- Terms of payment are conditions agreed upon between business partners for the payment of invoices.
- The conditions define the due date and the cash discount offered for payment of the invoice within a certain period.
- Some terms of payment are predefined in the system; you can add new ones if necessary.
- Terms of payment enable the system to calculate a cash discount and invoice due date.
- Payment terms control the determination of the baseline date, allowed account type, and default payment method.
- Transaction code: OBB8
- Menu path: Display IMG -> Financial Accounting -> Accounts Receivable and Accounts Payable -> Business Transactions -> Incoming Invoices/Credit Memos -> Maintain Terms of Payment OR
- Menu path: Display IMG -> Financial Accounting -> Accounts Receivable and Accounts Payable -> Business Transactions -> Outgoing Invoices/Credit Memos -> Maintain Terms of Payment
- Invoice-related credit memos:
- Credit memos can be linked to the original invoice by entering the invoice number in the “Invoice Reference” field during document entry.
- In this case, the terms of payment are copied from the invoice so that the invoice and the credit memo are due on the same date.
- Other credit memos:
- Terms of payment in other credit memos are invalid. These credit memos are due on the baseline date.
- To activate the payment terms on these non-invoice-related credit memos, enter “V” as the alphabet in the “Invoice Reference” field when entering the document.
Accounts Receivable & Accounts Payable
Accounts Receivable:
- Define accounts for cash discount granted (expense account).
- Transaction code: OBXI
- Menu path: Display IMG -> Financial Accounting -> Accounts Receivable and Accounts Payable -> Business Transactions -> Outgoing Payments -> Outgoing Payments Global Settings -> Define Accounts for Cash Discount Taken
- Define accounts for cash discount taken (revenue account).
- Transaction code: OBXU
- Menu path: Display IMG -> Financial Accounting -> Accounts Receivable and Accounts Payable -> Business Transactions -> Incoming Payments -> Incoming Payments Global Settings -> Define Accounts for Cash Discount Granted
Self-Test
Question 1:
You need to enter a percentage rate in the terms of payment to calculate
A. Invoice discount
B. Cash discount
C. Credit amount
D. Debit amount
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Question 2:
How many cash discount periods can be entered in the terms of payment?
A. 2
B. 5
C. 3
D. 8
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Answers
1) B
2) C
