This article is in continuation of the matter discussed in the SCN document - Tolerance Limit - Customer or Vendor Payment Differences(http://scn.sap.com/docs/DOC-36324)
Objective of the Article:
This article is an attempt to analyze the relationship between Cash Discount Amount and the Tolerance Limits for Payment Difference.
Payment Difference Tolerance Limit - Cash Discount Amount Relationship:
The tolerance limit specified in the Tolerance Groups configured, control the Maximum Payment Differences for Revenue/Loss which will be automatically written off.
While writing off the differences the system will:
- First check whether the customer/vendor is entitled to any cash discount
If yes, then the system will check whether the payment difference is lesser than the cash discount amount and is within the permitted payment difference, specified in the tolerance group.
If yes, then the system will adjust the payment difference by decreasing the cash discount amount and there will be no posting to the Payment Difference Account.
If the payment difference is greater than the cash discount amount and is within the permitted payment difference, then the system will write off the difference to the Payment Difference account.
The below mentioned illustration clarifies this concept further:
Specify Maximum Amount up to which Cash Discount should be adjusted:
The maximum amount up to which the cash discounts can be adjusted can be specified in the:
- Customer/Vendor tolerance group as well as
- User Tolerance Group
As discussed in the SCN document - Tolerance Limit - Customer or Vendor Payment Differences(http://scn.sap.com/docs/DOC-36324), the maximum permitted payment difference would be the lower of:
- the permitted amounts specified in the tolerance group assigned to the customer/vendor and
- the permitted amount specified in the tolerance group assigned to the user
| Description | Transaction Code |
|---|---|
| Customer/Vendor Tolerances | OBA3 |
As per the screen shot below the maximum amount up to which the payment difference will be adjusted against the cash discount as per the Customer/Vendor Tolerance Group is 2 EUR.
| Description | Transaction Code |
|---|---|
| User Tolerances | OBA4 |
As per the screen shot below the maximum amount up to which the payment difference will be adjusted against the cash discount as per the User
Tolerance Group is 10 EUR.
Computation of amount up to which Cash Discounts will be adjusted in case of Payment Differences:
Hence in the above case, the maximum permitted amount up to which the payment difference will be adjusted against the Cash Discount Amount is the least of the following:
- the permitted amounts specified in the tolerance group assigned to the customer/vendor i.e. 2 EUR and
- the permitted amount specified in the tolerance group assigned to the user i.e. 10 EUR.
Hence when a incoming payment is posted against any customer who is assigned the Customer/Vendor Tolerance Group - Blank, by a User who is assigned the User Tolerance Group - Blank is 2 EUR.
Implications of Payment Differences exceeding/within the Cash Discount Adjustment Amount:
If the Payment Difference is:
- less than equal to 2 EUR, then the payment difference will be adjusted against the Cash Discount Adjustment amount
- greater than 2 EUR, then the payment difference will be posted to the Payment Difference Account
Post Customer Invoice:
| Description | Transaction Code |
|---|---|
| Post Customer Invoice | FB70 |
Two identical Customer Invoices - 1800000014 and 1800000015 are posted for identical sum of EUR 1000 against the same customer who is entitled to 2% Cash Discount.
Customer Invoice 1 - 1800000014
Customer Invoice 2 - 1800000015
Customer is entitled to 2% Cash Discount if the payment is received within 14 days.
Hence if the payment is received within 14 days, then the customer is entitled to a cash discount of 20 EUR.
Incoming Payment - 1
| Description | Transaction Code |
|---|---|
| Post Incoming Payment | F-28 |
With Payment Difference of 4 EUR (exceeding the maximum permitted amount up to which cash discount amount can be adjusted):
When and incoming payment is received against the Customer Invoice 1 (1800000014):
- within 14 days of the baseline date and
- with a payment difference which is more than the maximum permitted amount upto which the Cash Discount Amount can be adjusted,
then the payment difference will be posted to the Payment Difference Account configured.(Please refer Step 4A of the SCN document - http://scn.sap.com/docs/DOC-36324)
The payment difference amount of 4 EUR is posted to the Payment Difference Account as shown in the screen shot below:
Incoming Payment - 2
| Description | Transaction Code |
|---|---|
| Post Incoming Payment | F-28 |
With Payment Difference of 2 EUR (within the maximum permitted amout upto which cash discount amount can be adjusted):
When and incoming payment is received against the Customer Invoice 2 (1800000015):
- within 14 days of the baseline date and
- with a payment difference which within the maximum permitted amount upto which the Cash Discount Amount can be adjusted,
then the payment difference will adjusted against the cash discount amount.
The payment difference amount of 2 EUR is adjusted against the Cash Discount Adjustment Account as shown in the screen shot below:
In this case the payment Difference of 2 EUR is adjusted against the Cash Discount Amount of 24 EUR by reducing it to 22 EUR.
No posting is done to the Payment Difference Account.
Conclusion:
While writing off the payment differences the system will check whether the payment difference is lesser than the cash discount amount and is within the permitted payment difference, specified in the tolerance group and:
- if the answer is YES, then it will adjust the payment difference by increasing/decreasing the cash discount amount and there will be no posting to the Payment Difference Account.
- if the answer is NO, then the payment difference will be posted to the Payment Difference Account.