Automatic Payment Program;

The Payment Process includes the Following Steps

1. Invoices are Entered

2. Pending Invoices are analyzed for due date
3. Invoices due for payment are prepared for review
4. Payments are approved or modified
5. Invoices are paid

A consistently high volume of invoices have to be processed. Accounts Payable

Invoices have to be paid on time to receive possible discounts.
The Accounting department wishes to perform this processing of invoices
automatically. The Automatic Payment Program is a tool that will help users
manage payables. SAP gives users the options to automatically:

1. Select Open(Pending) Invoices to be paid or collected

2. Payment Documents to be posted
3. Print Payment Media or generate EDI

The Automatic Payment Program has been developed for both national and
international payment transactions with vendors and customers , and handles
both outgoing and incoming payments. Configuration We can configure the
Payment Program by selecting the Payment Program (Tcode - F110 ) Application
menu Environment -> Maintain Config
The Settings for Automatic Payment program are divided into following
Categories :

1. All Company Codes

2. Paying Company Codes
3. Payment Methods / Country
4. Payment Methods / Company Codes
5. Bank Selection
6. House Banks

All Company Codes : In this section we perform the following settings

1. Inter Company Payment Relationship

2. The Company codes that process payments
3. Cash Discounts
4. Tolerance days for Payments
5. The Customer and Vendor Transactions to be Processed
Paying Company codes : In this section we perform the following settings

1. Minimum Amounts for Incoming and Outgoing Payments

2. Bill of Exchange Parameters
3. Forms for Payment Advice and EDI
Payment Method / Country : In this section we perform the following settings

1. Methods of Payments - Cheques , bank transfers etc

2. Settings for individual Payment Methods -
1. Master record requirements
 2. Document Types for Posting
3. Permitted currencies
4. Print Programs

Payment Method / Company Code: In this section we perform the following

settings

1. Minimum and maximum payment amounts

2. Whether payments abroad and foreign currencies are allowed
3. Grouping Options
4. Bank Optimization
5. Forms for payment media
Bank Selection :

1. Ranking Order
2. Amounts
3. Accounts
4. Charges
5. Value Dates
Ranking Order

Bank Accounts

Available Amounts
Value Dates

Expenses / Charges
Execution : After Configuration of the Payment Process we will enter parameters
to execute the program. Enter the Transaction code F110 in the SAP Command
Field

Every Payment Program run is identified by two fields

1. Run date
2. Identification

In the Parameters Tab , We have to define the following

 1. What is to be paid - Docs. Entered Up to
2. What payment methods will be used - Payment Methods
3. When will the payments be made - Posting Date
4. Which company codes will be considered - Company Codes
5. How are they going to be paid - Payment Method Sequence decides the
Priority of the Payment Method

Save the Parameters Entered

After the Parameters are Entered we execute the Program by pressing the
proposal button in Application Toolbar

In the next dialog box , Check the "Start Immediately" and press Continue

A payment proposal is generated based on the parameters.

We can view the Proposal Log for possible errors by Pressing the Proposal Log
Button
We can edit the proposal to block the some payments if we want, Press the Edit
Proposal Button
In the next screen , the Proposal List of Vendors is generated who are to receive
the Payments

After edit the Proposal , and then run the payment run to release the payments.
We can schedule the payment run by coming back to main screen pressing the
Payment Run button
APP Sceneries

1.Importance of next date in APP?

Ans: Please press F1 you will get meaning full answer:

Posting Date of the next Payment Run

Use

This date is needed in order to check the due date of payables. If an item is
already overdue on the date of the next payment run, or would lose cash
discount, the system pays the item in this payment run.
The general rule for receivables is that they cannot be paid until the baseline
date for payment has been reached. Such items are paid on or after the baseline
date for payment, regardless of when the next payment run is scheduled for.

The next posting date is used in order to check the due dates of the payables, if
an open item is overdue on the date of next posting run it will include in the next
payment run,The business effects are, if the overdue items is not paid the
company has to pay interest on the arrears and will not be eligible to get the
discounts on the early payment.

