Configure Terms of Payment in SAP S - 4HANA FICO - Work To Learn

Work to Learn My Repository of Longitudinal Work. Happy Learning!
CONFIGURE TERMS OF FOLLOW : 

PAYMENT IN SAP S/4HANA
FICO
SEARCH TOPICS
 Search … Search
This article will provide complete details to
Configure Terms of Payment.
SUBSCRIBE TO OUR BLOG!
Transaction Code ( TCode ): OBB8
Get notified about future blog updates.
IMG Path: SPRO > IMG Screen > Subscribe to our blog!
Financial Accounting > Accounts Subscribe Me
Receivable and Accounts Payable >
Business Transaction > Incoming
RECENT POSTS
Invoice/Credit Memos > Maintain
Terms of Payment  TCode FCH5 Error Message No FS565 | SAP
S4 HANA
Click “New Entries” button to define a new
 Check Management in SAP | Cheque
Payment Terms.
Payment
What is Payment Terms/  BAI file Format : Electronic Bank Statement
Terms of Payment in SAP?  What is NACH, ECS or NEFT in Banking

System
Payment terms, in SAP S/4HANA,
determines the conditions of invoice  Payment Reference(BSEG-KIDNO)
payment like Baseline Date and Discounts,

between Business Partners and
Organization. TRANSLATE
It calculated the invoice due date as per Select Language
the baseline date, and discount based on Powered by Translate

certain conditions maintained in Terms of
payment.
Payment Terms is assigned at Business
Partner Master Data level. And it’s CATEGORIES
automatically selected during invoice  Finance and Accounting

posting for that particular Business
 Plugins
Partner. However, Payment Terms can be
updated manually for an invoice(based on  SAP Bank Account Management
business requirement) during invoice
 SAP ERP
posting.
 SAP FI
For FI invoices (i.e. invoices posted via
TCode: FB60 or FB70) payment terms  SAP FSCM
is defaulted from for Business Partner

 SAP Tables
Master Data.
For Purchasing invoices payment term  SAP TCODES
is defaulted from “Purchasing View” in

 Web Master
Purchase Order / MIRO Invoices.
and , for Customer Invoices from SD  Website Hosting
side the payment is defaulted from

 WordPress
“Sales Data” view.
 Wordpress How To
To know where exactly do we maintain
the Payment Terms in Business Partner
Master data, please check the link Where
Payment Terms is assigned in Business
Partner Master Data?
Note: There is no change in Payment

Terms functionality in S/4HANA.
Payment Terms and
Sales Text:
1. Payment Terms is represented by a
4-character key, which is later assigned to
Business Partner Masters.
2. Sales Text is the short description of

the Payment Terms. This field should be
used if you are using the payment terms
for Customer Account, else you will get an
error message.
Day Limit:
3. Day Limit represents the date of a
month up to which the Payment Terms is
valid. SAP allows creation of multiple
Terms-of-Payment with same Payment
Term Key/Code, but with different Day
Limit.
Example 1: If following Payment Terms

are created in a system:
1. Payment Term : TST1, Day Limit:

20, Discount: 10%, Default for
Baseline Date: Posting Date.
2. Payment Term: TST1, Day Limit:
31, Discount: 5%, Default for
Baseline Date: Posting Date.
(Note: Both the Payment terms have
same Key but different Day Limit).
Then, Invoices posted with posting date

between 1st to 2oth of a month will have
a discount of 10%. And invoices posted
with Posting Date after 20th will have
discount of 5%.
Example 2: Scenario showing how “Day

Limit” is depends on value set at
“Default for Baseline Date“.
Lets say we have updated the “Default for

Baseline Date” to “Entry Date”. And the
Day Limit and Discount remains the same.
And then we post a document on 02-July,
with Posting date 22-July and Invoice
Date 22-July. In this case, the Posting
Term TST1 with Day limit 20 will be
selected and a discount of 10% will be
applied.
Own Explanation
4. Own Explanation This field is used to
give own explanation to the payment
terms. But be careful with this field, as
entering details in this field will overwrite
the automatic generated explanation by
system based on discount percentage and
days, in box 10 of the screen shot shown
above.
If this field is left blank, then system will

generate description in box 10 of the
screen shot shown above.
Account Type
5. Account Type: Define whether the
payment terms are valid for customers or
vendors, or both.
Vendor: Select this checkbox if this

payment is to be used only for
vendors.
Customer: Select this checkbox if this
payment is to be used only for
customers.
Vendor and Customer: Select both the
checkbox if the payment terms is to be
used for both customer and vendor.
Baseline Date Calculation

