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Adjustment of advance in automatic payment processing

Hi Experts,

Please suggest how do I handle following business scenario.

A buyer raises an advance request in a purchase order which is picked in Automatic Payment Processing. However, when an invoice is received the same purchase order, the advance is not adjusted.

For example,

There is purchase order of USD 1000 out of which 50% advance payment is to be done. Advance request is raised through ME2DP. On running APP, USD 500 payment line item is created for the vendor.

Now, let us say we receive the material and vendor raises invoice of USD 250. When APP is run, it generates no payment line item stating that there is a positive balance at the vendor.

Q1: Can we split the invoice according to advance percentage? 50% in this case. So, we pay vendor 125 USD and adjust remaining 125 USD against the advance that we have paid?

In a different business scenario, let us assume that vendor raises two invoices of USD 300 and USD 700. In this case, APP does not adjust the amount against the advance that has been paid. APP will suggest making a complete payment of USD 1000 to the vendor (apart from USD 500 already paid to the vendor). So, in this way we are making a payment of USD 1500 on a PO of USD 1000.

Q2: How can this business scenario be handled?

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1 Answer

  • Apr 16, 2018 at 09:57 AM


    In your previous case, where the advance was for $ 500 and you have invoiced for $ 250, you still have to recieve an invoice of $ 250 to adjust the advance payment. Why would you want to make a payment of $ 250 and it would be an additional payment? So system is correct in not allowing you to make the payment. In the second case, you have recieved the invoices of $ 300 and $ 700 and you have made an advance payment of $ 500 already. So net due to the vendor is $ 500, which should have been paid. To achieve that, please perform a down payment clearing transaction, when you have posted the invoices of $ 300 and $ 500. You can do that using transaction F-54. There after try making the payment and you will find that system is paying an amount of $ 500, which is correctly due to the vendor.

    On a side note, in the first scenario, if you want to make the payment additionally to the vendor even though you have a debit balance on vendor account, it should be handled as an on account payment. Create a payment request for the vendor and create payment run with reference to the payment request, though from a process point it does not make sense to pay to a vendor it there is a debit balance for the vendor.


    Sanil Bhandari

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    • Hi

      I did mention, in my reply, that you have to raise payment request in case you want to make payments to vendor, even if there is a debit balance on vendor account. The payment request will be paid off in F110 and it will create a debit posting on vendor account for payment document. Now you can use F-44 to adjust the invoice against the on account payment posting to vendor account and achieve, what you want to meet business requirements. However, it would mean additional transactions being added to your end users for posting payment request and than adjusting invoices against the on account payments.

      Please let me know if you have further questions.


      Sanil Bhandari