AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

Automatic Payment Program (APP) Configuration

BY:
S.SATYANARAYANAN
ASSOCIATE COSULTANT- SAP FI
DEXLER INFORMATION SOLUTIONS

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

INDEX

Introduction:.............................................................................................................................................. 4
Setting up the Payment Program ............................................................................................................. 5
FIGURE 1: TCode: FBZP - Payment Program Configuration Screen............................................ 5
I. Configuration: All Company Codes ............................................................................................... 6
FIGURE 2: Payment Program All Company Codes configuration screen ................................. 6
Paying company code ........................................................................................................... 6
Sending company code......................................................................................................... 6
Separate Payments for each Business Area......................................................................... 6
Payment Method Supplements ............................................................................................. 6
Tolerance days for payables ................................................................................................. 7
Cash Discounts ..................................................................................................................... 7
Special G/L transaction ......................................................................................................... 7
II. Configuration: Paying Company Codes ....................................................................................... 8
FIGURE 3: Payment Program Paying Company Codes configuration screen. ......................... 8
Minimum Amounts................................................................................................................. 8
No Exchange rate differences ............................................................................................... 8
No Exch Rate Diffs (Part Payments) ..................................................................................... 8
Separate payment for each ref. ............................................................................................. 8
Bill\Exch pymts ...................................................................................................................... 8
Bill of exchange data ............................................................................................................. 9
Forms for Payment advice and EDI:...................................................................................... 9
III. Configuration: Payment Method/Country ................................................................................... 10
FIGURE 4:Payment ProgramPayment Method/Country Overview screen 10
Incoming/Outgoing Indicator ............................................................................................... 10
Payment method classification............................................................................................ 10
FIGURE 5: Payment Program Payment Method/Country configuration screen. ..................... 11
Required master record specifications ................................................................................ 11
Posting details ..................................................................................................................... 11
Payment Medium ................................................................................................................ 11
IV. Configuration: Payment Method in Company Code................................................................... 12
Minimum amount limit for payment...................................................................................... 12
Maximum amount limit for payment..................................................................................... 12
Distribution amount ............................................................................................................. 12
FIGURE 6: Payment method in company code screen................................................................. 12
Single payment for marked item.......................................................................................... 12
Payment per due date ......................................................................................................... 12
Foreign Payments/Foreign Currency Payments.................................................................. 13
Bank Selection Control........................................................................................................ 13
V. Configuration: Bank Determination: Bank Selection and House Banks ...................................... 13
Ranking Order..................................................................................................................... 13
FIGURE 7: Payment program configuration; Ranking Order Screen............................................ 14
Bank Accounts .................................................................................................................... 14
Available amounts ............................................................................................................... 14
FIGURE 9: Payment Program Configuration; Available Amounts screen. .................................... 15
Value Date .......................................................................................................................... 15
FIGURE 10: Payment Program Configuration; Value Date screen............................................... 16
Expenses and charges........................................................................................................ 16
Conclusion................................................................................................. Error! Bookmark not defined.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

ABSTRACT

This paper is aimed at providing an understanding of the configuration settings that are maintained on
the IMG screen to facilitate a payment run to be carried out. There are settings that need to be
maintained regarding different parameters such as permitted payment method for country and company
codes, maximum and minimum amount for which the payment program would be run, bank
determination and so on. This paper would provide a detailed explanation of every setting that is to be
maintained for a successful payment run.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

Automatic Payment Program Configuration

Introduction:
Every company is involved in purchasing goods or services from different vendors for which it needs to
pay (at a later date) depending on the payment terms set. For example, the vendor expects the
company to pay within 45 days of the sale. The company uses several methods to pay its dues to its
vendors. Some examples of payment methods include Bank transfers, Check payment etc. Now, these
payments to the vendors can be carried out manually or automatically using the automatic payment
program in SAP.

The Payment Process includes the following activities:

Entering the invoices (vendor invoices for the business purchase)

Analyzing the open invoices for due dates, that is, checking whether the payment is due. This
is determined by the payment terms set.

Reviewing the invoices that are due for payment in the payment proposal.

Approving the payment proposal for payment or modifying it.

Making the payment to settle the invoices.

The SAP Automatic Payment Program helps to:

Select the invoices to be paid

Post the payment documents (updating the vendor books and settling the vendor open items)

Print Payment media (for example: Printing the checks to be given to the vendors)

This paper would discuss in detail, the structure of the payment program configuration for customizing
and scheduling the payment run.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

Setting up the Payment Program

FIGURE 1: TCode: FBZP - Payment Program Configuration Screen.

The payment program configuration is done in the transaction code FBZP. This T-code can also be
accessed using the menu path: SAP Easy Access Screen
Accounting
Financial Accounting

Accounts Payables
Periodic Processing
Payments
Environment
Maintain Configuration. This
screen has settings which are divided into the following categories in the form of buttons: All Company
Codes, Paying Company Codes, Payment Method in Country, Payment Method in Company Code,
Bank Selection, and House Banks as shown in Figure 1.

