Why Different Payment Terms and Incoterms at Customer Master

[Former Member]

Hi Frendz,

Normally everyone knows while creation of customer master we can see two different payment terms One is Company code Level and Second One is Sales Area Level,

And Incoterms 1 and Incoterms 2 at Sales Area Level..

Can any one explain why?

Hari Mandav

[Former Member · Accepted solution]

Firstly, we can maintain different payment terms at company code and sales area level because payment terms maintained in the sales area data are relevant when you are creating billing docs for the customer and the payment terms in the company code data are relevant when you are posting an FI invoice without sales transactions. For e-g when you are probably seling scrap to the customer and you would not like to create a sales invoice for that. In this case, the FI payment terms will apply and when you are selling normal goods to the customer via sales invoice, sales payment terms will apply.

Secondly, Incoterms 1 &2 are two parts of Incoterms are they are not different, e-g Incoterms 1 generally contains the key you define in customizing and Incoterms 2 is a free text field to enter any deviating/special description

Hope this helps

Chandra Kiran

[Former Member]

Hi,

INCO TERMS are nothing but INTERNATIONAL COMMERCIAL TERMS. These are the Standards established by the INTERNATIONAL CHAMBER OF COMMERCE

These produdres should be strctly followed by the COMPANY and the RECEIVING PARTY to let the SHIPPING successfully finish.

INCO TERMS 1 & 2 are defined as Primary and secondary

Primary will describe how the goods are moving and secondary will describe the location .

for example FOB will be the Primary INCO TERM and the FOB Japan will be the secondary INCO TERMS.

and the PAYMENT TERMS

are used to give the CASH DISCOUNTS based on the Payment due date.

There are some FI customers created in SAP, so for those customer we will use the PAYMENTT ERMS Maintained in the COMPANY CODE data and the Payment terms maintained in the SALES ORG date used for the customer who places the orders.

regards,

santosh

[Former Member]

Hi,

SAP has provided flexblity to have seperate payment terms for financials (Compnay code level) or sales (sales area wise) for customer. However while doing sales transactions the Payment tems defined at Sales area level would have priorty.

As far as INCO tems are concernd pls read both terms together i.e. Inco term 1 & 2 .Inco term 1specify internationaly accepted procedures e.g.FOB,EX etc while Inco term -2 proivdes additional information for primary inco term.

If the primary Incoterm is, for example, FOB ("Free on Board"), then the second field provides details of the port from which the delivery leaves (for example, "FOB Mumbai").

Hope it califies

Regards

Sanjay