TERMS OF PAYMENT

TERMS OF PAYMENT

01          Payable immediately  - Due net

Path : SPRO-Financial accounting –Accounts receivable and accounts payable –Business transactions-Incoming invoices / Credit memos – Maintain terms of payment

Select new entries button

Payment terms                     :AML1

Select customer check box

Select vendor check box

Default for base line date

No default                             :No.of purchases during the month base line date at the time of Invoice posting –Blank

                                                For all purchases during the month give month end date.

Document date                    :Party bill date

Posting date                          :Goods receipt date

Entry date                              :Quality approval date

Payment terms                     :If the payment is made within 10 days -3% cash discount

                                                If the payment is made within 20 days -2% ash discount payable within 30 days

Under default for baseline date: Select posting date radio button

                                                Percentage   No.of days

Term 1                                      3                    10

Term2                                       2                    20

Term3                                     -                       30

Press enter

Select save button or Ctrl+S

Press enter to save in your request

Cash Discount Received 

Trade discounts are to be adjusted to purchases where as cash discounts are to be shown under other income.

Creation of GL master –Cash discount received other income (FS00)

Give the GL A/c no.             :300101

Company code                     :AML

Select with template button

Give the GL account 300100 exchange gain

Company code                     :AML

Enter

Change short text and GL account long text to cash discount received.

Save

Assignment of account for automatic postings:

Path :SPRO-Financial accounting-Accounts receivable and Accounts payable-Business transactions-Out going payments-Out going payments global settings –Define accounts for cash discount taken. (Tr Code is OBXU)

Give the Chart of Accounts                        :AML

Enter

Save

Give the account no.300101 cash discount received

Save

Press enter to save in your request

Purchase invoice posting (F-43)

Document date                                :25.10.2008

Posting date                                      :01.11.2008

Entry date                                          :Today’s date

Type                                                   :KR

Company code                                 :AML

Currency                                           :INR

Posting key                                       :31

Account                                             :4200001

Enter

Amount                                              :100000

Payment terms                                 :Select AML1

Text                                                     :Purchase invoice posting

Enter

Ignore the warning message press enter

Posting key                                       :40

Account no.                                      :200120 Inventory raw material

Enter

Amount                                              :*

Business area                                  :AMLH

Text                                                     :+

From the menu select document –Simulate and Save

Go and see the vendor account (Transaction code is FBL1N):

Vendor account                               :4200001

Company code                                 :AML

Select open item radio button

Select normal items check box

Execute

Form the menu select change layout button

Form the hidden fields column

Select current cash discount amount

Select amount in document currency under column-contain

Select left arrow or show selected fields button

Select copy button

Outgoing payment with clearing (F-53)

Document date                                :Today’s date

Type                                                   :KZ

Company code                                 :AML

Clearing text                                     :Out going payment

Account under bank data               :200105 SBI current account

Business area                                  :AMLH

Amount                                              :97000

Text                                                     :out going payment

Account                                             :Under open item selection 4200001

Select process open items button

Double click on payable amount              :100000

From the menu select document Simulate

We get a message correct the marked line items.

Double click on blue font

Text enter                                          :+

Save

Automatic payment program (APP)

System will                                        -Check due dates

                                                            -Issue check

                                                            -Pass the enter and cleared party account

                                                            -Generate payment advance

                                                            - update check register

The check lot should be sequential –we are not programmer –system given payment program.

Check format and payment advice format

APP will be used by cash rich companies

They run weekly / for every 10 days /For every 15 days

At the time of APP run, we have to give bankwise ranking with available amounts.

            SBI                  1                      1000000

            IDBI                2                      500000

            ICICI               3                      300000

It will issue checks from SBI upto 10 lakhs. Then afterwards it issued form IDBI upto 500000 – Then it goes to ICICI and issued up to 3000000

After run, it gives a proposal – In the proposal it shows for which parties for which bills from which bank it is going to issue to checks.

We can edit proposal                                  By blocking some invoices for payment

                                                                        Or

                                                            By charging bank

Due                Party X                       Party Y

1                                             1

2                                             2

3                                             3

4                                             4

5                                             5

Black invoices 4,5 and make the payment for 1,2 and 3 use the fund for party bill payments.

System is issuing form SBI for party X 3 bills –party is having account in ICICI-Change bank from SBI to ICICI.

