Down Payment Interim Account & Down Payment Clearing Account
An explanation / definition of what the Down Payment Interim and Clearing Accounts are for and how they are used.
When a company receives or makes a down payment, the payment amount is recorded in an interim account before it’s deducted from the final transaction. For period end auditing purposes, the transactions that make up the value of the interim accounts must be easily auditable.
In SAP Business One, postings are made to the following two interim accounts in the down payment process:
- Down payment clearing account
- Down payment interim account
The postings to these two accounts are automatically reconciled as follows:
- Down Payment Request ProcessWhen you create a payment for an A/R or A/P down payment request, the down payment interim account is debited or credited with the payment amount, and the down payment clearing account is credited or debited with the payment amount excluding tax.
When you fully or partially draw the down payment to the final A/R or A/P invoice, the down payment interim account is credited or debited with the drawn amount, and the down payment clearing account is debited or credited with the drawn amount excluding tax.
As a result, the postings to the down payment interim account and the down payment clearing account are fully or partially reconciled accordingly.
- Down Payment Invoice ProcessWhen you create a full or partial payment for an A/R or A/P down payment invoice, the down payment clearing account is credited or debited with the invoice amount excluding tax.
When you fully or partially draw the down payment to the final A/R or A/P invoice, the down payment clearing account is debited or credited with the drawn amount excluding tax.
As a result, the postings to the down payment clearing account are fully or partially reconciled accordingly.
In the above two processes, if the final A/R or A/P invoice is then fully or partially drawn to a credit memo, the postings to the two accounts generated by the A/R or A/P invoice are proportionately reversed and reconciled.
However, if either of the two accounts has been fully, manually reconciled before the automatic system reconciliation takes place, SAP Business One does not perform the system reconciliation.
If you would like further help and support with SAP Business One contact 1 Dash 1 and a qualified SAP Business One consultant will contact you to discuss your requirements.