2. APP(Automatic Payment Program)

Payment file
Payment to vendor has to be done by the bank. Company supplies the required
information to the bank in the form of file (xml or txt).
As a result of F110, output payment file gets created and stored at a particular
location in company’s server. This file is then sent to bank’s server by an
automated batch job program. Once bank receives the payment file, bank does
payment to vendor as per data provided in payment file.
Bank dictates what information it needs and in what format. Hence company
needs to generate output payment file as per bank’s requirement. This is referred
as payment medium file format.
Sap provides a list of predefined formats that can be modified to meet the bank’s
requirement.

A payment medium file normally contains below information:

 Company details

 Company’s bank account details (vendor to be paid from which bank account)

 Amount to be paid to vendor and in which currency

 Vendor bank account details (fetched from vendor master)

Payment to vendor has to be done by the bank. Company supplies the required
information to the bank in the form of file (xml or txt).
As a result of F110, output payment file gets created and stored at a particular
location in company’s server. This file is then sent to bank’s server by an
automated batch job program. Once bank receives the payment file, bank does
payment to vendor as per data provided in payment file.
Bank dictates what information it needs and in what format. Hence company
needs to generate output payment file as per bank’s requirement. This is referred
as payment medium file format.
Sap provides a list of predefined formats that can be modified to meet the bank’s
requirement.

A payment medium file normally contains below information:

 Company details

 Company’s bank account details (vendor to be paid from which bank account)

 Amount to be paid to vendor and in which currency

 Vendor bank account details (fetched from vendor master)

Payment to vendor has to be done by the bank. Company supplies the required
information to the bank in the form of file (xml or txt).
As a result of F110, output payment file gets created and stored at a particular
location in company’s server. This file is then sent to bank’s server by an
automated batch job program. Once bank receives the payment file, bank does
payment to vendor as per data provided in payment file.
Bank dictates what information it needs and in what format. Hence company
needs to generate output payment file as per bank’s requirement. This is referred
as payment medium file format.
Sap provides a list of predefined formats that can be modified to meet the bank’s
requirement.

A payment medium file normally contains below information:

 Company details
 Company’s bank account details (vendor to be paid from which bank account)

 Amount to be paid to vendor and in which currency

 Vendor bank account details (fetched from vendor master)

Down payment :

Advance payments to vendor can be done WRT to PO with t.codes in F-47 and F-
48 Follow the following steps & treat
1.Check the Vendor reconciliation A/C,
2.Go to FS00, and check Filed Status Group,
3.Go to OBC4, check the Filed Status Group, what u have mentioned for the
Vendor reconciliation account.
4. Go To material management segment and put optional entry for the field of
Purchase Order and save.
5.Now come to F-48, enter the date, vendor, assign the sp.G/L
transaction(A),bank sub account, amount,
&
then enter, it will take to next screen
Here you enter amount & your purchase order number with reference to your are
going to make the payment. Now simulate and save.
6. After the GR & IR is done, Perform F-54 for Down Payment Clearing
Follow the below mentioned steps;
1. F-47 - Create Down Payment Request (Here in selection screen specify all the
necessary details (Doc Type - KA) and press enter, on this screen specify amount
to be paid in advance and also specify the PO Document and line item and SAVE)
2. F-48 - Down Payment Entry w.r.t. Down Payment Request No
3. F-54 - Down Payment Clearing
At the time of MIRO, it will pop-up that advance payment is done to this vendor
against this PO.
Also take help of your FI Consultant if required.
Note: - Go to FS00, and check Filed Status Group for Vendor Reconciliation
Account, then go to OBC4, check the Filed Status Group, what you have
maintained for the Vendor reconciliation account. Here go To Material
management segment and put optional entry for the field of Purchase Order and
save.

The steps involved in downpayment are as follows for vendor

1. F-47 Down Payment request
2. F-48 Down payment
3. Post invoice e.g F-43
4. F-54 Clear down payment
5. Payment e.g F-53 or F110

Partial Payment
Partial Payment in APP - SAP FI

Some time we face the issue in which client want to pay partial invoice only that
to via automatic Payment program, so in order to make it feasible what all steps
will be required from configuration point of view has been explained below.