Setup payment methods for country for payment transactions

Path :SPRO –Financial accounting-Account receivable and account payable –Business transactions-Outgoing payments –Automatic outgoing payments  -Payment method /Bank selection for payment program-Setup payment method per country for payment transactions 

Select new entries button

Country                                                          :IN

Payment method                                         :B

Description                                                    :Check

Select outgoing payments radio button

Select check radio button

Document type for payment                      :KZ

Clearing document type                             :KZ

Payment medium program                        :RFFOUS_C

Name of print date set                                 :LIST1S

Save

Press enter to save in your request

Setup payment methods per company code for payment transactions:

Same path

Select new entries button

Paying company code        :AML

Payment method                 :B

Minimum amount                :10

Maximum amount               :9999999999

Select payment per due day check box

Select from data button

From for the payment medium: F110_PRENUM_CHECK

Drawer on the form                         : for Aravind Mills Limited

Authorized signatory

Save

Press enter to save in your request

Setup all company codes for payment transactions:

Same path

Select new entries button

Company code                     :AML

Paying company code                    :AML

Separate payment per business area  check box

Out going payment with cash discount from : Bank interest rate  1.5% per month

                                                                                            18% per annum

Payment term:         

If we make the payment within 30 days we get -1% cash discount

Due within 60 days

System will payment 60 days since discount is less than bank interest rate.

Within 30 days         :Interest for  month 1.5

Within 60 days         :Interest for month 1.5+1.5

Payment terms:

If we make the payment within 30 days we get 2% cash discount.

Due with in 60 days

System will within 30 days since discount more than bank interest rate.

Maximum cash discount:

Payment term:

If we make the payment within 30 days we get 1% cash discount. Due within 60 days.

Though we are not entitled, system claims 1% cash discount and make the balance payment only even if it is paid with 60 days.

Special GL transaction to be paid under vendors : Select  A (Advances)

Save

Press enter to save in your request

Setup paying company codes for payment transactions:

Same path

Select new entries button

Paying company code                    :AML

Select forms button

From for the payment advise F110_D_AVIS

Select sender details button

Text ID            :Select ST (ST stands for Text)

Letter header                                                :F_0001_HEADER

Footer                                                             :F_0001_FOOTER

Sender                                                           :F_0001_SENDER

Save and Press enter to save in your request

Creation of sequential check lots (FCHI)

Paying company code                                :AML

House bank                                                  :SBI

Account ID                                                    :SBI1

Select change button

Select create button

Lot number                                                   :2

Check number                                             :800001

To                                                                    :801000

Deselect non-sequential check box

Short information                                         :SBI

Purchase date                                              :Today’s

Enter and save

Assign payment methods in vendor master:

Path :Accounting-Financial accounting –Accounts payable-Master records –Maintain centrally-Change (XK02)

Give the vendor no.             :4200001

Company code                     :AML

Select payment transaction check box under company code data

Enter

Payment methods               :Select ‘B’

Payment block                     :If we don’t want to make the payment to this party in this

run,  select -Skip account

Alternative payee                 :We have purchased from Birla Chemicals Limtied –BCL has to make the payment to party XYZ –BCL instructs us to make the payment to XYZ-in alternative payee give XYZ no. when we run APP ,check will be in the name of XYZ and party clearing will be BCL

House bank                          :BCL in having account in ICICI –It instructs us to issue check from ICICI only – We give house bank ICICI- check we issued only form ICICI.

Individual payment              :When we run APP, it will issue one check only for all the bills due –some parties ask us to issue separate check for each bill. Select individual payment check box.

Separate check  will be issued for each bill.

Select save button or Ctrl+S

HOUSE BANK

HOUSE BANK

Bank branch name

Bank Address

Contact person

Telephone no.

Senario1

1. House bank          à        SBI Main branch

No.of account                                   Current A/c          Current A/c                      Current C/A

ID’s (Identification)              No.1                            No.2                            No.3

Scenario 2

2  House banks                                SBI Main branch                  BI Begumpet Branch

                                                                        |                                               |

            Account ID                            Current A/c No.                    Current A/c No.

Steps:

1)    Creation of GL Master à SBI current account à Under Current assets , Loans & Advances

2)    Define House bank

3)    Creation of check lots à check from no., check to no.

