Automatic Payment Program Run in SAPFICO:

Automatic Payment Program (APP) Run in SAP FICO is one of the important functional of SAP
systems that used to issue checks automatically and receive incoming payment’s. In SAP, Automatic
payment program (APP) involves the following configuration steps.

1.Setup all company codes for payment transactions

2.Setup all paying company codes for payment transactions.

3.Setup payment methods per country for payment transactions

4.Setup payment methods per company code for payment transactions

5.Setup bank determination for payment transactions6.Setup house banks

Navigation path

SAP R/3Role Menu Automatic Payment Program Run Transaction code

FBZP

IMG menu path SPRO > IMG >

Financial Accounting

(New) > Accounts receivable(A/R) &

Accounts payable

(A/P)> Business transactions > Outgoing payments > Automatic outgoing payments > Payment
methods/banks election > setup payment program

Enter SAP T-code “FBZP” in command field and execute.

Step 1: – Setup all company codes

On customizing: maintain payment program screen, click on “All company codes” to set up all company
codes for payment transactions.
On the change view company codes overview screen, click on new entries button to set up all
company code for automatic payment transactions .On new entries the screen updates the following
details.

1.

Company Code: –

Update the company code: TK012.

Sending company code: –

Update the sending company code, this is optional field. This is the company code which is known to
the vendor as sending the payments to them.3.

Paying company code: –

Update the paying company code: TK01. This is the company code which is known to the vendor as
paying company to them.4.Choose separate payment per business area check box if you want to run
payment separately for each business area.5.Update the tolerance days for payable by which cash
discount period for the due date for net payment.6.If you want process maximum cash discount
irrespective to payment terms ,choose this option.7.If you want to make payments for special G/L
transactions like downpayment, advance to vendors, update the special G/L indicator from the given list.

Click on save button and save the configured company codes payment transactions details.
Step 2 : – Set up all paying company codes

Go back to main Automatic payment program configuration screen i.e. customizing: maintain payment
program, click on paying company codes. On change view paying company codes overview screen, click
on new entries button .On new entries screen, update the following details.

1.

Paying co.code :

– Update the payment company code: TK012.

Minimum amount for incoming payment:

Minimum amount for outgoing payment:

– Update the minimum outgoing payment: 10004.

No exchange rate difference: –

If you

.
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5.

Separate payment for each ref :

– Check this option if you want to payseparately as per invoice wise.6.

Bill/exch paymt : –

Select this option if the payment is made through bills ofexchange.7.

Form for the payment advice : –

Sender details : –

Update the details of sender that prints on form i.e. TextId, Letter header, footer, etc.

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Setting for the Bill of Exchange to be maintained when it is checked.

Click on save button and save the configured paying company codes details.

Step 3: – Set up payment methods in the country.

Go back to the main automatic payment program run screen, click on paymentmethods in country.On
change view payment methods/overview screen, click on position buttonand update country key IN and
press enter. Now the list of defined paymentmethods for country IN displays on top of the screen. To
define a newpayment method for country as per the requirements of project, click on newentries
button.On the new entries screen, update the following details.

1.

Country: –

Update the country key that you like to configure paymentmethod.2.

Pym method: –

Update the key that identifies as payment method forcountry in SAP.3.

Description: –

Update the descriptive text of payment method.4.

Payment Method: –

Choose the payment type i.e. Outgoing payments orincoming payments.5.

Payment Method classification: –

Choose the type of payment method i.e.bank transfer.6.Choose the option allowed for personal
payments if the company wants thispayment method for paying personal payments.
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7.

Posting details : –

Specify the document type for payment and clearingdocument type.

Update all the details as per the requirements of project and click on savebutton and save the configured
payment method in country details.
Step 4 : – Set up payment methods in company code

Customizing: Maintain payment program screen, click on payment methods incompany code.On change
view maintenance of company code data for a payment methodoverview screen, click on

new entries

button for maintaining the paymentmethod for company codes.On new new entries payment method
for company code screen, update thefollowing details.
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1.

Paying co. code : –

Update the paying company code: TK012.

