. Two transaction codes are used for manual payments: Transaction F-53 and Transaction F-58.
What is the formula for calculating down payment? ›Down payment is calculated using the formula: down payment = down payment percent times purchase price. The down payment percent needs to be converted into a decimal for this calculation.
What is downpayment example? ›A common example of a down payment is down payment on a house. The home buyer may pay 5% to 25% of the total price of the home upfront, while taking out a mortgage from a bank or other financial institution to cover the remainder.
Is down payment shown in balance sheet? ›Down payments are typically recorded as prepaid expenses by the payer and recorded as assets on the balance sheet.
How do you use F 39 in SAP? ›...
SAP TCode (Transaction Code) - F-39.
| SAP Tcode | F-39 |
|---|---|
| Description | Clear Customer Down Payment |
| Package | FIBP |
| Program Name | SAPMF05A |
| Screen Number | 115 |
The down payment requests are created in the source system in Financials or via milestone billing in SD. The following graphic shows the process and data flow between the source system and the Central Finance system for the request-based down payment integration with Sales and Distribution (SD).
Which is the first step in the procedure of making down payment in the customer area? ›Which is the first step in the procedure of making down payments in the customer area? Down payment request Down payment received Customer invoice Clearing. When preparing the balance statements for year-end closing, you need to enter the disputed or doubtful receivables as flat-rate value adjustments.
How do I create a down payment request for a purchase order in SAP? ›First step is to create a Purchase Order with role Purchaser and app 'Create Purchase Order -Advanced'. Fill all necessary fields, go to 'Invoice' tab and select 'DP Category' 'Mandatory Down Payment'. Enter either a Down Payment Amount or a Down Payment Percentage and save the Purchase Order.
What is FB08 in SAP? ›
FB08 is for reversing a normal FI document that is not considered a clearing document, whereas FBRA is used to reverse “clearing” documents such as a payment document. Key in document number. Key in Company Code.
How do you use F 48 in SAP? ›- Document date: Date of transaction occurred.
- Type: Document type classifies accounting documents (e.g. KZ- Vendor Payment)
- Company code: Enter company code.
- Posting date: Posting date would be defaulted as the system date.
% of the quoted value – <amount>, and type the percentage amount of the original quote that you wish to invoice for. For example, type 50 to invoice for 50% (half) of the quoted amount shown. progress amount / deposit, and type the lump sum amount that you wish to invoice for.
What is AR down payment invoice in SAP b1? ›A/R down payment invoice for the amount paid, linked to the sales order. Incoming payment for the amount paid, linked to the A/R down payment invoice.
What are the payment terms? ›Payment terms provide clear details about the expected payment on a sale. Often, payment terms are included on an invoice and specify how much time the buyer has to make payment on the purchase.
What is Fb03 TCode in SAP? ›Business process– Fb03 is used to display a document. It is one of the most commonly used transaction codes. FB03 is used to display finance documents only. Suggestion– Add this tcode to your favorites. Menu Path- Accounting-Financial Accounting-General Ledger-Document-Fb03 Document Display.
What is the use of F 44 in SAP? ›The SAP TCode F-44 is used for the task : Clear Vendor. The TCode belongs to the FIBP package.
What is the use of F 48? ›The SAP TCode F-48 is used for the task : Post Vendor Down Payment. The TCode belongs to the FIBP package.
What is the T code for customer payment in SAP? ›Use T Code F110 for payment run.
How do you use F 28 in SAP? ›- Step 1) Enter the transaction code F-28 in the Command Field.
- Step 3) Press the Process Open Items Button to display the list of Pending Invoice.
- Step 4) Assign the Payment Amount to Appropriate Invoice so as to balance the Payment with the Invoice Amount.
How do you use F 29 in SAP? ›
...
SAP TCode (Transaction Code) - F-29.
| SAP Tcode | F-29 |
|---|---|
| Description | Post Customer Down Payment |
| Package | FIBP |
| Program Name | SAPMF05A |
| Screen Number | 111 |
In this page you can discover 13 synonyms, antonyms, idiomatic expressions, and related words for down payment, like: earnest money, deposit, net worth, security, , binder, earnest, front-money, downpayment, refinance and money.