* In SAP check mean cheque

1. Creation of GL Master (FS00)

Give the GL account no.200105

Company code         :AML

Select with template button

Give the GL account no.     :           200100           Cash A/c

Company                              :           AML

Enter

Change short text and GL account long text      à SBI current A/c

save

2. Define house banks

Path : SPRO-Financial accounting –Bank accounting-Bank accounts –Define house banks (FI12)

            Give the company code                  : AML

Enter

Select new entries button

House bank                                      :SBI

Bank country                                                :IN

Bank key                                           :AML1 (text field)

Save

Bank name                                       :State Bank of India

Street                                                  :Bank Street

City                                                     :Hyderabad

Bank branch                                                 :Main branch

Enter

Press enter to save in your request

Double click on bank account folder

Select new entries button

Account ID                                        :SBI1

Description                                        :SBI current A/c no.1

Bank account no.                            :AML1234

Currency                                           :INR

G/L Account no.                               :200105 SBI current a/c

Select save button

3. Creation of check lots:

Path :Accounting –Financial accounting-Accounts Payable –Periodic Processing -payments (F110)

From the menu select à Environmentàcheck  Information à Number ranges (FCHI)

Paying  company code       :AML

House bank                          :SBI

Account ID                            :SBI1

Select change button (Shift +F5)

Select create button

Lot no.                                                : 1

Check no                               :500001

To no.                                     :500100

Select –Non sequential check box

Short information                 :SBI

Purchase date                      :Today’s  date i.e Check box issue date

Enter and save

Manual payment                                Automatic payment

1. We can issue any check any time          System will issue check one after another 

2. Sequential or Non-sequential      Sequential

Purchase invoice posting 

Path : Accounting-Financial accounting-Account payable –Document entry- Invoice general (Transaction code F-43)

           

Give the document date                 :Todays date

            Type                                                   :KR(Vendor)

            Company code                                 :AML

            Posting key                                       :31 (Vendor credit)

            Account                                             :4200001 (Vendor no.)

Enter

Give the amount                              :500000

Business area                                  :AMLH

Text                                                     :Purchase invoice posting

Posting key                                       :40

Account no.                                      :200120 (Inventory raw material)

Enter

Amount                                              :*

Business area                                  :AMLH

Text                                                     :+

From the menu select document à Simulate and save

2.                            How to view vendor account transactions

Path: Accounting –Financial accounting-Account payable-Account –Display change line items (Transaction code is FBL1N)

            Give the vendor account    :4200001

            Company code                     :AML

            Select open items radio button

            Select normal items check box

            Select execute button

3.    To view general ledger sundry creditor raw material –Transaction code is  FS10N

            Give the GL account no.     :100501 Sundry creditor raw material

            Company code                     : AML

            Fiscal year                             :2008

Business area                      :AMLH

Select execute button

Double click on cumulate balance amount

To view vendor wise

Select change layout button

Select assignment field from the hidden fields column

Select amount in local currency (under column content)

Select left arrow

Select copy button

100501 Sundry creditors RM

Sort key          :012 Vendor number

Sort key updates assignment field automatically

Outgoing payment with clearing

Path :Accounting – Financial accounting-Accounts payable -Document entry–Outgoing payment –Post (F-53)  

            Give the document date                 : Todays date

Type                                                   :KZ

Company code                                 :AML

Clearing text                                     :Outgoing payment

Account under bank date               :200105 (SBI current account)

Amount                                              :5000

Business area                                  :AMLH

Text                                                     :Outgoing payment

Account under open item select   :4200001

Account type                                     :K comes by default (K stands for Vendors)

Select process open items button

Double click on payable amount              :5000

Document àSimulate

Select save button or Ctrl+S

            Go and see the vendor account truncation (Tr.code is FBL1N)

            Give the vendor account no.         :4200001

            Company code                     :AML

Select cleared item radio button

Select normal items check box

Execute

Creation of manual check

Path :Accounting –Financial accounting –Accounts payable –Environment –Check information –Create –Manual checks  (Tr code FCH5)

House bank                          :SBI

Account ID                            :SBI1

Give the check no.               :500025

Save

Display check resister

Upto check information the path is same     Display –Check register (Tr code is FCHN)

Give the paying company code    :AML

Execute

Double click on check no.              :500025

Select accompany documents button

Path A/c

Bill no.  Amount       Payment        Payment doc.no.      Check

1          5000               5000               200005                       500001

2          5000              

3          15000            

4          5000               5000               200001                       500025 payment history

5          5000               5000               200010                       500005

Assignment of check no.to payment no.payment doc no.is cleared will be number

Check encashment date updating:  

Based on bank statement we update check encashment date.

