Customer Advance Payment

[Former Member]

I have a business scenario and I don't know the best way to implement it.

My client receives an order and creates a Sales Order. The customer has to make the advance payment. Once the payment is made, outbound delivery is made and goods are issued. It so happens that during the stock transfer, sometimes goods delivered are (marginally) less than the goods ordered. Hence, my client owes certain amount of money to the customer. The amount is noted both by the customer and my client.

Next time the order is received, the payment is adjusted and if there is still some amount left it is further carried over. This has to be replicated in the SAP system.

I first thought of going with the normal sales cycle and clearing the remaining amount with a credit memo. But in reality the amount is not returned. Then I thought of adjusting the credit memo in the invoicing of next Sales Order but I don't know if that is possible too.

[jignesh_mehta3 · Accepted solution]

Hello,

My opinion on your requirement:

I am sure you already have Credit Management active at your end & you just need to set zero (0) Credit LImit for this Customer.

Now create Sales Order & Credit Management will block Delivery as Credit LImit is zero. Now when you receive payment from the Customer, FI User will pass the accounting for the same, which will automatically increase the credit Limit of the Customer to the extenet of Payment Received.

Say you have received USD 1000 as payment from Customer. Subsequently you create Delivery & PGI. Now the actual Value of Goods dispatch happens to be USD 900 & USD 100 remains unused in Customer Master (it will be Customer Credit lying in your accounts).

Now as you do not want to issue Credit note for the same, the next time when you receive the advance Payment from the Customer say USD 900, the total available Credit LImit for the Customer would be USD 1000 (USD 900 + USD 100). Thus you can ship goods worth USD 1000 in thsi Transaction & Credit Management will allow you to do so.

The above will also make sure that Customer is not issued Goods of more value than his available Credit Limit.

Hope this helps,

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Thank you Mr. Jignesh. Your replies are as lucid as ever. You speak my language

I would like to ask about further specifics of following the aforementioned procedure by you to fulfill my requirement.

1. Where (Tcode?) and how exactly is the limit for a particular customer increased? Can it be done conveniently? Because by the looks of it, the user will have to play around with it often.

2. So basically the next time I define an order, the customer will have the credit limit as I changed it while adjusting for my previous order? Is that right? So if the order is less of lesser value this time compared to the last time, say for instance worth 600 instead of 1000 like the the first time, what happens then? I will have to decrease the credit limit for that customer to 500 to make the whole limit to 600?

[jignesh_mehta3 · Accepted solution]

Hello,

Thank you for appreciation. We are all giving our point of views. The solution provided by others above is also perfectly workable.

1. Now there is no need to change Credit Limit everytime.

Since your requirement is to create Delivery after receiving advance payment from Customer I have suggested this simple solution. Where you have to set Credit LImit (T-Code FD32) of Customer as zero or 1 USD.

Now make settings in Credit Management (T-Code : OVA8) such that system will block Delivery document if Credit Limit is exceeded. (Hope you are aware of Credit Mianagement settings, if not, kindlt search the forum & you will get necessary guidance)

2. Let me present you a example:

Sales Order 1001 - USD 2000

Credit Limit - ZERO (which will block the Order for Delivery)

Customer Payment Received - USD 2000

New Credit Limit (after posting Payment Receipt thru T-Code F-28) - USD 2000

Release the Order thru T-Code VKM3

Actual Good Issued to Customer (Invoice Value) - USD 1900

Now when above Transaction is completed the CREDIT balance in Customer A/c would be USD 100

Thus the Credit Limit now would be USD 100 (This will be automatically set & not setting is required for this)

Now, Sales Order 1002 - USD 3000

Credit Limit - USD 100 (as explained above)

Customer Payment Received - USD 2900

New Credit Limit - USD 3000 (Payment of USD 2900 + USD 100 already available)

Actual Goods issued to Customer (Invoice Value) - USD 3000

Balance in Customer A/c - 0.00

Hope this clarifies,

Thanks,

Jignesh Mehta

[Former Member · Accepted solution]

Wow, a breath taking reply man. Just before I use this, there is a second much simpler alternative that I had in mind and would like to put forth.

I make a sales order worth 1000. PGI worth 900. I wait until next order and before making it, I check the advance payment left, complete the previous order with rejection reason. Now all I have is 100 in advance payment by that customer. Can't I go about and receive the NEXT advance payment and just include the leftover amount with the 2nd payment?

Otherwise, your approach sounds simple and effective enough. Thank you so much.

[jignesh_mehta3 · Accepted solution]

Hello,

Your idea is good enough provided you are single End user doing all the functions (posting Payments, checking balances, Creating Sales Order, Delivery & Invoice).

But typically in large Organizations we need system based control. A user may make a mistake (by not checking whether Advance payment is recieved or not) & post PGI. What would you do then? Chase the Customer for payment?

That is why I suggested option of Credit Management to Block Delivery Document so that there is system placed control & there is no room for cheating / mistake.

Hope this helps,

Thanks,

Jignesh Mehta

[jpfriends079]

Any how, whatever amount you recieve from customer is taken in a special GL account.

Say, your client recieve downpayment 1000.

And they deliivered & invoice goods worth 600.

Now, your client FI user, in TCode F-32 will clear Downpayment recieve against invoice.

Then if you check customer account FBL5N, it will show 400 open & due on your client

Further, you deliivered & invoice goods worth 600.

Now, your client FI user, in TCode F-32 will clear remaining Downpayment recieve against invoice.

Then if you check customer account FBL5N, it will show 200 due to your client customer for payment.

So, you want further clarification on this, kinldy consultant FI team member on this.

Regards

JP

[prasanna_kumar4]

Hi

May be you can try with Special G/L account concept

for your better understand discuss with FI Consultant

by using the Special G/L concept , you can adjust the amount for that customer any invoice

if i am wrong please correct me

Regards,

Prasanna