SAP Ebooks

Account Receivable Incoming Payment Process in SAP

Account Receivable Incoming Payment Process in SAP

This Process Definition document describes the process of Incoming Payment (Other than down payment) received from the Customer against an Invoice.

These Payments are received from the Customer for

•    Product Sale
•    Project sale
•    Service Contract
•    Export Sale

An organization Can receive incoming payment on following account

Incoming Payment Received from Customers (Product / Project / Service )
Incoming Payment from One Time Customers
Incoming Payment Received from Employees against sale of Products.
Incoming Payment received from Export Customers

Creation of Payment Advice (FBE1)

Payment advice will be prepared by Commercial Department .This will facilitate Cheque information to  flow in Accounts . Finance will select the payment Advice & post the payment by using the T-Code

F-28 once the Cheque is received with payment advice number.

Commercial will Input the following details in Payment Advice:

•    Company Code
•    Account Type – D( Customer)
•    Account – Customer Code
•    Payment Amount – Cheque Amount
•    Deductions  with reason for deduction
•    Assignment (Cheque Number),
•    Invoice Number

Save the Payment Advice document. A payment advice number will be generated.

Posting of Customer Receipt will be done in Finance by using T-Code F-28. Procedure of Processing the payment is same as mentioned below except enter or select the payment advice number in the “payment advice number” field.

Post Incoming Payment Procedure – (F-28)

Case I : Incoming payment with reference to payment advice

All Cheque which are received by Commercial are to be handed over to Accounts based on the prerequisites defined above. Accounts will simulate & post the  Payment using the Incoming Payment transaction F-28

Following inputs to be entered by accounts

•    Payment Advice number
•    Document Date (date of the instrument)
•    Posting Date
•    Document Type (DZ for Customer Payment),
•    Assignment –Cheque Number
•    GL Account code for bank Incoming Clearing A/c,
•    Amount
•    Value Date (Expected date of credit in bank account)
•    Profit Centre
•    Text (Narration )

In case of Cheque received against payment advice, no open items other than Invoice number enter in the payment advice will be displayed.  Simulate & Post the payment document.
Accounting Entry will be passed:

Cheque Deposited but not Cleared         Dr.
Freight/Water/Electricity Expenses        Dr.
To Customer Account                Cr.

Payment advice number will be deleted from the system ,once the incoming document is posted.

Case II : Incoming payment without payment advice

In case Cheque is received by finance directly we have to enter all above parameter & Customer number then Select option “Process Open Items “.System will show all open items of that customer. Choose the billing document to be cleared. Choose relevant option from  “Standard” or  “Residual Payment”. Simulate & Post the document.
Accounting Entry will be passed:

Cheque Deposited but not Cleared         Dr.
Freight/Water/Electricity Expenses        Dr.
To Customer Account            Cr.

Incoming Payment Procedure from Customers (Fast Entry) F-26

This is another method of entering Cheque received from the Customer against an Invoice .System will default the Bank Header Data throughout the Incoming Payment Process. Select respective Invoice & Clear the Document. Simulate the Accounting Entries & Post the Document

Following inputs must be entered.

Bank header Data

Bank GL Account
Bank Profit Center
Currency
Cheque Value Date
Posting Period

Payment Details

Customer Code
Cheque Amount
Cheque Date
Cheque Number

Select option “Process Open Items“. Choose relevant option from Options “Standard”, “Residual Payment”. All open transactions of the customer including down payments are displayed. Select the Invoice & clear the outstanding. Simulate & Post the document.

Accounting entries:

Cheque Deposited but not Cleared             Dr.
Water/Electricity/Freight expenses Account        Dr.
To Customer Account                    Cr.

Incoming Payment Procedure –Employee Customer

Initially the employee will be created as customer and vendor as well. When a product is sold to the employee, the customer employee balance will be updated by the commercial with installment payment terms.   When the salary is due at the end of the month, then installment which was also became due will be deducted  from the salary & posted in Employee Vendor account.

Accounting Entries created at the time of billing (VF01)

Receivable –Employee            Dr.
To Sales Revenue Account        Cr.

Accounting Entries at the time of Salary Process – Month end (Installment)

Payroll Clearing Account                Dr.
To Employee -Vendor Account            Cr.

Accounting entries at the time of Knocking monthly installment

Employee Vendor Account                Dr.
To Employee Customer Account            Cr.
To Outgoing Clearing (Bank)  Account        Cr.

Incoming Payment – Export Customers (F-28)

Incoming Payments against Export Customers is received directly at accounts.Then account will post the Incoming payments as per the procedure mentioned above.

Bank Account        Dr.
To Customer Account     Cr.

Foreign Exchange Rate Fluctuation (In case of Export)

Exchange rate fluctuation is booked for all incoming payments received from  the Foreign Customer. Unrealized gain/loss will be calculated based on the exchange rate maintained as on last day of the month. In case of Realized gain/loss, exchange rate fluctuation will be calculated based on the date   payment is received.

If there is a Gain in Foreign exchange rate  (Unrealized)

Adjustment for Exchange Fluctuation A/C        Dr.
To Exchange Gain –Export Unrealized            Cr.

If there is a loss in Foreign Exchange rate (Unrealized)

Exchange Loss –Export Unrealized            Dr.
To Adjustment for Exchange Fluctuation A/C         Cr.

These entries will get reversed on next day of the month.

If there is a Gain  in Foreign Exchange rate (Realized)

Adjustment for Exchange Fluctuation A/C        Dr.
To Exchange Gain –Export Realized         Cr.

If there is a loss in Foreign Exchange rate (Realized)

Exchange Loss – Export Realized             Dr.
To Adjustment for Exchange Fluctuation A/C        Cr.

SAP T Codes to be used

Post Incoming Payments    :    F-28
Reset Cleared Items    :    FBRA
Customer Line item display    :    FBL5N
Incoming Payments-Fast Entry        F-26
Customer Balance    :    FD10N
Create Payment Advice    :    FBE1

This Post Has 2 Comments

  1. Manjunath

    Thanks for the details on AR flow, very informative.

    But I have few clarifications,
    1. I just collect the cheque and I want to keep track of these
    cheque in system.( list of cheque deposisted or recieved )
    2. Suppose I deposit the cheque and i do F-28 reducing my
    customer balance but it gets realised after 1 week here I need
    to bring back my customer balance.
    3. If Credit check is active in my system and after doing F-28 my
    customer balance has come down and the system is allowing me
    to do sale order but actually cheque has been bounced where I
    should not raise any sale order or any invoices to him.

    Please throw some light on above points which will be helpfull for me.

    Thanks
    Manjunath
    manjuar@gmail.com
    9741724886

    1. deepak singh Chauhan

      You have to reconcile bank and customer entries

Leave a Reply

Your email address will not be published. Required fields are marked *