Down Payment Receivable control account?

[Former Member]

Hi All,

I was hoping someone could help clarify account determination for me.

Currently I have assigned a 'Down payments received clearing account' as a liability account. Is this correct?

Then If I click the accounts recevable "..." I am presented with the control account selection for "Open Debts" and "Down Payment receivables". I have selected this as "Trade Creditors Domestic".

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When taking DP invoice payments I can see that the DP payments received liability account is posted to correctly. When the DP Invoice payment gets applied to the AR invoice, the account is cleared as expected. I think this is correct.

I am however confused as to the control account determination. I dont see any postings made during this process. What should I see?

Many thanks.

John

Edited by: Jantzman on Jul 26, 2010 4:06 AM

Sorry... I clicked post before I as ready .. oops.

[zal_parchem2 · Accepted solution]

Hello John...

I am not sure what the Accounting Standards are where you are located, but generally a payment is not defined in the Liability Drawer, but in the Asset Drawer (because you are bringing in an asset of Cash - the so-called above posting). Of course, the company has to really define that...it is only a temporary holding account from "Down Payments Received" to permanent "Cash" account ...

I would suggest that you speak directly with the Finance folks of the company you are working with. Folks in the forum will give you the correct answer as they understand it, but in financial postings the "correct answer" can vary so widely. The only people who know how their individual books and related transactions work are the accounting/financial folks. And some times they even have some differing opinions. During the Blue Print Phase of Implementation I always sit in on the discussions to explain how SAP B1 works and we use the old school T accounts to walk through each scenario. But the accountants/financial personnel are the ones who have the final say, because they are the ones who will be living with it for years to come.

Regards,

Zal

[Former Member]

Thanks everyone,

I will check with Finance before I commit

My understanding was that is should go as a liability because even through we have collected a down payment from the customer we still owe them something in return (product). The sale is not registered until the transaction occurs, so we are holding money and have a liability to the customer until the transaction is complete.

Best regards,

John

[Former Member]

Hi,

Your understanding is perfectly correct.

Advances received from Customers are Liabilities till the time of delivery of goods. In case the sale doesnt go through then you are liable to return the advance.

Regards,

R

[Former Member]

Hi Jantman,

When you look at the J/E posting, the row with the Business Partner reflects the posting to the control account. Whatever control account is linked to the BP is the GL used.

Hope this is what you were looking for,

Heather

[former_member1269712]

Hi John,

Your assigned 'Down payments received clearing account' as a liability is correct.

As you mentioned about "accounts receivable" is also right I also tried same but actually from any transaction effects are not posting to that G/L's. And not mentioned sufficient in Help.

Thanks

Sachin