S/4HANA offers a lot of new functionalities. One of these is down payment processing in the SAP Best Practices process “Sales Contract Management” (Scope item ID I9I), which can be performend with the app “Manage Sales Contracts” (App ID F1851).
Where to use the down payment processing?
In everyday business, the supplier often agrees a quantity contract with the customer. This is a framework contract between the two parties that sets out the terms for the purchase or supply of products to be provided over an extended period of time. The contract usually contains details such as minimum purchase quantity, the delivery period and the unit price.
In some cases, for example when the supplier wants to minimise the risk of non-payment, the supplier may require a down payment from the customer with whom he signs in the quantity contract. This down payment must then be paid by the customer before delivery.
Improved process across departments through the new down payment processing
Since S/4HANA 2020, the SAP system supports the processing of down payments and so simplifies the collaboration between different departments such as the sales and finance departments. Down payment processing therefore provides a significant process improvement. Errors due to manual entries are prevented and processing times are significantly reduced due to automation.
Before this release, the SAP Best Practices process “Sales Contract Management” already existed, but until then it could not be used for down payment processing in combination with the quantity contract.
Process flow
In the following you’ll see the steps of this process:
To create the quantity contract with down payment processing, a sales contract is created with the app “Manage sales contracts”. To be able to use this app, the respective user needs the SAP standard business role “SAP_BR_INTERNAL_SALES_REP”.
When the quantity contract is created, the specified down payment amount is entered and then invoiced to the customer by using a down payment request.
The contract release orders for the quantity contract are automatically blocked for delivery until the customer has made the payment for the down payment request or the incoming payment has been posted in SAP.
As soon as the payment is completed, the system automatically removes the delivery blocks in the schedule lines of the contract release orders.
Delivery and customer invoicing can be carried out as subsequent steps in this scenario.
In the delivery-related invoicing of the respective contract release order, the down payment already received for the quantity contract is automatically taken into account and cleared.
The following screenshot shows the process flow diagram for the SAP Best Practice process “Sales Contract Management” (I9I):
Our Conclusion
In general, it can be said that this process offers two major advantages:
- The automatic setting of the delivery block in the call-off order when the down payment is maintained in the quantity contract and the removal of this block as soon as the customer payment of the down payment has been posted. This ensures that no deliveries or services are carried out before the payment has been received.
- Significant error reduction thanks to the automatic clearing of the down payment made when creating the invoices of the respective contract release orders.
Do you have further questions?
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