Configuration steps:
1) Maintain Account Configuration TCODE: FBKP Select the Sp. G/L-P

2) Maintain Payment Program: TCODE: FBZP

Path: SPRO - Financial Accounting - Accounts Receivable and Accounts Payable -

Business Transactions - Outgoing Payments - Automatic Outgoing Payments -
Payment Method/Bank Selection for Payment Program - Set Up All Company
Codes for Payment Transactions

Go to “ALL COMPANY CODES” screen maintain the Sp. G/L – P in the field Sp. G/L
transactions to be paid.

3) Post Vendor Invoice and Block for Payment TCODE: FB60 / F-43

Path: Easy Access – Accounting - Financial Accounting - Accounts Payable -

Document entry - FB60 – Invoice / F-43 - Invoice – general
Example you made invoice for 25000

4) F-59 - Payment request: TCODE: F-59

Path: Easy Access – Accounting - Financial Accounting - Accounts Payable -

Document entry - F-59 - Payment request
Here you would like to pay only 20000 out of 25000 so change the amount to 20k
and save it

5) Payment Run TCODE: F110

Path: Easy Access – Accounting - Financial Accounting - Accounts Payable -

Periodic Processing - F110 – Payments

6) Vendor balances after F110 TCODE: FBL1N (After processing you can check the
clear amount here
Vendor with multiple bank accounts - payments

Use the partner bank type function; create some like C, B, E or so and then enter
each against each bank account in the vendor master. Then make that field
mandatory for MIRO or FB60 transactions and hence enter the partner bank type
when creating an invoice. This will pick the correct bank account when paying for
a particular invoice.

you could use partner bank type function in the bank details furnished in the
vendor master and choose one of them in the document. It helps in assigning
the right bank for each document due to be paid. However, this will function
subject to other configuration aspects of APP being fine.

If you maintain a payment method in the vendor master it is valid for all invoices
posted to that vendor's account. If you maintain a payment method in the invoice
it is valid only for that invoice. If you maintain both, the payment
method in the invoice takes precedence over that in the vendor master. So you
can have the standard payment method in the master record but, if the vendor
wants a different payment method for some invoices, you can enter this in the
invoices and override the setting in the vendor master.

Automatic Payment programme (Currency)

Pls. check following in your payment program configuration. Configuration of
Payment Program can be access through APP Tcode F110. Go to Environment -->
Maintain Configuraiton.
Check Following:
1) Payment Method for Country : Whether Foreign currency (USD) is added in the
list of permitted currency for the payment method specified in the APP Run. If
not, add USD as a permitted currency for the payment method.
2) Payment Method for Company Code : Select Foreign Currency / Foreign
Payment indicator for the company code/ payment method combination. Select
all three indicator.
3) Check the house bank configuration : Whether house bank determined for the
company code/ payment method combination in ranking order is set up for any
specific currency payments. Keep teh currency field blank if you want to pay in
multiple currency from the house bank determined in ranking order.

APP for Customer & Vendor

1.As is read, APP also possible to pay Customers ? is it right
2. Generally we pay only to vendors, but in some cases we pay also customers too
like damage of goods and down payment return to customers... Generally APP
collects open due invoices for payment, but how the system recognizes customer
account for payment in APP? what is the configuration is required to pay
customers on APP?
senario:
A company has company code" A "and company code" B ", some "X" is the vendor
for company code A the same is Customer to company code B. Here company
code A is liable to pay vendor "X" and for company code B there is receivables
from same vendor "X" as a customer .
can we adjust amount from company code A to company code B, is system will
pass Automatic entry for it?

.Solution :
Yes you can use payment program for both Account types K & D
2. If you want specific customer credit notes to be paid using payment run you
can create a payment method as 'R' as refunds so that you can select this during
the payment run for payment method 'R'. You need to make sure that this
payment is selected while posting customer entries.
3. You can do it if your vendor is also your customer in a company code. You need
to assign the customer/vendor in the master data and also enable the checkbox
as clearing with customer/vendor at master level. Neting off vendors and
customers of multiple company code is also possbile you need to do OBYA
settings for intercompany clearing. You also need to do FBZP settings as 1 paying
company code and multiple sending co. codes. Hope this helps

What are the advantages of free selection tab in automatic

payment program
In t.code F110 under the parameter tab select the payment method you want. In
the Free selection tab under the Field name select the criteria on which you want
to filter & in the value input the doc details you want to process. E.g doc # , doc
date etc. by default value fields
contains all possibilities.
While entering in the value fields follow the following tips:
* Enter whole doc number: whole 10 digit
* Enter multiple values in the correct order i.e ascending numbers