Pymt Method : –

Update the payment method : I (IMPS)3.

Amount Limits : –

Update the minimum and maximum amount for paymenttransactions.4.

Choose this option if the company wanted tomake payment as per due date.5.

Foreign Payment/ foreign currency payments : –

Choose the option asper requirements if the organization wants to allow all types of foreigncurrencies,
foreign banks, etc.

After maintaining all the required details of payment methods for companycode, click on save button to
save the configured details.

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Step 5 : – Set up Bank Determination

1.Ranking Order 2.Bank Accounts3.Available Amounts4.Value Date5.Expenses/Charges

a.Ranking Order

On the display view bank selection screen, choose the position button andupdate your company code in
the given field. So, you’re paying company codeis displayed on top of the screen.Now choose the paying
company code “TK01” and double click on rankingorder.On change view ranking order overview screen,
click on new entries.
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On new entries rank order screen, update the following details.

PM : –

Update the paying method of the company as I

Currency: –

Update the currency as INR

Rank Order: –
Update the ranking order for making the payments bank wise:1.

House bank: –

Update the house bank key: AXISB.Click on the save button and save bank rank order details.

b.Bank Accounts

Double click on bank accounts column and click on new entries button.On new entries bank accounts
screen, update the following details.

House bank : –

Enter house bank key : AXISB

Pay.Method :

Update payment method as: I

Currency : –

Update currency key as INR.

Account ID : –

Update account ID as AXIS

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Bank subaccount: –

Update the G/L account of bank (we have created200108 for axis bank current A/C).

After maintaining all the required details, click on save button and saveconfigured bank accounts in
SAP.Double click on available amounts and click on new entries button formaintaining the amounts
details.

c. Available Amounts

Double click on available amounts column and click on new entries button.On new entries available
amounts screen, update the following details.


House bank – Update the house bank: AXISB

Account id: – Update the account id: AXIS

Days: – This is an optional configuration.

Update available for outgoing payment for the account and scheduledincoming payments. This is used
for only evaluation.

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Click on save button and save the configured details.

Step 6 : – House Banks

Here you can create house bank as per requirements of project. It providesthe detailed information of
bank for incoming and outgoing payments. Click onnew entries button and create new house banks as
perclient requirements.Refer how tocreate house banks in SAP.We have successfully configured
automatic payment program in SAP. To runautomatic payment program you must have open items in the
vendor accountwith due and the system considers to run automatic payment program in SAP.

Payment program ( F110)

I talked about the manual vendor payment process using tcodeF-53 inSAP. But there is another
transaction that allows you to post automaticpayments against open invoices. It is known as the
Automatic PaymentProgram or APP. You execute the APP using transaction

F110 in SAP

.It is important to note that APP in SAP is not only used for automaticpayments for vendors but also for
customers. It works on the basis ofhouse banks where you assign the bank GL accounts. Before
runningF110 in SAP, it is mandatory that the house bank and the otherconfigurations are complete in
tcode

FBZP
. Also, please make sure that you assign all the payment methods to thecountry for which the Automatic
Payment Program is to be run. Since APP is mostly used to process vendor payments, this tutorial is
based onthe vendor process only. So without further ado, let’s begin the tutorial.

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Step 1: Post a Vendor Invoice using FB60

To process the automatic payment for vendors, it is important to have anopen invoice for all vendors for
which you will be making the payment.I’m taking an example of only 1 vendor in this tutorial, i.e.,
Vendor300066 (ABC Suppliers) for Company Code 1000. I have posted thefollowingvendor invoice of
1,00,000 rupees.Post a Vendor Invoice As you can see, document number

201045

is a vendor invoicedocument. A credit balance of 1 Lac rupees for vendor code 300066means that I’m
liable to pay this much amount to the vendor.
Step 2: Execute F110 in SAP

Once you have an open invoice against a vendor code, it is time toexecute the Automatic Payment
Program. The tcode to run APP is

F110 in SAP

. After executing the transaction, you have to enter the Run Dateand Identification code. The run date is
a date on which you are runningthis transaction. Similarly, you can give any 5-digit identification code.For
example, I have given identification as TEST2.

