Automatic Payments

SAP provides a standard program to run automatic payments to vendors.

Having in the system vendor invoices to be paid, you can pay them with the payment program generating checks, transfers, bill of exchange or other payment methods.

Usually the payment method is defined in the invoice or vendor. In order to print those payment forms, there are standard programs for that purpose (they are specified for each payment method in the configuration).

It is important to have configured in the system our house banks, accounts, payment methods and payment forms.

House bank (bank id) is the bank where the company code has accounts. Note that each banks account is associated to a GL account in the system (it is defined in customizing, transaction FI12).

This first block explained in the post is related to the configuration. Transaction to configure the payment program is FBZP. The configuration is done at several levels:

•  Button “All Company Codes” (paying company code, cash discount, etc).

• Button “Paying Company Codes” (specifying how the payment is done). 

• Button “Pmnt methods in country” (configuring payment method at country level). Double clicking on a specific one, you can set all the parameters, included the Payment medium program. 

• Button “Pmnt method in company code”. Double clicking on a specific one, you can set all the parameters. 

• Button “Bank determination”. The payment program will determinate the house bank to perform the payment based on this configuration. The algorithm to determinate it is the following ( if any problem found during the sequence it is shown in the log of the payment run): 
• Selection of the house bank (bank id) based on payment method and currency.
• If not found, selection of the house banks based on payment method (without currency). 
• Selection of the account id based on bank id, payment method and currency. 
• Selection of the available amount based on bank id and account id. 

This second block of the post is related to the payment run. Once the automatic payment program is correctly configured, it’s time to run the process with SAP transaction F110. You have to follow these steps:

• Parameters. In the tab “Parameters” you enter the payment parameters. You use these parameters to define what you want to pay. If you go to the main tab “Status”, you will see in green the status “Parameters have been entered”. 

• Creation of the Proposal. Once you have saved the parameters, you have to click on button “Proposal”. In the tab “Status” you'll see the status “Payment Proposal has been created”.

• Visualization of the Proposal. Clicking on button “Display Proposal” you will see the payments to be done according to the parameters entered. You can modify the proposal, but if the selection doesn't meet your expectations and you need to delete it, from tab “status”, go to menu “Edit->Proposal->Delete”. After that, if you go to menu “Edit->Parameters->Maintain Parameters” and you could start the process entering again the parameters. 

• Payments run. Once the proposal of payment is ok for you, you will run the payment clicking on button “Payment run”. This process will create payment documents and prepare the data for printing. If everything is ok, the status will be as you see in image below. Note that paying Bank account is determined by the configuration step for Bank determination. To see the payment documents created go to Edit->Payment->Payment list. 

• Printout. After creating the payments, the payment medium is created (checks, banks transfer file, etc). It’s important to know that a Variant has to be created for the payment medium (using the transaction SE38) and assigned in the tab “Printout/data medium”. Also note that the payment media printout could be generate automatically during the payment run, or clicking on the proper button.

What is a Vendor Invoice?

Following with basic financial concepts, what is a Vendor Invoice?

Easy, a Vendor Invoice is an accounting document.

Yes, but what it represents? It’s a “request” for payment of whichever thing we received from a provider.

There are two types of Vendor Invoices:

- Non-purchase order based invoices.

In this case, we have not any purchase order created previously. We have to pay to the provider for some service, for example the rent. The invoice is posted directly in General Ledger, debiting in the expense account and crediting in the vendor Account.

SAP Transaction to create the Non-PO-Based Invoice is FB60 or following the path:

SAP Menu->Accounting->Financial Accounting->Accounts Payable->Document Entry->FB60 – Invoice

Before save (post) the invoice you can simulate with button ‘Simulate’.

- Purchase order based invoices.

In this case, we have a previous purchase order requesting some good or services. Also, that service or good has been received against the purchasing order creating the “Good Receipt” document in MM module, debiting in the Inventory Account and Crediting GR/IR clearing account (this account is used to post goods/services which have not been invoiced.

Once we have received the goods/services we can create the Vendor Invoice referencing the purchase order previously created, debiting the GR/IR clearing account and crediting the Vendor Account.

SAP transaction to create the PO-Based Invoice is MIRO or following the path: 

SAP Menu->Logistics->Material Management->Logistics Invoice Verification->Document Entry->MIRO-Enter Invoice

When you enter de invoice data including the purchase order and post the document, the invoice number document is created. If that document has the status “Blocked for payment”, it is blocked for payment and has to be released before proceed with the payment.

That blocking is performed by the invoice verification process, consisting on match the price and quantity of PO, GR and Invoice (taking into account tolerances). If they do not match, SAP will block the invoice for payment.

To unblock the invoice you can use SAP transaction MRBR or following the path:

SAP Menu->Logistics->Material Management->Logistics Invoice Verification->Further Processing->MRBR-Release Blocked Invoices

Entering the proper data you will able to select the correct invoice to unblock. With the invoice selected, click on the flag button to release it. The status will change to “Released”.