Advance Payments To Vendors

After vendor invoice posting and invoice payment, let us see how to do advance payments to the vendors. Here we’ll use the transaction code F48 for the advance payment. So this is the SAP menu path. First, we’ll go to Accounts Payable, then document entry. Under that we’ll go to down payment that is for advance payments. So we’ll use the transaction code F48.

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After that we’ll have to provide the header data details like company code, the currency rate, the vendor account number and we have to set a special GL indicator that is general ledger indicator.

So here we’ll put the GL indicator as 2, that is supplier advance, this is the advance payment being given to the vendor. Then we’ll maintain the bank account details like account number and the amount which is to be paid in advance. After maintaining these details we’ll go to the tax deduction details.

Now after specifying the company code, vendor code, bank account number and the amount to be paid is in advance, then we click on the enter button. Once we click on the enter button, we’ll assume that the tax, that is the TDS is defaulted under that payment. Now if no TDS is to be deducted then the TDS codes need to be manually deleted from the screen below. So now here in the screen we’ll delete the TDS manually. So here we’ll go to the withholding tax button, where we have the TDS to be deducted, from there we’ll delete the details manually and we’ll click on the save button to save the settings which we have done manually. So in this way we’ll do the settings for the TDS. Now after that we’ll press on the enter button till we get this particular screen that is a display overview screen where it contains all the details of the line items for that particular company code.

And finally we’ll click on the Simulate button and we’ll post that particular document. So this is how we do the simulation and posting of that particular payment So this is how we do the advance payment to the vendors.

 

Next we’ll see how to clear the down payment, that is the clearing of the advance payments. Now we’ll use the transaction code F54 for clearing the payment.

Now we’ll use the same path as used in the section for down payment, i.e. advance payment. Under that we’ll click on F54, that is clearing the down payment.

Now here in the next screen we’ll provide the header details like the account number for that vendor and we’ll provide the fiscal year under which that is to be carried out. And we’ll have to provide a text that is clearing the advance description to that particular down payment.

 

Now after the details provided for the vendor code and the date, the system displays the invoice number in the primary screen where we remove the invoice. Then we’ll click on the Process Down Payment icon. So here we’ll get a screen where we’ll select the transfer posting and provide the amount which we want to match with the invoice, and then we’ll simulate the transaction. 

So here this is the down payment which we need to do. So here we’ll click on this particular down payment and we’ll select the transfer posting button. So here we’ll select the transfer posting and we’ll provide the amount which we want to match with the available invoice. And after this, we’ll finally click on the Simulate icon. So we’ll go to Document and we’ll click on the Simulate icon to simulate the transaction. So this is how we do the clearing of the down payment. After we click on the simulate button we’ll get a screen where it will provide the details of the line items for that particular vendor.

So here we have the line item details line item 1 and line item 2 once we click on the simulate icon. 

Now here if all the details in the transaction are okay and the details are correct, we’ll click on the save button. So after clicking on the save button, we’ll get a pop up message stating that that particular document was posted in company code 1000. After every time we do the simulation and we post those entries, we get a document number that is generated. That document number is 815000034 in our case. So it will generate a message that this document was posted in company code 1000.

 

Now we’ll see how to clear the invoice with the advance amount, that is the advance payment done. So we’ll go to transaction code F44 for clearing the amount. So there we’ll provide the details of the account number and the company code details and the clearing date for that. And we’ll click the radio button Amount, and now we’ll select the Process Open Items, and we’ll clear the bills. So this is how we do the clearing of the invoice with the advance amount. Lastly under accounts payable section, we’ll see Memorandum Entries or we say Noted Items. Now here we’ll use a transaction code F57. 

Now this is the SAP menu path. First, we’ll go to Accounting, then Financial Accounting, then we’ll go to Document Entry. Under that we’ll go to Others, and in Others we’ll go to F57 transaction code that is for noted items or memorandum entries. Now here the process is the same as that of the accounts receivable. Now, accounts receivable will be covered in our next session. So, we’ll describe this particular topic in our next session in brief.