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This flowchart provides a detailed overview of the Advance Payment (also known as Down Payment) Process in SAP S/4HANA Finance Accounts Payable (FI-AP), illustrating how advance payments to vendors are managed. This process ensures that all advance payments are correctly accounted for and tracked within the system. Here’s a breakdown of each step in the flowchart:

  1. Vendor Advance Request: The process begins when a vendor requests an advance payment. This can be based on either a Purchase Order (PO) or be non-PO based.
  2. Processing the Request:
    • Non PO-Based Advance: If the advance request does not relate to a specific PO, the request is processed through a different procedure, potentially involving additional verification steps such as checking for a proforma invoice in SAP (transaction code F-48). If a proforma invoice is not received, the process may halt or require further action.
    • PO-Based Advance: For PO-based advances, the purchase order itself is used as the basis for the advance payment. The PO must be approved. If rejected, it may be sent for corrections before proceeding.
  3. Advance Payment Execution:
    • Performa Invoice Verification: Before executing the advance payment, a proforma invoice is verified. If received, the process moves forward to the payment execution.
    • Payment Execution: This involves debiting the vendor advance and crediting the bank outgoing account. This step is crucial for managing cash flow and ensuring that all financial transactions are accurately recorded.
  4. Extra Notes:
    • SAP Standard Options for Down Payment (DP): SAP provides two standard options for handling down payments: Mandatory and Voluntary. These options determine how the advance payment is recorded and tracked in the system.
    • Advance Updates in Financial Records: All advances are updated in the Vendor Ledger for accounts payable management and in the General Ledger for statutory reporting purposes. This ensures compliance with financial regulations and aids in financial audits.

This flowchart effectively outlines the vendor payment process, ensuring compliance with financial policies, proper management of advance payments, and accurate financial execution within SAP S/4HANA.

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