This process covers the steps to be performed for payment to vendors in the SAP Finance module.Business Process:
This process covers the payment to Suppliers, Contractors and Service Providers. The payments are made against the Bills received and cleared for payments. Payment terms and deductions may consist of Liquidated damages, Retention money, Mobilization Advance, relevant taxes, Advance against Bank/Performance Guarantee, etc. Further, certain chargeable issues, penalties and deductions/adjustments (Debit Notes/Credit Notes) are also to be considered while making the payments.
TDS and Other relevant Taxes are deducted at the time of Invoice Verification and Advance Payments, whichever is earlier is adjusted at the time of payment by the Accounts Department.
Payments will be made to the vendor based on the outstanding invoice in the vendor account. System will propose the list of open item from the vendor account with reference Bill No, for which the payments are due. This can also be selected based on the various parameter for search like bill amount, due date, and as per instruction received from Site Incharge. System will propose the following entry on selecting the outstanding bill at the time of payment. Multiple invoices can be selected and a single cheque can be issued for the same or separate cheques for supply and services.
Payment Terms can be changed / revised by MM in PO (Purchase Order), if required.
Partial clearing will be used where a part payment is to be made for a vendor open item. For example – Part payment of $5000 made for the vendor invoice of $10000/-. If the Partial Clearing is used, system will post a line item in debit for the payment made. The system however, will not clear the invoice till the entire invoice amount is cleared and all such line items are shown as open items till the time it is fully cleared. However the system will show the net balance in normal account.
However, using partial clearing method both the items i.e. the invoice and the part payment in the above example remain as open items till the invoice is fully cleared.
On account payment
On account payment to the vendor irrespective of the outstanding bill will be done by passing a separate entry to the vendor account which remains outstanding till the same is clear against the invoice. This on account payment needs to be cleared against the actual invoice booked in vendor account in order to show the proper statement of outstanding balance & ageing of vendor.
Whenever there is on account / advance payment made to the vendor, account shows the open items in its Normal & Special G/L account. After the invoice verification or another subsequent adjustment is done the same is cleared against the on account payments / advance payments. Here under the residual payment (balance) option, the system clears the original line item and creates a new line item for the remaining outstanding amount.
For example there is a credit line item of $10000/- in the vendor account against which a payment of $5000 is made. By choosing Residual Payment system will clear the old line item of $10000 and show a new Outstanding Balance of $5000.
In SAP, these outgoing payment processes are managed with following transaction codes
Down payment Request
Advance / Down Payment to Vendor
F-53 / F-58
FB02 / FB03
Change Document / Display Document
FBZ5 / FCH5
Automatic Cheque printing / Manual Printing
Reset Clearing Document
Display Vendor Act Balance
Display Customer Line Items