Multiple payment terms required

[Former Member]

I´m working in a company that works with projects and each project has a different payment terms. So for every new project a new payment term is required to be created.

In order to manage that previous consultant have decided to use the billing plan as follow:

1. Advanced payment - 20%

2. Advanced payment - 80%

3. Invoice - 100%

The above is how the billing plan is set. Notice that the invoice is used to invoice the customer and also for accounting purpose. However for cash flow purpose the advanced payments are created, so that the company can know when the payments will really going to happen.

I would like to know if someone can help me to better understand the best way to proceed when we have to create new payment terms every time, Is the above the best approach to solve that?

Thanks

Aislan

[jignesh_mehta3]

Hello,

I do not thing you need different payment terms everytine you create a new Project.

In your Project (T-Code - CJ20N) you can create Milestones. Now, assign these Milestones in respective line Item in Sales order.

Only when these Milestomes are marked as Complete in Project System, you can create Invoice from SD side. This will help in creating Sales Invoice only when the payment actually due.

Thanks,

[former_member205178]

Hi,

While I don't like to say it as you see it -> this is a real bad process mapping. You have to relook at the process.

Billing Plan as articulated by others is only used in two ways -> Periodic or Milestone Billing.

then you might be better off with looking at PS features too. That way they might seamlessly work for your process. 

Apart from that, there seems to be an issue with how the revenue is recognized too. You guys really need to go back to the drawing board.

Without going into too many details if the Projects which are being mapped through your process, if they are:

1. Complicated
2. Frequent
3. Need Detailed Tracking

then you might be better off looking at the PS features.

Hope my opinion is something which you guys will think about for process betterment.

Thanks.

[former_member184065]

Dear,

Whatever you are following way is right .You can easily accomplish it by Periodic Billing Plans.

You can get so many threads / documents in Google on this .

If you have any doubts let me know.

Thanks,

Naren

[suman_sardar2]

Hi Aislan,

We are using Billing Plan for creating an Invoice and you will agree with that.

But Payment Terms is related to AR Accounting means is it going to Over due in 15 days or whatever and also Customer can get a discount if he pays before the Due date.

Therefore, if you are talking about the Payment Terms as per Your Customer Purchase Order, yes you have to follow the SAP Billing Plan either Milestone or Periodic Billing in your Sales Order.

Please clarify the needs to understand your requirement.

Also there is one of my post related to Payment Terms, you can go through to have a view in Multiple payment Terms.

Installment Payment

Thanks,

Suman$

[Former Member]

Hi Suman,

This is happening, because we have to invoice the customer in the total value, however the payment will happen as per the contract, which can have different payment days, depending on the contract.

What has been done is.

A project in PS are created with the following a milestone (Let´s assume that as per the contract the customer will pay in 3 installment):

Billing Plan Line 1 - INVOCE  - This milestone remains blocked for billing until the due date arrives. This will invoice the customer the TOTAL contract value, however mentioning that the payment will happen as per the contract.

Billing Plan Line 2 - Advanced Payments - This milestone is to reflect the date of payment 01

Billing Plan Line 3 - Advanced Payments - This milestone is to reflect the date of payment 02

Billing Plan Line 4 - Advanced Payments - This milestone is to reflect the date of payment 03

Billing Plan Line 5 - Advanced Payments - This milestone is to reflect the date of payment 04

The INVOiCE milestone is unblocked only when the due dates arrives and it describes the other milestone in the invoice, mentioning that those are the payment dates.

The issue is that for accounting reason, the ADVANCED MILESTONE are all unblocked and get executed via VF01, in order to generate cash flow, however ALL THE TIME those milestones have due date in the future, sometimes atfer a year, and the finance team runs the billing for them in advance to generate cash flow and to let the company know when the payment will happen, as there is no payment terms in use, as explained before.

The issue is that the system is not accounting correctly since the due date is in the future in a closed finance period. In this way a lot of logs remains in VFX3 transaction pending for accounting and affecting the project/company results.

Please let me know if it is clear and THANKS A LOT for your help.

Kind Regards,

Aislan

[former_member184065]

Dear,

The issue is that the system is not accounting correctly .

could you please let me know ,what do you mean by that sentence exactly .

Thanks,

Naren

[Former Member]

Hi Naren,

The system is not accounting properly because the finance team is running the VF01 for a billing plan line that has due date for three months later or whatever out of the current fiscal period.

In this way, as the vf01 is executed in july for exame for a billing plan line that has due date in september, as september is not an open period for accounting yet, the document is created, bur as accounting fails it goes to the vfx3 log.

Please let me know if it clarifies.

Thanks

Aislan

[Former Member]

Hi Aislan,

I guess your query is regarding the due date in accounting line items, so that is reflects currectly in the cash flow, i guess more to do with customer ageing.

You can manually change the "base line date"in the accounting document, double click on the accounting line item, and you can change the base line date.

You need to check with your FI consultant for that, If this solution is not accepted then i think you will have to do a devlopment effort. Also i am sure you are aware that each milestone can have a different payment term.

Let me know your response on the same.

Regards

Aadesh