Exploring the Integration of SD and FI for Down Payment Processing

In SAP S/4HANA Cloud, integrating Sales and Distribution (SD) and Finance (FI) through Special G/L transactions can streamline processes and enhance operational efficiency.

Here's how they integrate in Special G/L Transactions:

1. Creation of Sales Order: When a Sales Order is created through the SD component, an associated G/L account is auto generated in the Fi module. This represents a liability for the company, signifying that goods or services have been ordered.
2. Down Payment Request: To guarantee delivery, a down payment request is created in the FI module. It automatically appears in the SD module, allowing the accounting department to track such transactions.
3. Posting of Down Payment: When the down payment is made by the customer, this is recorded in the FI module. The SD module is updated real-time to reflect the partial payment received, reducing the liability.
4. Fulfillment and Invoicing: Once the goods or services are delivered, an invoice is created in the SD module, which posts an update to the FI module to reduce the down payment and update the revenue account.
5. Clearing of Down Payment: Finally, when the remaining payment is received from the customer and the invoice is cleared, the down payment in the FI module is fully cleared.

By integrating SD and FI via special G/L transactions, businesses can ensure transparency and accuracy, reduce redundancy, and ensure that all transactions are appropriately tracked and managed in the general ledger. This fosters an environment where transactions are accurately reflected, are in compliance with accounting standards, and support both managerial and statutory reporting.

You usually arrange down payments with the customer when dealing with plant engineering and construction or capital goods. Down payments are already created in the sales order. At the corresponding due date, you send a down payment request (billing document in Sales and Distribution) to the customer.

The down payment request in Sales and Distribution is automatically posted in Financial Accounting as a down payment request (posted as a noted item). The item has a special general ledger (G/L) indicator F, which ensures that posting is statistical. Posting is made to a different reconciliation account, which allows you to differentiate down payment requests from other receivables.

When posting an incoming payment for a down payment, the down payment is assigned to the down payment request. The amount paid as the down payment is also assigned to the sales order account. The item has special G/L indicator A.

When processing partial or final invoices, the down payments made are transferred as down payments to be cleared. Within FI, the down payments are deducted from the special reconciliation account and entered in the standard reconciliation account. The down payments for clearing then appear as open items for the customer and reduce the receivables total.

Down payment processing is carried out with the billing plan function.

You can store one or more down payment agreements as a date in a billing plan.

You can enter the value of the agreed down payment either as a fixed amount or as a percentage of the value of the item.

Control is carried out via Date Categories and billing rules, for example:

• Billing rule 4 - Down payment for percentage milestone billing.
• Billing rule 5 - Down payment for value-related milestone billing.

As soon as the billing date (in the billing plan) for the down payment has been reached, the system creates a down payment invoice and sends it to the customer. You use billing type FAZ to create the down payment.

You can create this down payment request as follows:

• Automatically via billing due list processing in a collective run.
• Explicitly by specifying the order number via the application Create Billing Document.

Tax is determined and displayed automatically when the down payment request is created. The down payment request in Financial Accounting is created automatically from the down payment request in Sales and Distribution. You can view the down payment requests created in Sales and Distribution and Financial Accounting via the document flow in the sales order.

When a down payment request is settled, the special G/L indicator A displays the incoming payment in Financial Accounting as a down payment by posting. You can select an incoming payment from the open requests and choose the Create down payments button to assign it to a process.

In the open items of accounts receivable accounting, you can view the down payments using the special G/L indicator A.

The down payment request is correspondingly set to Cleared in the document flow of the sales order.

This is the process diagram for scope item BKJ, Sales Order Processing with Customer Down Payment.

The following are the main steps and apps used in the process:

• The Create Sales Order step confirms the intention of the customer to order goods and initiates the process.
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• The Change Sales Order step removes the billing block for the down payment.
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• The Create Down Payment Request step debits the customer account for the down payment.
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• The Post a Down Payment step records the customer payment of the down payment amount.
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• The Create Delivery step initiates the shipping of the goods.
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• The Execute Picking step executes the picking of the goods from the warehouse and its preparation for shipment.
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• The Post Good Issue step confirms the shipment of the goods.
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• The Change Sales Order step removes the billing block for the final invoice.
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• The Create Billing Document step sends the final invoice to the customer.
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