Outgoing Payment Process in SAP
Outgoing Payment is the process of making outgoing payment to the vendors. This SAP process covers both manual and automatic payment.
Common Business Requirement
After invoices have been posted in SAP system, payment should be made timely so as to realize cash discounts and avoid late payment interest. In general, the company makes payments to vendors (including staff advances where staff advances are posted in SAP) via one of the following payment methods:
- Cheque
- Bank Transfer
- Electronic Bank Transfer
- Demand Draft
- Cash
Generally, countries will base the decision on which payment method to use depending on whether the vendor is a local or foreign vendor.
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SAP Account Payable – Block/Unblock Vendor Invoice
This refers to the process of manually blocking/unblocking vendor invoices for payment process in SAP system.
Common Business Requirement
Prior to making payment in SAP, invoices should be reviewed to check if they should indeed be paid. For example, if there is an unresolved dispute with the vendor on the amount payable of an invoice which has been posted some time ago, recent invoices should be immediately blocked for payment after posting in SAP system. After the dispute has been resolved, the invoices should be unblocked for payment.
For PO invoices, invoices are automatically blocked in SAP for payment if tolerance limit is exceeded. Unblocking of PO invoices blocked due to variance should be done using via the Release Blocked Invoices function in SAP Materials Management (SAP MM) module.
When editing the proposal list via F110 transaction, invoices should also be checked if they should be blocked/ unblocked for payment.
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SAP Account Payable – Vendor Credit Memo Entry
Common Business Requirement to the process of processing non-PO vendor credit memos.
Non-PO credit memo will be posted in the SAP Account Payable (AP) module. Depending on the standard operating procedure within the country, the credit memo will first be parked and only posted upon approval/ review, or directly posted.
If there are many items on the credit memo, the fast entry function provided in SAP should be used.
Design
Posting of credit memo creates an open debit item on the vendor account. Credit memo offsets the amount payable to the vendor and both the invoice and credit memo will be cleared during payment process.
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SAP Account Payable – Vendor Invoice Entry
Common Business Requirement in SAP Account Payable
Non-PO invoices will be posted via the SAP AP module in SAP Financial Accounting. Typically, non-PO invoices arise due to non-stock and non-production item purchases e.g. utilities and telephone bills. It is possible that a goods receipt is performed without reference to PO (e.g. returnable packaging material). In this case, if the vendor invoices company, the invoice will be posted as a non-PO invoice in the SAP AP module.
For non-PO invoice, the invoice processor needs to manually verify that the invoice has been approved by authorised personnel in the requesting department and that relevant supporting documents have been provided.
Depending on the standard operating procedure within the country, invoices will first be parked, and only posted upon approval/review, or directly posted. If there are many items on the invoice, the fast entry function should be used.
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SAP Business Blueprint – Accounts Payable
This SAP business blueprint describes the common business requirements, process and design for SAP Accout Payable module. The objective is to use the standards across implementations in various countries/regions.
Basically, the processes covered within SAP Accounts Payable (AP) blueprint are:-
- Vendor Invoice Entry
- Vendor Credit Memo Entry
- Block/Unblock Vendor Invoice
- Outgoing Payment
- Down Payment to Vendor
- Down Payment to Staff
- Clear Accounts Payable
- Accounts Payable Interest Calculation
- Correspondence with Vendors
- Tax
- Accounts Payable Reporting
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AP Invoices Process in SAP
Vendor invoices will be entered into the SAP system. This will trigger a three way match between the Purchase
order, goods receipt and vendor invoice.
- If a three way match exists, the invoice will be ready for payment automatically thru SAP system.
- If a three way match does not exist, the vendor invoice will be blocked for payment until the discrepancy
can be resolved.
There are two types of invoices will be received in SAP system:
- Direct invoices – Invoice that exist without a purchase order (PO) or goods receipts (GR) via FB60 transaction
- Purchase order invoices – Invoice that is received from a PO via MIRO transaction
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Reversal of SAP Documents
Any SAP Documents that have been posted in error or contain amounts, accounts or account assignments (cost centers, internal orders) that are incorrect can be reversed easily. SAP provides functionality to automatically generate a reversal SAP document when the user specifies the original SAP document.
Remember that reversal documents are unable to posted to a period that is already closed and the financial statements have already been generated.
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