Last Updated on August 13, 2022 by admin

Maintain terms of payment

The following tutorial guides you on how to Maintain terms of payment in SAP. We are creating payment term key CP03 which is applicable for both customers and vendors. 

Terms of Payment are used for vendor and customer invoice payments with conditions of cash discount allowed within a period of payment, the due date for payment, baseline date, etc.

Payment terms: If the payment is made within 14 days – 5% discount, or within 20 days – 2% discount, net due 30 days.

  • SAP IMG Path: – SPRO >SAP Reference IMG (F5) > Financial accounting > Accounts receivable and accounts payable > Business transactions > Incoming invoices / Credit memos  >> Maintain terms of payment
  • Transaction code: – OBB8

Step 1: – Yo can get the payment term configuration screen by IMG path or by entering t-code OBB8

Click on “New entries” to create new payment terms

terms of payment new entries

Step 2: – In the new entries screen, enter the following fields

  1. Payment terms: Enter four digits payment term key.
  2. Sales text: Enter a short description of the payment term key and the text limit is 30 characters.
  3. Own explanation: This field is used to give a detailed explanation of the payment term key. It will be override the explanation that is automatically generated by the system. 
  4. Customer: Select this option if the payment term is to be used for Customer accounts (accounts receivable). 
  5. Vendor: Select this option if the payment term is to be used for Vendor accounts (accounts receivable).
  6. Block key: If Select the appropriate block key to block certain activities like payment block, payment clearing, etc.
  7. Select the appropriate baseline date calculation option from the list.
  8. Percentage: Enter the discount percentage rate.
  9. No of Days: Enter the no of days from the baseline date for which the discount percentage rate is valid.
  10. Fixed-rate: If you don’t want to use the baseline date, enter the days of the month that the discount ends.
  11. Explanation: – Detailed explanation automatically generated by the system

Maintain terms of payment SAPSelect the save button to save the configured data. Successfully we have maintained terms of payment for vendors and customers.

Here is a step-by-step procedure on how to create payment terms in the SAP Hana system.