Installment Plan
Definition
With an installment plan you divide source items to several installment receivables that have a due date in the future. Once an installment plan has been posted, the items of the installment plan and not the source items are referred to when a bank collection is made or when a dunning run is carried out.
Use
You create an installment plan for business partners wishing to make payment but who are temporarily unable to keep up their payment obligations. One or more source items can form part of an installment plan. You can include receivables and items for a currency and a contract account in an installment plan, and create installment plans on a cross-account basis.
Structure
An installment plan consists of a statistical document with several installment receivables. The individual installment receivable is cleared upon payment. The number of the installment plan is saved in the source items. This ensures a connection between the installment plan and the source receivables and between the source receivables and the installment plan. If interest is payable on an installment plan, the installment plan will also have an interest supplement.