How to maintain Terms of Payment

Terms of payment or TOP configuration is same for account receivable and account payable module. Once you created it you can use for both customer and vendor master data.

Its created to define the discount amount and the time period of paying to your customer.

You can create it through transaction code OBB8 or by using following path;

SPRO > Financial Accounting > Accounts receivable and accounts payable > Business Transactions > Incoming Invoices/Credit Memos > Maintain terms of payment

A four digit id is defined to represent the TOP. SAP has delivered standards to use for reference. You can create your own by click on “New Entries” from the overview screen.

Same terms of payment created can be used for both customer and vendor. 

Steps

On the new entries screen you enter the following details to create the terms of payment;

  1. Enter a Four digit ID
  2. Give a own explanation to describe the type of entry you are creating
  3. Under the account type option you can either select customer or vendor or both.
  4. Under the “default for baseline date” tab you select the base date from which you calculate the TOP.
  5. Under the payment terms option you fill up the percentage field if any  discount is to be issued and next to that fill up the date within which payments need to be made to get the discount.

Now click on save button to save it in SAP. If you want the payments to be in installment then the configuration needs to be done individually and then assign all of them together through transaction OBB9.

For example suppose you are creating a terms of payment for installment where the installment of 30% will be paid in 45 days and balance of 70% within 75 days. Followings are the step to create it;

  1. Create the first TOP as discussed above with the tick on installment tab under “Payment terms” section.
  2. Create the second TOP key with 45 days payment and the third one with 75 days payment as number of days of payment terms.

In transaction code OBB9 you need to assign the second and third terms of payment to the first one. The percentage of amount you are about to receive in installment should be mentioned against the no of days of installment.

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