SD prepayment sales order type configuration

[Former Member]

HI,

Just wanted to enquire if any SD consultants have implemented pre-payment order types, the requirement i received from the busines is such that when a pre-payment sales order is created in VA01, it should be automatically blocked for delivery pending a payment from the customer, a proforma invoice should be sent to the customer to effect the payment, once the incoming payment is matched, the delivery block is removed, customer receives goods, another invoice can be created for reference purposes

So the process should look like this

Sales order created with delivery block

proforma invoice sent to customer

payment received in accounts receivable and matched with proforma invoice

delivery block removed, goods issue

invoice for reference purposes

The business do not want the down payment option with a billing plan, they have to pay for the goods 100%

Thanks for your help

[VeselinaPeykova · Accepted solution]

I have worked with a very similar scenario before.

Just a coulpe of things to note during the process design and configuration:

Check with the business what should be the correct approach in case of overpayment (if it is possile in your client's business).

Overpayment in the pre-payment process can occur because the pre-payment amount is determined based on the originally ordered quntity, while the actually delivered quantity may be different. In this case - what should be done with the overpayed amount - could it be used for the next order (leave it in the customer balance) or send the money difference back to the customer?

Another really important question is how to handle the case when the pre-payment occurs in the current month, but the delivery and invoice will be in the next month - in some countries you have to perform some re-postings because of VAT. The key users from the the accounting department will probably be aware of the specifics in such legislation, but it is safer to ask a legal consultant if you have one.

Depending on the business process specifics you might consider automatic credit control as an alternative to delivery block with confirmation reset - both methods have their advantages and disadvantages.

If I understood you correctly, the customer will send the prepayment amount with reference (order number or proforma number). Ensure this same number gets transferred to the FI document from the invoice to make the clearing process easier.

[Former Member · Accepted solution]

Many Thanks Veselina for your prompt reply!

I am currently trying to design a solution and i am considering creating a new pre-payment copied  from SAP standard debit memo, there will of course be an order related invoice going out to the customer for payment, Like i explained earlier, when the invoice is cleared, delivery block removed, a standard delivery document has to be created, for example based on SAP standard 'LF' but in the case of the delivery related invoice, it will be a proforma as the original invoice has already been paid

Do you Think this solution will work? have you got any further tips how you configured this solution for your clients?

Thanks

[VeselinaPeykova · Accepted solution]

We did not create a dedicated order type for advance payment - in our case the process was relevant for certain customers and not a big number of documents per customer, so we used credit management functionality (zero credit limit to force blocking of quantity confirmation for standard orders). The main challenge, as I mentioned, was handling differences between prepaid amount and actually invoiced (we agreed to reuse the amount for subsequent orders). The other tricky part depends on country legislation - how to handle prepayment in first month and delivery+legal invoice in the next month. In some cases we used an additional order with service material and a special condition type to post vat and in the next month a credit memo to reverse that and then issue the final legal invoice. We still used special G/L indicator A for incoming payments to track also in FI reports. We had one additional development in DSD, but most probably this is not relevant for you .

[Former Member · Accepted solution]

Thanks for your input

[sridharan_rajagopalan · Accepted solution]

Hello Vaselina,

your response for this query is  very useful.  our client is Russian busines, would like to implement prepayment scheme.

order is placed in webshop and logistics happens in ECC ,whereas the invoicing is done in  CRM.

we are also brainstroming and designing solution  in case of overpayment scenario,as a business case may arise th customer prepaysX amount but may order later for Y amount.

Now one solution what we thought of was to clear th invoice of Y amount against prepayment of x ,and the balance in residue document. later the residual amount will be adjusted by dummy debit memo and reverse it by credit memo to post in the customer account or adding the same to the next incoimg prepayment.

Kindly share your experience and your valuable suggestions of any workable solution you might have succeeded.

Thanking you in advance.

[sridharan_rajagopalan · Accepted solution]

Hello Vaselina,

Can you please be kind to elaborate the solution you achieved. This might be helpful insight for our similar request from our Business.

Thanking you in advance.

[VeselinaPeykova · Accepted solution]

Well, we were using billing in ERP and the major part of the final billing documents were created during DSD FSR - so it is slightly different to your scenario.

I am confused why you need the dummy credit/debit memo. It has been quite some time since my last involvement with Russian specifics, but back then it was sufficient to repost manually the VAT on down payments received and not used in the current month as a bulk directly in FI (get report of balances at month-end, filter VAT-relevant transactions, calculate VAT and post correction). Then on the next day to post back.

You need to ensure that the residual items would not cause problems with credit management (overdue checks).

Things might have signiticantly changed since then, which could be the reason why you intend to use the credit/debit memo combination. Without knowing the legal implications, it would be irresponsible from my side to suggest a solution for your current assignment - you need to discuss the topic with the local legal consultant or with somebody in the company who is familiar with the current legal requirements for VAT ledger, additional reports, forms etc. in Russia.

[moazzam_ali]

Hi

From prepayment it sounds like advance cash order. We have a separate order type for this process. The difference in this process will be the delivery block for this order type is Pre payment required and a performa invoice attached to the sales document type of prepayment order.

We create sales order with this order type and send performa invoice to customer which is printout of sales order. Customer pays the invoice, we remove the delivery block and send the commercial invoice.

Not sure what is you scenario exactly.

Thank$

[Former Member]

Hi,

The business process here is similar to what you just explained, have you got a standard SAP order type that i can use as a refeence to create a pre-payment order or advance cash order as you will put it

Thanks

[moazzam_ali]

Hi

This is normal order type. You can copy standard document type OR and put a default delivery block to it. There is no other difference in it.

Thank$

[Former Member]

Thanks for the Information