Cash Discount if F110 being considered even after expiry of due date

Question

Hello SAP Consultants,
I have setup a payment term for client which is 1% disc if paid within 10 days of invoice date. On running automatic payment program F110, irrespective of no. of days, the payment program generates discount of 1%. (I am using standard payment method C-cheque)
My doubt is why SAP is applying cash discount in F110 even when the payment is being made after 10 days say after a month.
I have cheched the setting in FBZP in All company Codesfor Maximum Cash Discount. The tick is not there means it is not activated. Still we are getting the above error in F110.
Regards,
Abhishek

Answer 1

Hi Abhishek,
The problem you're experiencing is caused by your payment term configuration, which probably has 1% 5 days but does not include how to handle cash discount after that date e.g. 0% 6 days. You can test this quite simply (presuming you have access to a test system) by changing the payment term configuration to include 0% for 6 days then post a vendor invoice with the same details provided in your message and process for payment. Alternatively find an existing vendor invoice with payment term you mention and double click into the vendor line item and add 6 days to the Cash discount days 2 field but leave the Cash discount percentage 2 field blank (see example below) then process for payment. I have also pasted the text from OSS note 48384 below which refers to this issue.
Vendor line item - Additional details tab
Payt terms   XXXX                    Days/percent 5   1.000  % 6          %    
Expected results (based on details mentioned in your message):
Payment run posting date: 15/03/10  -  Posting date of next payment run: 16/03/10
cash discount still valid and should be deducted
Payment run posting date: 16/03/10 -  Posting date of next payment run: 17/03/10
cash discount not valid and should not be deducted
SAP Note 48384 - Cash discount is taken although item overdue
Note Language: English Version: 4 Validity: Valid Since 20.02.1997
Summary
Symptom
Vendor invoice is paid with cash discount by the payment program
although the cash discount period has expired, the "Always max. cash
discount" flag in configuration Payment program is not set and no cash
discount agreement is noted in the document either.
Additional key words
F110, payment run
Cause and prerequisites
If in the terms of payment only, for example, 10 days 3 % and nothing else has been defined (further fields are not filled at all), the payment program has no instructions as to how the payment is to be made if the first cash discount period has expired. Nevertheless, the payment is made with cash discount terms 1 under these circumstances.
Solution
Choose other terms of payment.
Header Data
Release Status: Released for Customer
Released on: 19.02.1997 23:00:00
Master Language: German
Priority: Correction with medium priority
Category: Consulting
Primary Component FI-AP Accounts Payable
The Note is release-independent