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F110 in SAP: Initial Screen

Step 3: Enter the Selection Parameters

After entering the Run Date and Identification, click on the ‘

Parameter

‘tab. Enter the posting date, documents entered up to, company code,payment method, and next
payment date fields.Posting Date of 31st August 2020 means that the automatic vendorpayment
document will have this posting date. A date of 31st August2020 in the Docs Entered Up to field means
that the system will consider all the open items to this date. Please note that it is not a posting datebut
an entry date of the document.Similarly, enter the company code for which you are going to make
thepayments, payment method

for cheque, and next payment date fields.

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In the same selection screen, enter the vendor or customer accounts.Here, you can give the range of
vendor or customer accounts in caseyou are want to make the automatic payment of many sub-
ledgeraccounts at once.Considering that I’m focusing only on 1 vendor account in this example, Ihave
given the same vendor account 300066 on the selection screen.

Enter the Vendor Account

Step 4: Free Selection, Log, and Payment MediumThe next step is to enter the data in the rest of the 3
tabs. In the

FreeSelection

tab, you can enter thevendor invoice document numberagainst which you want to make the payment.
The system will considerthat document only for payment and will leave the rest of the openinvoices as it
is.

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As can be seen in the screenshot below, I haven’t filled anything in thistab as I want the system to
consider all the open invoices for payment.Free SelectionMoving on to the

Additional Log

tab, you can enable the checkboxesaccording to your requirements. The data will be displayed in the
logbased on the selections made by you on this screen.

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Additional LogIn the

Payment Medium

tab, you need to enter the variant details. Avariant contains the data related to house banks, paying
companycodes, and cheque details. If a variant has not been created, it issuggested that you create it by
entering the variant name of your choiceand then click on

Maintain Variants

.
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Enter the Variant Details

In the variant, enter the paying and sending company codes. Also, enterthe details for payment
methods, house banks, and a check lot number.The system will determine the cheque number from the
check lotnumber after executing the payment. Click on the ‘Save’ button to saveall the selection
parameters for this payment run.

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Maintain VariantStep 5: Create the Payment Proposal in F110 in SAP After saving the parameters, the
next step is to create the paymentproposal. Click on the ‘

Proposal

‘ button at the top to run the batch job.Create the Payment ProposalThe system will automatically take
the system date as the start date.Enable the checkboxes for

Start Immediately

and

Create Payment

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Medium

to start the batch job immediately and allocate a cheque number to the payment respectively.Run the
Batch Job As soon as you create the proposal, click on the Refresh or Statusbutton at the top to update
the status of the proposal. The status of thepayment run can be seen in the STATUS section. To view the
proposaldetails, click on the ‘

Display Proposal Log

‘ button.

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Display the Proposal Log

You can see the vendor invoice details in the log section. The systemwill display the vendor invoice
document that is eligible for paymentalong with the payment terms of that document and the invoice
amount.

Proposal Log

Step 6: Execute the Payment Run in F110 in SAPThe last step in the APP is to execute the payment run by
clicking on the‘Payment Run’ button at the top. Enter the same parameters as given atthe time of the
proposal run. Again, click on the Status button to updatethe status of the payment run. To display the
payment run details, clickon the

Payment

button to open the payment log.

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Execute the Payment RunIn the Payment Run log, you can display the payment documentgenerated by
the system along with the accounting entry. A paymentdocument number 202036 has been posted for
vendor 300066 withincompany code 1000. You should also be able to see the generatecheque number.

Please note that this payment document willautomatically clear the original vendor invoice.
Payment Run Log

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Cheque Number Optional Step: Display the Payment Document in FB03To display the payment
accounting document, execute the tcode FB03and enter the document details.Display Payment
DocumentThe following accounting entry should be visible.Vendor Account Dr. 1,00,000 INROutgoing
Bank GL Account Cr. 1,00,000 INR

Processing the Automatic Payment Run

Objectives

After completing this lesson, you will be able to:

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