How to Create Payment Terms (Terms of Payment) in SAP Hana

Last Updated on September 3, 2024 by admin

In this SAP tutorials, you will learn

• What are payment terms in SAP
• How to create new terms of Payment
• What are the default values are maintained at payment terms?

What are Payment Terms in SAP

In SAP, Payment terms are also called as Terms of Payment. Payment terms are the conditions that are agreed with the business partners (Customers and Suppliers) for the invoice payments.

In SAP, Terms of Payment can have the following specifications –

• Invoice Due date
• Cash discount offered within a certain period of time
• Baseline date as per document date or posting date or entry date.

Scenario: The received or given cash discounts are posted automatically in the SAP Hana system, for this you need to define account determination for automatic postings of cash discounts.

How to Define Terms of Payment in SAP Hana

Payment Term: AD10	Condition
	5% Cash Discount with 7 Days
	2% Cash Discount within 14 Days
	No Discount After 14 Days, Full Amount to Paid
	Baseline Date – Posting date

Standard SAP Hana system delivers with several terms of payment, each payment terms can have a different day limits. You can can create new Payment terms as per the requirements of client.

Refer below step by step procedure on how to create a new terms of payment for customer and vendor invoice payments.

Step 1: Execute the transaction code “OBB8″ or follow the IMG path.

Step 2: On change view “Terms of Payment” overview screen, click on new entries

Step 3: On new new of Payment Terms creation screen, update the following details

• Payment terms: Enter a new key that defines as payment terms in SAP S4 Hana system
• Own Explanation: Provide the descriptive text for the payment terms. You can provide your own explanation as per requirements
• Account Type: Select the account type as customer or vendor. If you want to use this payment term for both customers and suppliers, choose the both options.
  •  Customer:If this payment term is applicable for only Accounts receivable documents, select customers
  • If the payment term is applicable for Payable document select only Vendor.
• Default for Baseline date: It refers to the date from which date the credit/ debit line to be calculated. You can choose one of the option as per the requirement
  •  No Default: You need to enter the baseline date manually during the document entry
  • Posting Data: The system automatically pick up the posting date.
  • Document Data: The system automatically pick up the date based on the document date
  • Entry Date: Entry date is updated for the baseline date
• Payment Block/ Payment Method Default:
  • Block Key
  • Payment Method
• Payment Terms: This is the important configuration where you maintain the cash discount percentage allowed within no of days and due date.

Scenario: You can use this Payment Terms for both customers and supplies as per requirements. Payment terms are maintained at client level, so all the company codes can use the payment terms.

Project Work – Work Space

Now try to create the following terms of payment for

AD10	5% Cash Discount with 14 Days, 30 Days Due Date – For Customer Only
AD20	10% Cash Discount within 7 days, 5% Cash Discount within 10 days, 45 Days Due Date – For Vendors Only

Note: When you are posting any Customer or Customer Invoice, make sure you have assigned the payment terms key to the invoice. So the system enables to determine the actual payment due of the invoice.