What is zero down transaction? ›What then is a zero down payment Car Loan? A zero-down payment Car Loan is when the bank offers to pay the entire value of the car as part of the loan. For example, HDFC Bank offers up to 100% finance on its Car Loans. That essentially is a zero-down payment Car Loan.
Why is a down payment important? ›That's because a down payment on a home reduces the risk to the lender in several ways: Homeowners with their own money invested are less likely to default (stop paying) on their mortgages.
Is 5 down payment enough? ›There are conventional loan options that require a down payment of as little as 3 percent, but many lenders impose a 5 percent minimum. If the loan is for a vacation home or a multifamily property, you could be required to put down more, generally 10 percent and 15 percent, respectively.
What is the difference between deposit and down payment? ›While an earnest money deposit functions as a promise to the seller, a down payment is a promise to the lender facilitating your mortgage loan.
What is the use of F 44 in SAP? ›The SAP TCode F-44 is used for the task : Clear Vendor. The TCode belongs to the FIBP package.
How do you use F 47 in SAP? ›Hey f-47 is for booking down payment request which is a notification alone.. So it is a kind of a special GL transaction, which may not have an accounting impact. That is why it is termed as a special GL transaction. It is just na indication transaction and does not hit the normal reconciliation account.
What is down payment process in SAP SD? ›Down payment is a process of receiving amount i.e. down payment, before actual handing over the goods to end customer. Using below configuration we can achieve down payment scenario without billing plan. Condition Type: AZWA, will help to create the down payments need to receive from end customer.
What is customer down payment? ›A down payment is a payment made or received before the physical exchange of goods and services. Upon receipt or delivery of the goods or services, the down payment is cleared against the final invoice.
What is the difference between F 44 and F 54? ›
If you will use the f-54 you will clear only the down payments. But if you will use the f-44 you can clear both the down payments and the normal items.
What is GL clearing? ›The GL Clearing Module functionality automatically matches and clears open items by user defined criteria on any account field. Clearing criteria is flexible and is user defined as required – no configuration changes needed.
What is manual payment in SAP? ›There are two ways to issue outgoing payments in SAP. The first and most commonly used way is to use automatic payments via Transaction F110. The other way to issue payments is referred to as manual payments. Two transaction codes are used for manual payments: Transaction F-53 and Transaction F-58.
What is Fb03 TCode in SAP? ›Business process– Fb03 is used to display a document. It is one of the most commonly used transaction codes. FB03 is used to display finance documents only. Suggestion– Add this tcode to your favorites. Menu Path- Accounting-Financial Accounting-General Ledger-Document-Fb03 Document Display.
What is the use of F 43? ›The SAP TCode F-43 is used for the task : Enter Vendor Invoice. The TCode belongs to the FIBP package.
What is FBA8 used for in SAP? ›The SAP TCode FBA8 is used for the task : Clear Vendor Down Payment. The TCode belongs to the FIBP package.
How are customers down payments integrated with SD? ›The down payment requests are created in the source system in Financials or via milestone billing in SD. The following graphic shows the process and data flow between the source system and the Central Finance system for the request-based down payment integration with Sales and Distribution (SD).
How do you record a down payment in accounting? ›To record the cash down payment as a check simply create a new bill, with the loan liability as the only line item for the bill. This will reduce the loan liability by the amount of the down payment thereby correcting the loan liability account balance.
Which transaction will you use to post a down payment for a customer? ›We use customer down payment process where our down payments are booked with transaction code F-28(incoming payment) instead of F-29 and also we use F-32(customer clearing) for clearing the down payment against the customer invoice. This clearing books with document type SU.
What is downpayment example? ›A common example of a down payment is down payment on a house. The home buyer may pay 5% to 25% of the total price of the home upfront, while taking out a mortgage from a bank or other financial institution to cover the remainder.
What is the formula for calculating down payment? ›
Down payment is calculated using the formula: down payment = down payment percent times purchase price. The down payment percent needs to be converted into a decimal for this calculation.
How does a down payment work? ›A down payment on a house is the cash that the buyer pays upfront in a real estate transaction and other large purchases. Down payments are typically a percentage of the purchase price and can range from as little as 3% to as much as 20% for a property being used as a primary residence.