THREE WAYS TO GENERATE A PAYMENT MEDIUM FILE IN SAP

There are several ways to record a vendor invoice and payment in SAP.
Although there are several ways to post a payment, the most common of
them is the Automated Payment Program (APP, transaction code F110).
The payment process does not finish with posting of a payment document.
You need to inform the bank about your intentions too. The most common
way to do so nowadays is to transmit a payment file to the bank.
Payment file is information about payments that you want to make: account
numbers of your company and recipient (payee), amount, date, your
reference, sometimes remittance information. There are multiple file
formats in the world. Just to name a few: MT101, MT103, PAYMUL, XML-
based pain.001 and so on. Your bank may even require their own file
format, or flavour of the standard.
There are multiple ways to produce a payment file in SAP. Let’s look into
them.

Classic printing program

This method goes back to times when the most common way to transmit a
payment to the bank was a piece of paper: payment order or even a
cheque could be produced with this method. SAP no longer recommends
using this method, but all old programs are still in place. You can use them
if you want.
In order to use these classic programs for payments generated by APP,
you need to assign the program to the payment method. There is a number
of the programs, but all of their names start with RFFO* that simplifies the
search.
You then assign a program variant in the Automatic Payment Program.
This variant contains program-specific parameters that should be used for
printing. This “printing” may include the file generation.
This method of the payment file generation is not flexible, which is an
obvious downside. You have to copy the existing program into your own
namespace if you want to make any change to the standard logic.

Payment Medium Workbench

This method uses the more flexible approach to generate a payment file. If
you want to use it, you need to determine your own Payment Medium
Workbench (PMW) format and all its surroundings in transactions OBPM1
to OBPM4.
Once the format is created, you can assign it to your payment method.

PMW can produce either paper payment documents or files. In the latter
case you need to select checkbox “Payment medium without docs” and
select “File” or “XML” in the dropdown menu in transaction OBPM1.
The actual file generation logic is controlled via functional modules that you
assign to your format in transactions OBPM1 and OBPM3. The further
company code and house bank specific details are controlled via the
variant of the program SAPFPAYM that you create and assign in
transaction OBPM4.
SAP delivers a number of formats that includes globally accepted SWIFT
MT101, MT103 and so on. They are also configurable, but details of
configuration are different for each payment format. It is not subject of this
article.
However, if default logic of the system is not sufficient for your purposes,
you can change it by copying functional modules for the format creation
into your own namespace and assigning your modules in OBPM1 or
OBPM3. The latter place is preferred, although not all changes are possible
to make there.
In case of brand new format you need to develop, you can write your own
functional modules using the standard ones as example.
The downside of this method is that you still need to use ABAP to make
changes in SAP standard logic or to create your own. Even understanding
the configuration possibilities of the format may require you to read the
ABAP code.

Data Medium Exchange Engine

As you can see, PMW formats give you enough flexibility to configure your
payment method. However, if ABAP is not your strong side, there is even
more flexible and user-friendly solution for you: Data Medium Exchange
Engine.
To “switch on” the engine, you tick the checkbox “Mapping using DME
Engine” in the format settings in OBPM1. In this case, all “plug-in” points for
your functional modules in OBPM1 and OBPM3 remain in place. However,
the main configuration is now controlled by the format tree of type PAYM
that you maintain in transaction DMEE.
The DME Engine gives you a lot of flexibility to construct your own file or
amend SAP standard. There is very little need to use ABAP coding when
using DMEE, however there is still a possibility to use Functional Modules
to calculate the value of certain DMEE tree nodes.
Once you created the DMEE tree and created a variant for SAPFPAYM,
you assign it to your house bank and payment method in transaction
OBPM4. Don’t forget to assign your PMW format to the payment method
too.

APP Check Printing Configuration

Check in FBZP.
1. Payment method for Country,.
Here you check teh payment medium (ex: RFFOUS_C)
& Payment method.
2. Payment method for company code;
Here you check check printing form (Payment medium transfer) (ex:
F110_PRENUM_CHCK).