What is down payment in SAP FI - Financial Accounting?

SAP Term: down payment

• Component: FI

• Component Name: Financial Accounting

• Description: A part of the full price paid at the time of purchase or delivery with the balance to be paid later. Down payments are shown separately from other receivables and payables on the balance sheet. A distinction is made between: Down payments made displayed under fixed and current assets Down payments received displayed under payables

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• Key Concepts: 
  Down payment is a payment made in advance of the full amount due. In SAP Financial Accounting (FI), down payments are used to record customer payments that are made before goods or services are delivered. Down payments can be used to reduce the amount of money owed by customers and can also be used to secure a customer’s commitment to purchase goods or services. 
  
  How to use it: 
  In SAP FI, down payments are recorded as a special type of customer invoice. The down payment is posted as a debit to the customer’s account and a credit to the down payment account. When the goods or services are delivered, the down payment is applied against the invoice and the remaining balance is due from the customer. 
  
  Tips & Tricks: 
  When recording down payments in SAP FI, it is important to ensure that the correct accounts are used. The down payment account should be used for all down payments and should not be confused with other accounts such as accounts receivable or accounts payable. 
  
  Related Information: 
  For more information on how to use down payments in SAP FI, please refer to the SAP Help documentation.