Creating Purchase Orders with Down Payments

Down payment is the initial paid amount before the actual handing over of goods. It is typically a percentage of the total purchase price and is often used with the procurement of expensive items or services.

Down payments can be recorded in purchase orders and during Invoice Verification. The down payment clearing function clears the down payments that have not been cleared in FI. The system posts a down payment clearing document along with an invoice document.

The following picture shows down payment process flow.

In SAP S/4HANA Cloud, you can create purchase orders manually with down payments using the Create Purchase Order - Advanced app. You can define the down payment parameters, such as DP Category, Down Payment Amount or Percentage, and Down Payment Date on the item level in the Invoice section of your purchase order.

Down payment data can be recorded both at the header level and item level of the purchase order. This data is copied to the financial accounting as default values, and can also be changed depending on the need.

If the payment is added at the header level, header data cannot be distributed to line item data. This is due to the fact that the down payment on the header level is not split onto the item level, it is retained at the header level as a payment on the whole PO. When you create the down payment request for the down payment maintained at the header level, the system doesn't propose the down payment amount. You have to enter the down payment amount manually on the line item or items accordingly. For details see the SAP Note 2894701 - Down payment amount in PO header not proposed when creating Down Payment Request - SAP for Me.

You can create down payment requests using the Manage Supplier Down Payment Requests app. You can also use the Monitor Purchase Order Down Payments app. You can see the status of purchase order items with down payments using the monitoring, select the item, and create the request, which opens the Manage Supplier Down Payment Requests using the values from the item such as down payment amount and due date, but these can be modified if necessary.

You can check the status of the purchase order item using the monitoring app. This will be changed to completely posted after posting the document.

After posting the down payment request, and making sure that the down payment has not been blocked in any payment run and payment proposal, you create the payment for the down payment request using the Post Outgoing Payments app by entering the values such as bank and account details.

Once the goods arrive, the warehouse clerk checks the goods and posts the goods receipt using the Post Goods Receipt for Purchasing Documents app.

Finally, the account payable accountant creates the supplier invoice for the incoming invoice using the Create Supplier Invoice - Advanced app. The down payment clearing is performed during the invoice verification process. When posting the invoice, down payment clearing document is posted as well.

You can learn more about the detail process by following the tutorials.