The automatic Payment Program or APP process in SAP FICO enables you to clear open items between customers and vendors. It further makes inter-company payments, processes both domestic and foreign payments and block payments, etc.
You can use the SAP APP (Automatic Payment Program) to handle both outgoing and incoming payments automatically.
The automatic payment program determines what you have to pay; when you have to pay; and how you should pay, through the payment rules that you define in the payment program configuration.
Furthermore, in SAP FICO APP process can group several open items that are to be paid into a single payment, if required.
The rules determine the due dates for the payments, and the payees to whom you need to make the payment. Further, it also determines house banks from which you should process the payment and the appropriate payment methods relevant to the payee or country.
Steps to setup All Company Code
IMG => Financial Accounting (New) => Accounts Receivable and Accounts Payable => Business Transactions => Outgoing Payments => Automatic Outgoing Payments => Payment Method/Bank Selection for Payment Program Prepare => Setup All Company Codes for Payment Transaction
It is the company code that processes payment transactions centrally for several company codes. Consequently, you assign it to each of the company codes participating in the Payment Program.
The system adds up the number of days specified here when it determines the cash discount periods and the due date for net payment. This is to say, if you enter 03 in this field for an invoice due on 25.01.2020, it will not be paid until 28.01.2020
Steps to setup Paying Company Code
IMG => Financial Accounting (New) => Accounts Receivable and Accounts Payable => Business Transactions => Outgoing Payments => Automatic Outgoing Payments= > Payment Method/Bank Selection for Payment Program Prepare => Setup Paying Company Codes for Payment Transactions T Code- OBZ1
Scroll down and expand Forms and Sender Details to configure these details. For Forms, you may use either SAP Scripts or PDF. Then, finally, select the appropriate form from the dropdown list. This is for sender details, providing a header, Footer, signature etc.
As part of the APP process in SAP FICO, A payment method specifies how you have to make the payment. Popular payment methods include checks, bills of exchange and bank transfers.
Noteworthy, a payment method helps when you enter the payment in the master record of a business partner, line items or payment run parameter.
Several country-specific payment methods (check, ACH, Bank Transfer, etc.) have already been configured in the standard system. Thus, enabling you to use any or all of them for company codes.
Steps to setup payment methods per country
IMG => Financial Accounting (New) => Accounts Receivable and Accounts Payable => Business Transactions => Outgoing Payments => Automatic Outgoing Payments => Payment Method/Bank Selection for Payment Program Prepare => Setup Payment Methods Per country for Payment Transactions or T. Code- OBZ3
For each country-specific payment method, you specify whether it is meant for incoming or outgoing payments. Likewise, you can also use it for paying your document type to be used for payment and clearing. Further which payment program is to be used (RFFOUS_S) for paying through check etc?
Besides identifying the payment method that you use in your company codes, you also need to stipulate the conditions for a particular payment method’s usage.
You determine the minimum and maximum amount limits for each of the payment methods and specify the grouping criteria for the payment items. Additionally, you make specifications for foreign currency payments, and payment forms per payment method and optimise bank selection.
Steps to set up payment method per company
IMG => Financial Accounting (New) => Accounts Receivable and Accounts Payable => Business Transactions => Outgoing Payments => Automatic Outgoing Payments => Payment Method/Bank Selection for Payment Program Prepare => Setup payment Methods per Company Code for Payment Transactions T Code-OBZ4
Related: Scenarios in SAP GL Accounting
Also Read: Cash Management in SAP S/4HANA Finance
You can configure the system in the line item to determine the bank from the customer and vendor master records or maintain the bank to be used for payments.
The following settings are required:
Steps to setup bank determination
IMG => Financial Accounting (New) => Accounts Receivable and Accounts Payable => Business Transactions => Outgoing Payments => Automatic Outgoing Payments => Payment Method/Bank Selection for Payment Program Prepare => Setup Bank Determination for the payment transaction
We have already seen how a lag between the posting date and the value date works. It may be by maintaining the Days to Value Date in Payment configuration settings. You may also define a rule for each payment transaction at a house bank to arrive at the value date automatically. Use the T Code- OBBA.
Steps to define value date rules
IMG => Financial Accounting (New) => Accounts Receivable and Accounts Payable => Business TransactionsàOutgoing Payments => Automatic Outgoing Payments => Payment Method/Bank Selection for Payment Program Prepare => Define Value Date Rules to maintain the required settings
When you will configure this, the system adds or subtract the specified days. The days are a derivation from the reference date (document date or posting date).
Consequently, the system can check the final date with a factory calendar to decide whether it is a working day. It does so before finally deciding the value date for that transaction.
You can generate payment media using either the classic payment medium program or payment Medium Workbench. In case, if you don’t want to use the standard form provided by SAP, use the Form Painter (T-code- SE71).
Likewise, use the form to copy a standard payment form and make the required change. Even if you don’t want to create your form, you need to specify the standard texts. The texts that you use for the letter header, letter footer and sending address in the letter window per company code.
APP process in SAP FICO is one of the important business transactions for SAP Accounts Payable. Similarly, there are many types of business transactions for SAP FI Accounts payable. These are Maintain Terms of Payments, Define Cash Discount, Release of Payment & more. Certainly, APP is the most important among all business transactions.
Watch Video: Automatic Payment Program Configuration
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