What is Partial Payment?

Definition

Partial Payment refers to a payment made for only a portion of the total amount due on an invoice, contract, or financial obligation. It allows organizations and customers to manage cash flow while still honoring their payment commitments.

Key Features

• Payment Controls: Requires Vendor Payment Authorization and adherence to Payment Segregation of Duties to ensure accurate and authorized partial disbursements.

• Automation: Integrated with Payment Automation (Treasury) and Payment Approval Automation systems to schedule and execute partial payments efficiently.

• Verification: Uses Payment Verification Control to reconcile partial payments against invoices or contracts.

• Financial Strategy: Supports Early Payment Discount Strategy and Early Payment Discount Policy by applying discounts proportionally to partial payments when applicable.

• Monitoring and Analysis: Provides insights through Customer Payment Behavior Analysis and tracks Payment Failure Rate (O2C) and Payment Failure Rate (AR) to optimize collections and cash flow.

• Integration: Works with Payment Gateway Integration for secure and timely execution of partial transactions, and can accommodate complex settlements such as Share-Based Payment (ASC 718 / IFRS 2).

Summary

Partial Payment allows organizations or customers to pay a portion of an obligation while maintaining proper authorization, verification, and automation. It enhances cash flow management, supports financial strategies, and ensures accurate recording of payments.