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Vendor down payment


Please explain me the process of Vendor down payment (transactions and accounting logic)



Former Member
Former Member replied


a) Create a GL named Advance to Vendors as reconciliation account (FS00)

b) Go to OBYR give reconciliation account (crs ) and special GL account (created above... advance to vendors a/c)

c) Make down payment entry ( f-48) with special gl indicator A

d) Post a purchase invoice (f-43)

e) Transfer advance from Special gl (adv to vendors) to recon (crs) account (f-54)

f) Clear the recon account (f-44)

Normally we record transaction in vendor account (in AP) and it was automatically posted in vendor recon account ( in GL ). For this advance made we are creating an account advance to vendors account and maintaining a separate recon account for this advance payments. We are doing separately because, this advance payments, can setoff against a particular invoice or can keep that as advance. If you decide to setoff this advance against a certain invoice, then you need to transfer that special GL recon account to regular recon account.


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