An installment plan enables you to divide original items into multiple installment items that have a due date in the future or in the past. Once an installment plan has been posted, the items of the installment plan (and not the original items) are referred to when a bank collection is made or when a dunning run is carried out.
An installment plan consists of a statistical document with multiple installment receivables. The individual installment receivable is cleared upon payment. The number of the installment plan is saved in the original items. If interest is payable on an installment plan, the installment plan will also have an interest supplement.
You can use the installment plan history to determine the original items on which the plan is based (choose Account → Further Information → Installment Plan History).
When you create an installment plan, you define the number of installments within the plan and the interest key. The interest key controls the grace period, interest frequency, interest interval unit, and the interest calculation rule. You can store frequently recurring installment terms and conditions in the system as default installment plans (installment plan types).
When you create an installment plan, you can specify the percentage amount of the total amount that is to be used as the first installment. The system calculates the remaining installments as required.
When you create an installment plan, you can also specify partial amounts.
If the agreement for payment in installments is canceled, you can deactivate the installment plan manually. The original receivable is then active again. The link between the original receivables and the installment plan is deleted.
Installments for installment plans are represented as repetition items.
A sample business partner item (repetition group) is created and repetition items are formed for the individual due dates.
Legend
OPBEL: FI-CA document number
OPUPK: FI-CA document Item number
WHGRP: FI-CA document repetition group
OPUPW: FI-CA document repetition item
BETRW: Amount in transaction currency with +/- sign
FAEDN: Net due date
You can create installment plans for one or more open items for a contract account, provided they have the same currency.
You can (when selecting open items) specify the priority with which original items of the plan are cleared when payments are received.
You can now use the Partner for Payment field to define an alternative payer to the business partner for installment plan items. There you can maintain an alternative payer for each installment.
You can now use the Card ID field to enter a payment card number. Previously, you could only define a bank details ID for installment plan items.
You can maintain an installment plan type in customizing, which can then be used to post an installment plan.
You can use the Installment Intervals field to define the intervals length between installments. The interval type defines the interval type between installments (for example, month).
You can use the Distribute indicator to define whether installment charges and interest are to be distributed to all installments. The interest and charges are distributed according to the installment amounts.
The individual installment amounts are rounded to a multiple of this amount.
The rounding amount can be entered with up to three decimal places. The system takes into account the currency in question and rounds the amount to the reduced number of decimal places.
The remaining amount can result when calculating the amount for the individual installments of an installment plan. Remaining amounts that result from the rounding process are added to the first or last installment or a separate installment. If you do not specify a value here, the remaining amount is automatically added to the last installment.
The installment amount is the amount of the individual installment payments. The installment amount can be entered as an alternative to the rounding amount and number of installments.
The charge can be calculated for granting an installment plan. The system automatically posts a charge document when creating the installment plan and adds the charge to the first installment.
Interest is calculated for the duration of the installment plan.
Interest can be recalculated and posted if customers fall behind with their payments again. For example, a customer phones and requests an installment plan with six installments from Jan 1 to June 1. However, on Aug 1, the customer still has an outstanding balance. It's possible to calculate and post interest on the unpaid balance that exists after June 1.
You use transaction FPR2 to add interest to the installation plan at a later date.
In addition to the installment plan interest calculation, you can trigger an interest calculation on original items up to the start date of the installment plan.