Advantage 1

1. We know on which date the check is encased by the party
2. Bank reconciliation is easier
3. upto check information the path is same change –Additional info/Cash

(Tr code is FCH6)

paying company code                          :AML

House bank                                            :SBI

Account ID                                              :SBI1

Check no.                                                :500025

Enter

Give the check encashment                :20.11.2008

Save

Go and see check register FCHN

give the paying company code                       :AML

Execute

Sort date wise –FI the encashment date is bank or offer 30.11.2008

Checks issued but not presented.

Unissued checks cancellation 

Some time while writing check we commit mistake before issuing to party – we cancel check

Up to  check information the path is same void –unused checks (Tr code is FCH3)

Give the paying company code          :AML

House bank                                            :SBI

Account id                                               :SBI1

Check no.from                                       :500001

Void reason code                                   :Select 06 destroyed select void button (Shift+F5)

Go and see the check register (FCHN)

Give the paying company code          :AML

Select execute button

Once the check lot is over all check  keep the cursor and cheque no.from to select sort in ascending order button (Ctrl +F5)

If any number is missing between the check is misused.

How to create void reason code

Path :SPRO-Financial accounting –Accounts receivable and accounts payable-Business truncations-Outgoing payments –Automatic outgoing payments-Payment media –check management –Define void reason codes

 (Tr code is FCHV)

Select new entries button

Reason                                                                :15

Void reason code                                               :Stop payment for AML

Select save button or Ctrl+S

Press enter to save in your request

How to delete encashment  date data:

500019     we have to give encashment date 20.11.2008 for 500019.by mistake we have given for 500020

500025     20.11.2008 to delete encashment date

500021

500022

Path :up to check information the path is same – Delete –Reset data (Tr.code is FCHG)

Give the paying company code          :AML

House bank                                            :SBI

Account id                                               :SBI1

Check number                                       :500025

Select reset cashing data radio button

Execute

Select yes button for the message to reset data

Go and see the check register (FCHN)

Give the paying company code                      :AML

Execute

Issued check cancellation

System will not permit to cancel encashed checks.

                                                                        Vendor account

a) Invoice posting (F-43)                             a) 01 (open items)

b) Outgoing payment with clearing (F-53)          b) Bank 5000 Dr  a)5000 Cr

c) Manual check creation (FCH5)             CI (Clearing items)

                                                                        A)        5000 Cr

                                                                        B)        5000 Dr

d)Display check register (FCHN)

e) Issued check cancellation

1) Reset cleared items –Delinking bill amount and payment amount

                                                Vendor Account

                                                            01

                                    B) Bank          5000 Dr          A)        5000 Cr

2) Reverse payment

                                                Vendor account

                                                            01

A)           5000 Cr

Cancel check

Path :upto check information the path is same –Void-Cancel payment (Tr.Code is FCH8)

Paying company code              :AML

House bank                                :SBI

Account ID                                  :SBI1

Check number                           :select 500025

Void reason code                       :15 (stop payment for AML)

Reversal reason                         :select 01(reversal in current period)

Select cancel payment button

Go and seethe vendor account FBL1N

Give the vendor account no.   :4200001

Company code                           :AML

Select open items radio button

Select normal items check box

Select execute button

Go and see the check register FCHN

Give the paying company code          :AML

Select execute button

Advance payments to vendors (down payments to vendors)

      Sundry creditors Purchase      Advance        Advance to vendors

     (current liabilities)                                                           (current assets)

                                    Payment        purchase

1. Creation of GL master –Advance to vendors –Current assets, Loans & Advances
2. Link between sundry creditors ands advances to vendors

A (Advance special GL indicator)

^

                                Sundry creditors           Advance to vendors

                        Reconciliation account       Alternative reconciliation account or special

GL Account

                                                100501           200150

                                    Vendor A/c                4200001 – BirlaChemals Limited -100501

At the time of making payment –we know the purpose of payment.

If it is payment against a bill -4200001

100501-Sundry creditors

If it is payment as an advance 4200001 A

4200001 – Birla Chemicals Limited -100501

                                    A(Advance (Special GL indicator))

                                    ^

                        100501   200150

Advance payment posting

Purchase invoice posting

Transfer of advance from special GL to normal by clearing special GL items.

Clearing of normal items.

