Scenario :- Problem with Down payment settlement using installment payment term. 

1.  When we create Sales order, (sales item value = 100) use payment term : 
     0009 (Installment Payment term, 30%, 40%, 30%). In the Billing Plan, I specify 2 records, 1st record is 
     Downpayment  request 30% of Order value, billing type is FAZ . the 2nd record is Final invoice 100%, billing 
     type is F2.

2. Create Billing type Down payment request , it will document as Noted item in the accounting document.

3. Receive Downpayment from customer via FI screen , at this stage the asccounting document is created as following
      Dr. Cash/Bank 30
         Cr. Advance from customer 30

4. When I create Billing document for the sales item, the down payment value will be proposed for settlement at Billing 
    Creation, I then accept the default value of down payment clearing.  The accounting document is as below
     Dr. AR 30  (*split AR by installment payment term)
           AR 40
           AR 30
         Cr. Sales 100
      Dr.  Advance from customer 30
         Cr. AR 9  (DP. 30% * 30)
         Cr  AR 12  (DP. 30% * 40)
         Cr  AR 9  (DP. 30% * 30)

It seems SAP settlement Down payment by Installment Payment term.  I was wondering that is there are alternative or an option  to setup the Down payment settlement independent of Installment term. I meant, I don't want to have the last 3 Credit item as above, I want only 1 line item of credit,  the accounting should be
     Dr. AR 30  (*split AR by installment payment term)
           AR 40
           AR 30
         Cr. Sales 100
     Dr.  Advance from customer 30
         Cr. AR 30 (Not separate by Installment payment term)

Solutions : Suggesstions on how I could proceed?

Your problem with Down payment settlement is common. Many users object to the down payment or security lodgement mechanism. In our case we often park and apply the advance manually to final invoice.

However, following the above case we sometimes use this with our PS orders:

1. Create Sales order, (sales item value = 100) with billing plan with three steps 30% down payment,30% std billiing on 
    order completion and 70% on delivery. A little different to your original Billing Plan, but 1st record is Downpayment 
    request 30% of Order value, billing type is FAZ . the 2nd & 3rd records are std F2 invoices 30% ,70%.

2. Create Billing type Down payment request , it will document as Noted item in the accounting document.

3. Receive Downpayment from customer via FI screen , at this stage the accounting document is created as following :-
    Dr. Cash/Bank 30
       Cr. Security deposit payment 30 ( In many countries this may be subject to TAX laws)

4. Create the First Billing documents , the down payment value will be proposed for settlement at Billing Creation, then 
    accept the default value of down payment clearing as these equal each other.  The accounting document is as below
    Dr. AR 30
        Cr. Sales 30
    Dr.  Advance from customer 30
        Cr. AR 30

5. Create the Second Billing document ( down payment value has expired and will not be proposed) The accounting 
    document is as below is then standard for the last installement.
     Dr. AR 60
        Cr. Sales 60

This alternative provides a cleaner option with the Downpayment.

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