Account Receivable Down Payment Processing and Reconcilliation

8/13/2019 Account Receivable Down Payment Processing and Reconcilliation

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ACCOUNT RECEIVABLE DOWN PAYMENT

PROCESSING AND RECONCILLIATION

PREPARED FOR

Galaxy Backbone Limited

PREPARED BY

Axel Enterprise Systems

Date

01/11/2013


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ContentsPurpose ......................................................................................................................................................... 3

Business Conditions ...................................................................................................................................... 3

Process Overview Table ................................................................................................................................ 4

Process Steps ................................................................................................................................................ 5

Post AR Down Payment Invoice with Incoming Payment.........................................................................5

Procedure..............................................................................................................................................5

AR Down Payment Accounting Entries ................................................................................................. 8

Post AR Invoice..........................................................................................................................................9

Procedure..............................................................................................................................................9Invoice Posting Accounting Entries.....................................................................................................10

Incoming Payment .................................................................................................................................. 11

Procedure............................................................................................................................................11

Incoming Payment Accounting Entries ............................................................................................... 12


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PurposeThe purpose of this document is to give a detailed step-by-step guide for entering and post processing

down payments and subsequent AR invoices without sales orders in the SAP Business One system. It

shows the corresponding ledger entries at each step and clearly shows the reconciliation of down

payments with AR invoices in the customer accounts and other related ledgers.

Business ConditionsThe business process described in this document is part of bigger chain of integrated business processes

or scenarios. As a result, you must have completed any preliminary steps before you start any activities

in this scenario. For simplicity and clarity, taxes, discounts and approval steps have been omitted from

this scenario

Business Scenario

A sale has been made to a customer. The customer is required to make a down payment on the order.

The down payment is applied to the final invoice and the customer pays only the net due amount (fullinvoice amount less down payment) on the invoice due date. The scenario modeled in the document are

as follows

The customer places an order worth 10,000 naira. He makes a down payment of 4,000 naira.

The Down Payment invoice is generated and the incoming payment is posted in one step

Upon fulfillment of the order, an invoice is sent to the customer with a net due amount of 6,000

naira (10,000 naira less Total Down Payment of 4,000 naira)

The customer pays the balance due of 6,000. An incoming payment is posted and his account is

cleared

Accounts Overview

Account Number Description

102010100 Trade Debtors

202040000 Payments Received in Advance

401010000 Revenue- Internet connectivity

102030100 Petty Cash

CL10006 ASO (sample customer)

Notes.

Trade debtors account is the control account for the Customer Sub-ledger

These accounts are stated AS-IS in the system configuration and accounts determination as at

the day of document release

The customer account used has been chosen to represent a typical transaction. No settings have

been made in the customer data to override system default account determinations.


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Process Overview Table

Process Step Business Condition Expected Results

Enter AR Down Payment Invoice

with incoming payment

Customer pays the required

down payment, the employee

creates the down payment

invoice.

AR down payment invoice is

created

Post incoming Payment The customer pays the down

payment and the incoming

payment is posted in SAP

The incoming payment from the

down payment is posted.

Post AR Invoice The order is fulfilled and the

customer is sent an invoice with

the down payment applied

An AR invoice is generated with

due amount of Full invoice

amount less down payment

Post incoming invoice The customer pays the amount

due from the AR invoice

Incoming payment received and

customer account cleared


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Process Steps

Post AR Down Payment Invoice

In this activity, the AR down payment invoice is posted. The incoming payment is posted in the same

step.

Procedure

1. Access the transaction using he following navigation path

Main Menu Modules Sales A/R A/R Down Payment Invoice


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2. Enter Customer details, item details and price. Enter the Down payment percent as shown

3. Click to post the down payment invoice. The Accounting entries are shown below.

Trade Debtors Payment Received in Adv.

D C D C

1a 4,000 4,000 1a

Customer

D C

1a 4,000

1a Down Payment Invoice


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Post Incoming Payment

Procedure

1. Access the transaction using the following navigation path

Main Menu Banking Incoming Payment Incoming Payments2. Enter the customer details and select the down payment invoice


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3. Click on the payment means button to choose payment method and enter payment

amount

4. Click to confirm the amount

5. Click to post the incoming payment

AR Down Payment Accounting Entries


D C D C

1a 4,000 4000 1b 4,000 1a

Customer Cash

D C D C

1a 4,000 4,000 1b 1b 4,000


1b Incoming Payment(Down Payment)

*items in GREEN are cleared


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Post AR Invoice

In this activity, the invoice is posted in FULL and the down payment is applied to this amount to

generate the net due amount.

Procedure

1. Navigate to the A/R invoice transaction using the following navigation pathMain Menu Modules Sales- A/RA/R Invoice

2. Enter the Customer Details, Item Details and Price.

3. Select the browse button to select appropriate down payment related to the invoice. The

system automatically calculates the balance due (Full invoice amount less Total down payment)


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4. Click to post the invoice. The accounting entries for this transaction are shown below.

Invoice Posting Accounting Entries


D C D C

1a 4,000 4,000 1b 4,000 1a

2 6,000 2 4,000

Customer Cash

D C D C

1a 4,000 4,000 1b 1b 4,000

2 6,000

Revenue

D C

10,000 2



2 AR Invoice (Full amount with Down payment applied)



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Incoming Payment

In this activity, an incoming payment for the balance due is posted. This posting clears the customer

account and recognizes the inflow into the bank/cash account

Procedure

1. Navigate to the Incoming payments transaction using the following pathMain Menu Modules Banking Incoming Payments Incoming Payments

2. Enter the Customer code and select the appropriate invoice

3. Click on the payment means button , choose the means of payment and enter the payment

amount, click


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4. Click to post the transaction. The accounting entries are shown below. Note that this

posting clears the balance due amount in the customer account. The Accounting entries are

shown below

Incoming Payment Accounting Entries


D C D C

1a 4,000 4,000 1b 4,000 1a

2 6,000 6,000 3 2 4,000

Customer Cash

D C D C

1a 4,000 4,000 1b 1b 4,000

2 6,000 6,000 3 3 6,000

Revenue

D C

10,000 2



2 AR Invoice (Full amount with Down payment applied)

3 Incoming Payment (Total Invoice less Down Payment)


Account Receivable Down Payment Processing and Reconcilliation

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