An update today is about partial payment and residual payment. Both are technical terms for payment in SAP. There is small different between partial payment and residual payment. And this different always be what newbie in SAP asking for. So, I will explain the meaning of these 2 payment types and give you an example to make this more clear. Hope this help.
Partial payment and residual payments are two types of payments where the treatment of the payment would differ.
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For example
If I am supposed to pay 100 USD, this entire 100 USD will be in open-item its now. Then, 75 USD will be paid. Let’s how different between Partial Payment and Residual Payment in SAP.
1. Partial payment
Dr. Expense 100 USD
Cr. Vendor 100 USD <open-item>
Then, I paid 75 USD from by bank account.
Dr. Vendor 75 USD <open-item>
Cr. Bank 75 USD
System shows that 75 USD is paid as payment. Both 100 USD and 75 USD documents are in open item. It’s mean that you will see movement of transaction that 100 USD still exist, 75 USD is paid and 25 USD is still to be paid.
In Partial Payment, the document of 100 USD will be cleared only if the entry is made. Until that time the 100 USD document along with the other partial payment made will be open.
The remaining balance to be paid will be generated and 25 USD (new document) will also be in open item until whole thing is cleared.
This allows us to see what the original outstanding 100 USD was.
2. Residual payment
Dr. Expense 100 USD
Cr. Vendor 100 USD <open-item> will be cleared with payment document
Then, I paid 75 USD from by bank account.
Dr. Vendor 100 USD <cleared>
Cr. Vendor 25 USD <open-item>
Cr. Bank 75 USD
The original outstanding document for 100 USD is automatically cleared by the system when payment of 75 USD is done. A new document will be generated as open for 25 USD.
Here we cannot trance the original outstanding as it will be shown as cleared though we have not cleared entire 100 USD. This gives a picture that we have cleared 100 USD which in incorrect as we have just paid 75 USD.
Hence in many companies partial is preferred as it shows the original outstanding, partial payment made along with the balance amount to be paid.
Label: Partial Payment in SAP, Residual Payment in SAP, What's different between Partial Payment and Residual Payment in SAP.