Vendor account have two parts

1)    Normal items

2)    Special GL items

Creation of GL master advance to vendors (FS00)

GL A/c No.                             :200150

Company code                     :AML

Select with template button

Give the GL account no.100501 (Sundry creditors raw material)

Company code                     :AML

Enter

Change account group to current assets loans & advances

Change short text and GL account long text to Advance to vendors

Other fields are common

Select save button or Ctrl+S

Link between sundry creditors and advance to vendors:

Path :SPRO-Financial accounting-Accounts receivables and accounts payables – Business transactions-Down payment made-Define alternative reconciliation account for down payments (Tr code is OBYR)

Double click on A or down payment on current assets

Give the chart of accounts                                     :AML

Enter

Reconciliation account                               :100501

Special GL account                                                 :200150

Select save button or Ctrl+S

Press enter to save in your request

Advance payment posting:

Path :Accounting –Financial accounting –Account payable –Document entry-down payment –Down payment (F-48)

Document date                    :Todays date

Type                                       :KZ

Company code                     :AML

Vendor account                   :4200001

Special GL indicator            :A

Bank account                       :200105 SBI current account

Business area                      :AMLH
Amount                                  :25000

Text                                         :Advance payment posting

Enter

Amount                                  :*

Business area                      :AMLH

Text                                         :+

From the menu select Document –Simulate and save

Go and see the vendor account transaction  (Tr.code is FBL1N)

Give the vendor account no.                     :4200001

Company code                                             :AML

Select open items radio button

Select special GL transaction check box

Execute

Purchase invoice posting (F-43)

Give the document date                 :Today’s date

Type                                                   :KR

Company code                                 :AML

Posting key                                       :31

Account no                                       :4200001

Enter

Amount                                              :25000

Business area                                  :AMLH

Text                                                     :purchase invoice posting

Posting key                                       :40

Account no.                                      :200120 inventory raw material

Enter

Amount                                              :*

Business area                                  :AMLH

Text                                                     :+

From the menu select document –simulate and save

Go and see the vendor account (Truncation code FBL1N)

Give the vendor account no.         :4200001

Company code                                 :AML

Select open item radio button

Select normal items check box

Execute

Select back arrow

Select special GL truncation check box along with normal items

Execute

Transfer of advance from special GL to normal by clearing special GL items

Path :Accounting –Financial accounting-Accounts payable-Document entry-Down payment –Clearing (F-54)

Give the document date                             :Today’s date

Document type                                             :KA

Company code                                             :AML

Vendor account                                           :4200001

Text                                                                 :Advance transfer to normal

Select process down payments button

Transfer posting                                           :25000

Save

Go and see the vendor account transactions FBL1N

Give the vendor account no.                     :4200001

Company code                                             :AML

Select clearing items radio button

Select special GL transaction check box

Execute

Select back arrow

Select open items radio button

Select normal items check box

Execute

Clearing of normal items:

Path : Accounting –Financial accounting –Accounts payable –Account –Clear        (F-44)

Give the account no.           :4200001

Company code                     :AML

Select process open items button

Double click on credit 25000

Double click on debit          25000

Save

Go and see the vendor accounts (Transaction code .FBL1N)

Give the vendor account no.         :4200001

Company code                                 :AML

Select cleared items radio button

Select normal items check box

Execute

Vendor account

|

                                                               Normal / Items

6          5          25000             425000                       Sundry creditors  C/L

                                                Special GL items

Advance to vendor 3          25000             5                      25000

2^nd Scenario

Advance more bill less

Advance                    200000

Bill amount                  50000

A)   Advance payment posting  (F-48)

B)   Purchase in voice posting (F-43)

C)   Transfer of advance of  Rs.500000 from special GL to normal (F-54)

Vendor A/c normal items

D               C                     50000             B         50000

Special GL items

A   200000                                               C         50000

D)   Clearing of normal items (F-44)

Final result

Vendor special GL shows a balance of Rs.1500000 – Advance to vendors

To be cleared against future bills.

3^rd Scenario

Advance bill more

Advance              9000

Bill amount         90000

                                                                                          Vendor A/c

normal items

A)   Advance payment posting (F-48)

B)   Purchase invoice posting (F-43)               C         9000   B         90000

C)   Transfer of advance from special GL to normal

by clearing                                                               

                                                                                                Special GL Items

            Special GL (F-54)                                         A         9000   C                     9000

    D) While making balance payment

            Of Rs.81000 double click on bill

            Amount 900000 and payment amount

            Rs.9000. All the 3 line items will go to

            Clearing items (F-53)