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Chapter 14 ■ Defining FI Accounts Receivable and Accounts Payable
Account Type: Specify the account type you want to apply to your payment
terms. Since you are maintaining payment terms for your customers, click the
Customer checkbox.
Default to Baseline Date: The date you select here will determine the default
baseline date. In this exercise, we used the posting date. Click the Posting Date
checkbox.
Terms: Specify the terms, percentage rates, and number of days for your
payment terms. For this exercise, leave this section blank.
When you have updated the New Entries: Detail of Added Entries screen, click the Enter button on
the top-left side of the screen to confirm your specifications. Then save your payment terms.
The next step is to define payment terms for the percentage rates you are applying to your installment
plan. We will define payment terms for each of these percentage rates: 10%, 40%, and 50%.
Maintaining Payment Terms for an Installment Plan
You also have to maintain payment terms for each percentage rate in the installment plan quite differently
from the one you defined for cash discount, because each payment term holds different conditions. First
let’s set up the percentage rate of 10% for your payment terms for immediate payment and then do the
remaining percentage rates. To go to the screen where you will define the payment terms for your percentage
rates, follow this menu path: IMG: Financial Accounting (New) ➤ Account Receivable and Accounts
Payable ➤ Business Transaction ➤ Incoming Invoices/Credit Memos ➤ Maintain Terms of Payment. Or use
transaction code OBB8.
The Change View “Terms of Payment”: Overview screen is displayed. This is where you customize your
payment terms. Click the
button at the top of the screen. This will take you to the New Entries:
Detail of Added Entries screen. Update the following fields:
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Payment Terms: Enter a four-digit character that key you want to use as payment
terms for 10% (percentage rate) in this field. We used P010 in this exercise.
Own Explanation: Enter a short description of your payment terms in this field.
We used 10% payable immediately for this exercise.
Account Type: Select customer as your account type since this payment terms
relates to installment plans with customers. Click the Customer checkbox.
Default to Baseline Date: Select the posting date as your baseline date.
Terms: Leave this section blank since 10% payment is due immediately. You do
not need to set up any payment terms.
When you have updated the screen, click the Enter button on the top-left side of the screen to
confirm and then save your terms of payment. The system will take you back to the previous screen,
called Change View “Terms of Payment”: Overview. The next step is to define the payment terms for 40%
to 60 days. To return to the next screen where you will specify your payment terms, click the Next Entry
button on the top-right side of the screen or press F8 on your keyboard to go to the New Entries: Details of
Added Entries screen. Update the screen as follows:
Payment Terms: P040 (payment terms for 40%)
Account Type: Select Customer
Default to Baseline Date: Select Posting Date
Terms: Enter 60 in the No. of Days field