6. Baseline Data Calculation is used to
set the baseline date to some fixed date
of current month or some fixed date of
future month.
1. Fixed Day: Calendar Day which will

overwrite the day value of baseline
date. So, if this field is set to 2, then
the base line date will always be 2nd
day of the month irrespective of what
is set in Default For Baseline Date(Box
8).
2. Additional Months: This field
defines the no of month(s) to be
added to the baseline month.
Business Requirement
Part 1 of the requirement : Invoices dated
between 1st to 16th, should be due on the
5th of the 2nd month and have a 1%
discount. So an invoice dated ‘12-May’
would be due ‘5-July
For such a requirement we have to set the
payment term as below:
Part 2 of the requirement: Invoices dated

between 17th to 31st should be due on
the 5th of the 3rd month and have a 1%
discount. So an invoice dated ‘18-May’
should be due on ‘5-Aug’.
For such a requirement we have to set the
payment term as below:
Pmnt block/pmnt
method defaults
1. Block Key: Value set in this field will
blocked the invoice automatically. The
block key will flow from Payment
Terms to the Invoice.
2. Payment Method: Value set in this
field will automatically populate the
invoice.
Default For Baseline

Date
8. Default for the baseline date: The
baseline date is the date from which the
due date for the payment is calculated
based on the criteria defined in the
baseline date calculation box(box 6). The
baseline date can be set to:
No Default: Which means you have to

enter the base date manually during
invoice entry.
Posting Date: Which means the
baseline date will be defined from
Posting Date.
Document Date: Which means the
baseline date will be defined from
Document Date/ Invoice Date.
Entry Date: Which means the baseline
date will be defined from the entry
date.
Value set here has a direct impact on “Day
Limit” value.
Value set in box 6(Baseline Date
Calculation), overwrite the baseline
calculation process from this value. Which
means between “Default For Baseline
Date” and “Baseline Date Calculation”, the
higher priority id given to ” Baseline Date
Calculation ” for deciding the baseline
date.
Payment Terms
1. Installment Payments
2. Rec. Entries: Supplement fm Master
Terms/Percentage/No-of-Dats —–
Fixed Dat/Additional Months
Here we define the discounts which will be
given if the payment is made within a
certain number of days from the baseline
date. Mostly businesses will offer a
discount if the payment is made fast.
In the payment term definition shown

below, a 3% discount is offered if the
payment is made with in 14 days from
the baseline date.
And a 2% discount is offered if the
payment is made within 20 days from
the baseline date, and
the full amount is due after 30 days
from the baseline date.
Explanations
1. Auto populate entries
2. Hide Entry in Input Help
If you have any query or need any help,

let me know by commenting, and I will try
to resolve it via comment.
If you have any suggestion regarding the

blog please let us know by your
comments.
Gift a year of Prime

- Rs.999
(222) (as of 28th May 2021 - More info)
Share this:
 Twitter  Facebook
Like this:
Like
Be the first to like this.

LEAVE A REPLY
Enter your comment here...

Work to Learn © 2021. All Rights Reserved.


Configure Terms of Payment in SAP S - 4HANA FICO - Work To Learn

Uploaded by

Copyright:

Available Formats

Configure Terms of Payment in SAP S - 4HANA FICO - Work To Learn

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Configure Terms of Payment in SAP S - 4HANA FICO - Work To Learn

Uploaded by

Copyright:

Available Formats

Work to Learn My Repository of Longitudinal Work. Happy Learning!

CONFIGURE TERMS OF FOLLOW : 

What is Payment Terms/  BAI file Format : Electronic Bank Statement

Terms of Payment in SAP?  What is NACH, ECS or NEFT in Banking

payment like Baseline Date and Discounts,

It calculated the invoice due date as per Select Language

the baseline date, and discount based on Powered by Translate

automatically selected during invoice  Finance and Accounting

is defaulted from for Business Partner

is defaulted from “Purchasing View” in

side the payment is defaulted from

Note: There is no change in Payment

2. Sales Text is the short description of

Example 1: If following Payment Terms

1. Payment Term : TST1, Day Limit:

Then, Invoices posted with posting date

Example 2: Scenario showing how “Day

Lets say we have updated the “Default for

If this field is left blank, then system will

Vendor: Select this checkbox if this

Baseline Date Calculation

1. Fixed Day: Calendar Day which will

Part 2 of the requirement: Invoices dated

Default For Baseline

No Default: Which means you have to

In the payment term definition shown

If you have any query or need any help,

If you have any suggestion regarding the

Gift a year of Prime

(222) (as of 28th May 2021 - More info)

Be the first to like this.

Enter your comment here...

You might also like