This paper would discuss each button along with its configuration.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

I. Configuration: All Company Codes

FIGURE 2: Payment Program All Company Codes configuration screen

In this activity, you would make configuration for all the company codes involved in the payment
transactions. For each company code, you would make the following specifications:

Paying company code: You can assign a paying company code to each company code. This
means that you can have one company code process payment transactions centrally for
several company codes. Posting to bank accounts or sub-accounts are made in the company
code specified in this field during the automatic payment transactions.

Sending company code: This is used in case of cross company code payments wherein one
company code (say company code A) makes payment for another company code (say
company code B). In this case, company code B would become the sending company code
and company code A would be the paying company code. If the sending company code is not
specified, the system automatically regards the paying company code as the sending company
code. In case, the sending company code is different from the paying company code, the
system notes the sending company code in the payment advice. This note is information for the
business partner.

Separate Payments for each Business Area indicator, if set, enables the line items from
different business areas to be paid separately.

Payment Method Supplements indicator, if set, a payment method supplement can be

predefined in the customers and vendors of the company code. This supplement is used for

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group payments. Payments are separated according to payment method supplements and can
be printed separately. The payment method supplement is defaulted during the document entry
and can be overwritten.

Tolerance days for payables: This specifies the number of days by which the cash discount
period and the period for the due date for net payment can be exceeded without any charge or
loss of discount.

Cash Discounts: It specifies the minimum percentage rate for payment with cash discount.
Only items that have a cash discount percentage rate greater than or equal to the one specified
here are paid with the cash discount deducted. If the percentage rate is less than the one
specified here, the payment is made at the due date for net payment (without any cash
discount deduction).

Special G/L transaction to be paid for exception list for vendors and customers: These
fields indicate whether all the open vendor/customer items that have been created with one of
the specified special G/L indicator are included in the payment or are displayed in the
exception list.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

II. Configuration: Paying Company Codes

Paying Company Code is a company code which processes the payment transactions possibly for other
company codes too. Posting to bank accounts or sub-accounts are made in the company code specified
in paying company code field in the screen during the automatic payment transactions.

FIGURE 3: Payment Program Paying Company Codes configuration screen.

The following activities can be configured here:

Minimum Amounts for the incoming payments and outgoing payments. If the amount in
question does NOT equal or exceed the amount specified in this field, the line items that make
up this amount are printed in an exception list.

No Exchange rate differences check box, if set, ensures that no exchange rate differences
are posted by the payment program, that is, no exchange rate difference posting is generated.

No Exch Rate Diffs (Part Payments) indicator, if set, ensures that the payment program for
partial payments does not post exchange rate differences.

Separate payment for each ref. checkbox indicates that only invoices and credit memos that
have the same payment reference, can be settled with one payment. This indicator is set if the
payment methods used in the country uses a payment reference for each payment.

Bill\Exch pymts indicator causes the payment transactions with bills of exchange fields to be
displayed.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

Bill of exchange data:



One bill of exchange per invoice indicates that a separate bill of exchange is to be
created per invoice

One bill of exchange per due date indicates that items which are due on the same
date can be paid together.

One bill of exchange per due date interval indicates that items which are due in a
specified period can be paid together with a bill of exchange. The periods are
individually specified with each payment run.

Bill of exchange due date for incoming payment specifies the maximum life which is
allowed for a bill of exchange that is issued for an incoming payment. The days
specified here is added to the posting date of the payment run. Only those invoices
which are due on the date resulting from it are ignored in the payment run.

The minimum and maximum due dates for outgoing payments specifies the minimum
or maximum life which is allowed for a bill of exchange with which an outgoing
payment is made. The days specified here is added to the posting date of the
payment run. Invoices which are only due within the dates resulting from the minimum
or maximum life are included in the payment run.

Forms for Payment advice and EDI: You can specify the form name if you want to print
payment advice notes or an EDI accompanying sheet. You can also specify the SAP script text
modules that contain the details about the sender that are to be printed on the payment advice
note. The standard system contains forms for payment advice notes and EDI which can be
copied and adjusted to meet the requirements.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

III. Configuration: Payment Method/Country

FIGURE 4: Payment Program Payment Method/Country Overview screen.

In this activity, you would first specify which payment methods are to be used in each country and then
make the following configurations:

Incoming/Outgoing Indicator determines whether this payment method is for outgoing

payments or incoming payments.

Payment method classification can be carried out specifying the type of payment method in
question such as check or bank transfer. You can also make other settings related to the
features of the payment method. It includes:

Indicator for the payment method that follows the post office current account method.
If this indicator is set, only those post office bank branches that are selected to
process the payment can run the current accounts.

Indicator to check whether the payment method is allowed for Personnel payments.

