Deducting cash discounts for incoming invoices is one of the easiest ways to save costs in the company. For this to work successfully, payment terms must be maintained correctly and promptly in SAP. In this four-part blog series, I would like to show you how to analyze payment terms using data analyses to investigate whether discounts are not being used.
Part I of the series: "Payment terms in vendor master data"
1. Are you failing to benefit from cash discounts due to poorly maintained payment terms in SAP?
2. How to analyze bad payment terms in SAP in two steps
3. Revised terms of payment: How to clean up your vendor master data
4. How to analyze your own payment behavior in SAP
Just a few percent?
One or two percent discount does not sound like much, right?
But as every business owner knows: There can be no better form of "financial investment" than making use of cash discounts as a form of supplier credit.
Because the one or two percent discount is not being offered over one year, but over a period of just a few days, often 20 or 30 days. Now calculate how much that is worth over a whole year! In times of low interest rates, that’s better than any other form of investment you can think of.
But in larger companies, where you may be dealing with hundreds or thousands of invoices, it is important to keep track of things and ensure you pay on time.
So how do you go about making sure this happens? In the master data, the payment terms of your vendors should be maintained properly, so that the payment can enter the payment run automatically and cash discount can be used.
After studying this blog series, you will know:
- how Terms and Conditions are organized in SAP
- how to find suppliers with poorly maintained payment conditions in SAP and
- how you can evaluate your own payment behavior.
Why are payment terms missing in the SAP vendor master data?
Missing payment terms are often the result of poorly maintained master data due to lack of information or motivation in the master data department. If the vendor master data is not properly maintained with regard to the payment terms, then such vendors cannot automatically be proposed for payment in SAP.
How do you prevent payment terms from being missing in vendor master data?
A complete overhaul of master data should be carried out in accordance with a well-thought out set of internal company guidelines for master data management (masterdata governance), which contains clear instructions on how to maintain payment terms.
Furthermore, it would conceivably also be technically possible to define the data fields for the payment condition as mandatory fields in SAP, so it is simply no longer possible to maintain master data without a payment condition being entered.
If you want to learn more about the indicators of zap Audit in the area of purchase-to-pay, you can download our Whitepaper:
In the next part of this series, you will learn how to perform a data analysis to evaluate the payment terms in your vendor master data.