CFR Example: Payment w/o Invoice Reference (Payment on Account)

Scenario

This example considers unassigned payments, also called payments on account . Since the actual is not known, no “ real ” expense account is available to be put into field RE_ACCOUNT. Therefore in this document an advance expense account is used for RE_ACCOUNT and re-assigned to the correct account assignment after the clearing with a posted invoice.

The graphics below illustrate the individual steps of the process.

CFR : Payment on Account – Step 1

This graphic is explained in the accompanying text.

To update the information on available cash as quickly as possible, you first post a bank statement as a payment on account - bank account against the bank clearing account. Since you have no invoice reference on the payment, the revenue/expense account (RE_ACCOUNT) in this document is filled with the advanced expense account maintained in Customizing for the constant for unassigned processes.
CFR : Invoice – Step 2
Next, the vendor invoice is posted. With the inheritance mechanism, the information about the expenses involved (RE_ACCOUNT) is saved in the split version of the document (Internal View Accounting Interface).
CFR : Payment– Step 3
In this step, payment of the invoice is made from the bank clearing account. Unlike in the Cash Ledger, bank clearing accounts can be interpreted as cash relevant.
CFR : Clearing – Step 4
Finally, both open items – the bank statement (step 1 above) and the payment (step 3) - are cleared against each other on the bank clearing account. Since these items are assigned to different expense accounts and the respective account assignment (RE_ACCOUNT) is defined as a balancing G/L entity, additional document line items are generated in the clearing document to provide a zero balance with respect to all RE_ACCOUNTS involved.