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FIGURE 5: Payment Program Payment Method/Country configuration screen.

Required master record specifications:



Here, you determine the specifications in the master record that control the payment
method used. If the indicator Street, P.O. Box or P.O. Box postal code is set, it
means that the payment method can only be used for a payment for which a Street,
P.O. Box or P.O. Box postal code is specified in the Customer/Vendor master record
in addition to the location.

Similarly, if the Bank Details indicator is set, the payment method can only be used if
these bank details have been maintained in the Customer/Vendor master record.

Posting details or specifications specifies how the payment is posted, that is, which document
type is to be used for posting payment document, and which document type is to be used for
posting clearing documents during cross-company code payments etc.

Payment Medium: You can specify the details of classic payment program or details for
payment medium workbench.

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IV. Configuration: Payment Method in Company Code

In this activity, you would specify which payment method can be used per company code and determine
the conditions under which the payment method is used. You can maintain the following configurations
in this activity:

Minimum amount limit for payment: The payment method specified is only selected by the
payment program if the payment amount is not lower than the limit specified here.

Maximum amount limit for payment: The payment method specified is only selected by the
payment program if the payment amount exceeds the limit specified here. You always have to
specify the maximum amount; otherwise the payment method cannot be used. If you specify
the payment method in the open item, the payment program ignores the amount entered here.

Distribution amount Payments exceeding this distribution amount are analyzed to see if it is
possible to split them into several payments so that the total should not exceed the distribution
amount.

FIGURE 6: Payment method in company code screen.

Single payment for marked item indicator causes open items, which contain this payment
method, to be paid individually. All items, for which payment method so indicated is entered
explicitly, are paid individually. If the payment method is not specified explicitly but is instead
selected by the payment program, several items can be paid together.

Payment per due date indicator specifies that only items that are due on the same day will be
paid in a single payment.

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Foreign Payments/Foreign Currency Payments:



Foreign business partner allowed indicator allows foreign customer and vendors to be
processed using this payment method.

Foreign currency allowed indicator allows use of foreign currency with this payment
method.

Customers/Vendors bank abroad indicator allows payments from customers and

vendors abroad.

Bank Selection Control:



No Optimization indicates that the payment method does not perform bank
optimization during selection of own bank and bank of business partner.

Optimize by bank group indicator specifies that you want the system to optimize the
payment process by selecting the optimal pair of banks (your bank and the
Customers/Vendors bank)

Optimize by postal code indicator determines that the payment program should pay
the item from your house bank which is geographically nearest to the city or residence
of the customer/vendor.

V. Configuration: Bank Determination: Bank Selection and House Banks

In this activity, you make settings to select banks or bank accounts for which payments need to be made
in the payment program. On the bank selection screen, the file folders are located for each of these
sections: Ranking Order, Amounts, Accounts, Charges, and Value date. The user should work through
each of these folders to complete the payment program configuration.

Ranking Order: The ranking order of banks specifies which house banks are permitted in the
payment run and ranks them in a list as shown in Figure 6

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FIGURE 7: Payment program configuration; Ranking Order Screen.

Bank Accounts: For each house bank and payment method (currency if required) you specify
which bank account is to be used for payments.

FIGURE 8: Payment Program Configuration; Bank Accounts screen.

Available amounts: For each account at a house bank, you enter the amounts that are available
for payment run. You enter separate amounts for incoming and outgoing payments. Specifying
available amounts enables you to control which bank account is to be used for payments. You can
specify the amounts depending on the value date at the bank.

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FIGURE 9: Payment Program Configuration; Available Amounts screen.

Value Date: The number of days to value date is the probable number of days before a debit and/or
credit memo is carried out to the bank account. The number of days is added to the posting date
and results in the date relevant for cash management and forecast on which the debit and/or credit
memo is to be expected on the bank account.
Example: Payments which are made by transfer are deducted by your bank the next day. This
occurs regardless the amount. This means the money must be available the next day for payments
with this payment method. Hence, for this payment method, you would enter 1 in the Days Until
Value Date field.

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FIGURE 10: Payment Program Configuration; Value Date screen.

Expenses and charges: This field is used to enter any bank charges that are part of the payments
made or received. For incoming payments, the system subtracts the bank charges from the clearing
amount. For outgoing payments, it adds the charges to the clearing amount.

FIGURE 11: Payment Program Configuration; Expenses/Charges screen.

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AUTOMATIC PAYMENT PROGRAM [APP] CONFIGURATION

Summary
This paper highlighted the important payment program configurations required to run a payment
program. Running a payment program would involve several steps including setting parameters
regarding the payment method (used for the particular payment run), payee (the vendor accounts
involved); generating payment proposal indicating the vendor line items by selecting payment and line
items which cannot be paid for some reason; scheduling the print and updating the vendor books.

Successful payment program run would pay the vendors dues and clear the vendor open line items.

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