1. The document describes the process for incoming payments in SAP, including payments from customers for products, projects, services, and exports. 2. Commercial creates a payment advice that is used by Finance to post payments in SAP using transaction code F-28. 3. Payments can be posted using the payment advice number or by selecting open invoices if no payment advice was created.

1. Account Receivable AR Incoming Payment process in SAP
This Process Definition document describes the process of Incoming Payment (Other than down
payment) received from the Customer against an Invoice.
These Payments are received from the Customer for
• Product Sale
• Project sale
• Service Contract
• Export Sale
An organization Can receive incoming payment on following account
Incoming Payment Received from Customers (Product / Project / Service )
Incoming Payment from One Time Customers
Incoming Payment Received from Employees against sale of Products.
Incoming Payment received from Export Customers
Creation of Payment Advice (FBE1)
Payment advice will be prepared by Commercial Department .This will facilitate Cheque information to
flow in Accounts . Finance will select the payment Advice & post the payment by using the T-Code
F-28 once the Cheque is received with payment advice number.
Commercial will Input the following details in Payment Advice:
• Company Code
• Account Type – D( Customer)
• Account – Customer Code
• Payment Amount – Cheque Amount
• Deductions with reason for deduction
• Assignment (Cheque Number),
• Invoice Number
Save the Payment Advice document. A payment advice number will be generated.
Posting of Customer Receipt will be done in Finance by using T-Code F-28. Procedure of Processing the
payment is same as mentioned below except enter or select the payment advice number in the “payment
advice number” field.
Post Incoming Payment Procedure – (F-28)
Case I : Incoming payment with reference to payment advice
All Cheque which are received by Commercial are to be handed over to Accounts based on the
prerequisites defined above. Accounts will simulate & post the Payment using the Incoming Payment
transaction F-28
Following inputs to be entered by accounts
• Payment Advice number
• Document Date (date of the instrument)
• Posting Date
• Document Type (DZ for Customer Payment),
• Assignment –Cheque Number
• GL Account code for bank Incoming Clearing A/c,
• Amount

2. •
•
•
Value Date (Expected date of credit in bank account)
Profit Centre
Text (Narration )
In case of Cheque received against payment advice, no open items other than Invoice number enter in
the payment advice will be displayed. Simulate & Post the payment document.
Accounting Entry will be passed:
Cheque Deposited but not Cleared
Dr.
Freight/Water/Electricity Expenses
Dr.
To Customer Account
Cr.
Payment advice number will be deleted from the system ,once the incoming document is posted.
Case II : Incoming payment without payment advice
In case Cheque is received by finance directly we have to enter all above parameter & Customer number
then Select option “Process Open Items “.System will show all open items of that customer. Choose the
billing document to be cleared. Choose relevant option from “Standard” or “Residual Payment”. Simulate
& Post the document.
Accounting Entry will be passed:
Cheque Deposited but not Cleared
Dr.
Freight/Water/Electricity Expenses
Dr.
To Customer Account
Cr.
Incoming Payment Procedure from Customers (Fast Entry) F-26
This is another method of entering Cheque received from the Customer against an Invoice .System will
default the Bank Header Data throughout the Incoming Payment Process. Select respective Invoice &
Clear the Document. Simulate the Accounting Entries & Post the Document
Following inputs must be entered.
Bank header Data
Bank GL Account
Bank Profit Center
Currency
Cheque Value Date
Posting Period
Payment Details
Customer Code
Cheque Amount
Cheque Date
Cheque Number
Select option “Process Open Items“. Choose relevant option from Options “Standard”, “Residual
Payment”. All open transactions of the customer including down payments are displayed. Select the
Invoice & clear the outstanding. Simulate & Post the document.
Accounting entries:
Cheque Deposited but not Cleared
Dr.
Water/Electricity/Freight expenses Account
Dr.
To Customer Account
Cr.
Incoming Payment Procedure –Employee Customer

3. Initially the employee will be created as customer and vendor as well. When a product is sold to the
employee, the customer employee balance will be updated by the commercial with installment payment
terms. When the salary is due at the end of the month, then installment which was also became due will
be deducted from the salary & posted in Employee Vendor account.
Accounting Entries created at the time of billing (VF01)
Receivable –Employee
Dr.
To Sales Revenue Account
Cr.
Accounting Entries at the time of Salary Process – Month end (Installment)
Payroll Clearing Account
Dr.
To Employee -Vendor Account
Cr.
Accounting entries at the time of Knocking monthly installment
Employee Vendor Account
Dr.
To Employee Customer Account
Cr.
To Outgoing Clearing (Bank) Account
Cr.
Incoming Payment – Export Customers (F-28)
Incoming Payments against Export Customers is received directly at accounts. Then account will post the
Incoming payments as per the procedure mentioned above.
Bank Account
Dr.
To Customer Account Cr.
Foreign Exchange Rate Fluctuation (In case of Export)
Exchange rate fluctuation is booked for all incoming payments received from the Foreign Customer.
Unrealized gain/loss will be calculated based on the exchange rate maintained as on last day of the
month. In case of Realized gain/loss, exchange rate fluctuation will be calculated based on the date
payment is received.
If there is a Gain in Foreign exchange rate (Unrealized)
Adjustment for Exchange Fluctuation A/C
Dr.
To Exchange Gain –Export Unrealized
Cr.
If there is a loss in Foreign Exchange rate (Unrealized)
Exchange Loss –Export Unrealized
Dr.
To Adjustment for Exchange Fluctuation A/C
Cr.
These entries will get reversed on next day of the month.
If there is a Gain in Foreign Exchange rate (Realized)
Adjustment for Exchange Fluctuation A/C
Dr.
To Exchange Gain –Export Realized
Cr.
If there is a loss in Foreign Exchange rate (Realized)
Exchange Loss – Export Realized
Dr.
To Adjustment for Exchange Fluctuation A/C
Cr.
SAP T Codes to be used
Post Incoming Payments : F-28
Reset Cleared Items : FBRA
Customer Line item display : FBL5N
Incoming Payments-Fast Entry
F-26
Customer Balance : FD10N
Create Payment Advice : FBE1