What is prepaid agreement party in SAP TM - Transportation Management?

SAP Term: prepaid agreement party

• Component: TM

• Component Name: Transportation Management

• Description: The business partner with whom a forwarding agreement is made for the first part of a transport, according to agreed Incoterms. The system bases charge calculations on the agreement made with the prepaid agreement party. The prepaid agreement party may also be the prepaid bill-to party and the prepaid payer. For example, the Incoterm agreed between a seller and a buyer in a transport from Germany to the U.S. is FOB Free On Board from location Hamburg. The seller pays for the transportation charges to Hamburg and the buyer pays for the charges from Hamburg to the U.S. The system uses the prepaid agreement party to calculate the charges in the invoice for the seller.

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• Key Concepts: 
  A prepaid agreement party is a type of business partner in SAP Transportation Management (TM). It is a party that has agreed to pay for transportation services in advance. This type of agreement is often used when a customer wants to guarantee that their goods will be shipped on time and at a certain cost. 
  
  How to use it: 
  In SAP TM, prepaid agreement parties are set up in the Business Partner Master Data. This is done by creating a new business partner and assigning the “Prepaid Agreement Party” role to it. Once the business partner is created, it can be used in the transportation planning process. 
  
  Tips & Tricks: 
  When setting up a prepaid agreement party, it is important to ensure that all relevant information is entered correctly. This includes the payment terms, payment method, and any other details that may be required. 
  
  Related Information: 
  For more information on setting up prepaid agreement parties in SAP TM, please refer to the official SAP documentation.