SAP Business : Automatic Payment Program

December 3, 2009 by mySAP
Filed under: Account Payable Process

SAP Business Process: Automatic Payment Program

The automatic payment program in SAP selects appropriate invoices to be paid based on the following parameters

Documents entered up to. The program selects invoices entered in SAP system with entry date up to the date specified in this field.
Next payment run date. The program selects invoices in SAP system which will be overdue or incur lost cash discounts if paid on the date specified in this field.

When executing the automatic payment program (F110 transaction), a proposal run must always be carried out in SAP system first. The proposal list will sometimes include exceptions.

Common exceptions are:

SAP Invoice contains payment block. To pay this invoice, remove the payment block when editing the proposal list (unless the payment block is one which cannot be edited during payment proposal) or remove payment block via FB02 for each SAP invoice.
Payment method in vendor master/invoice is different from the one specified in the payment program parameter. To pay this invoice, allocate the payment method in the parameter of the payment run to this invoice while editing the proposal list.
Vendor master does not contain information specified as mandatory in the payment method in the parameter of the SAP payment program.For example, depending on the payment method configuration for the country, certain fields such as city or PO Box must be populated in the vendor master. In this case, delete the proposal run, make the necessary changes in the vendor master and execute the proposal run again.

Typically, payment program pays due invoices in full. To cater for partial payment via automatic payment program, payment request will be used (optional). Down payments to staff and vendor can also be made via the automatic payment program if down payment request was posted.

If foreign currency invoice is paid via automatic payment run, the relevant exchange rate type should be selected in the payment run parameter. Exchange rate gain/loss on making the payment will be automatically posted to the relevant profit and loss account based on the reconciliation account of the vendor.

The payment method specified in the parameter of the payment program determines the bank account and the GL account used to make the payment. Also, depending on the payment method, cheques, other forms and payment files will be generated.

The due invoices in SAP for the same vendor in the same payment run will be cleared by a single payment document.

After automatic payment run, the remittance advices can be generated automatically for each vendor and printed or sent via email. For email option, Acrobat Reader (PDF) file containing remittance information is created and attached to email.

Alternative ways to make payment: