It is a common occurrence in business that a customer may not pay the exact amount of the invoice. They may overpay or pay less by a minor amount

For example, for an Invoice of Ksh. 1201, the customer may pay Ksh.1200.

SAP Business One gives you an option to set up overpayments/underpayments into a Separate Account.

This way, the example above will not remain open by the 1 shilling.

How do you set this up?

1. Go to Modules>>Administration>>Setup>>Financials>>Currencies
2. In the currencies set up window, specify the maximum overpayments/underpayments amounts per currencyIn the example above, we have set up 5 shilling for the currency KES – Kenyan Shilling in both incoming and outgoing payments
3. Next, we set up the round off account in the G/L Determination Window.                                              Go to Modules >> Administration Set up>> Financials>>G/L Account Determination NB: Setup overpayment and underpayment in the sales and purchasing tabs under the general option
4. Lets look at an example where we receive a payment that is less by 1 shilling.On the payment means window, indicate the actual amount received.                                                         NB: Remove any amount that goes to the Bank Charge field. By default, the system assumes that the difference is a bank charge.
5. The journal entry for this entry is as below; The customer is credited the full amount of the invoice i.e. 1201. The 1 shilling goes to the round off account.                                                                                                                                                                    NB: The round off account will have debits(from overpayments) and credits(from underpayments). The credits and debits will be cancelling each other in a period.  A debit balance is an expense while a credit balance is an income

I am Caroline Ininga Majute,  a SAP Business One ERP System Consultant based in Nairobi, Kenya. For more inquires about sap business one, contact me at: [email protected]