SAP Accounts

Receivable and Accounts

Payable
Configuration
SAP ECC 6.0
INTRODUCTION

The AR and AP acts as a sub ledger to FI- GL for managing the balances of
Customers and Vendors. The AR and AP components store all the
information and balance details for each customer and vendor.

Data is updated from AR and AP in real time to the FI-GL module. Most of the
Data in AP module is obtained from the Materials Management (MM) module.
Similarly most of the Data in AR module is obtained from the Sales and
Distribution module.

Here we will see the configuration for AR and AP and also cover the
configuration for Automatic payment program.
1) Accounts Receivable and Accounts Payable

1.1 Customer Accounts

1.1.1 Master Records

1.1.1.1 Define Account Groups with Screen Layout (Customers)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Define Account Groups with Screen Layout (Customers)

When creating a customer account, you must specify an account group.

You use the account group to determine:

Ø the interval for the account numbers

Ø whether the number is assigned internally by the system or externally by

the user (type of number assignment)

Ø whether it is a one-time account

Ø which fields are ready for input or must be filled when creating and
changing master records (field status)

Click on

Update the following: -

Click on Save
Double Click
Double Click
Click twice
Double Click
Double Click

Change Reconciliation account and sort key from Opt entry to Req. entry

Click on

Change Terms of payment from Opt. Entry to Req. entry

Click on Save

1.1.1.2 Define Screen Layout per Company Code (Customers)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Define Screen Layout per Company Code (Customers)

Here in this step you specify, depending on the company code, which company
code-dependent master record fields
 Ø are ready for input
Ø require an entry Ø
are hidden.

This specification is linked to the field status of the account group and a
specification for the transaction. By means of the link, you can see which status
the fields have on the entry screen for master data. In this case, the fields take
on the status which has the highest priority. Hiding a field has the highest priority,
followed by a display field, a required field and then an optional field:

The entry under the company code * applies to the company codes which are
not explicitly entered in the table. You should not delete this entry.

Normally no configuration is required except in exceptional cases. For

example, if the company codes are in different countries or some company
codes do not use automatic payment processing for customers. If fields are to
have an alternative status depending on the company code, specify the
company code and determine the status of the fields.

We will not configure anything here since we do not want field status differently
based on company codes.

1.1.1.3 Define Screen Layout per Activity (Customers)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Define Screen Layout per Activity (Customers)

In this activity you specify, depending on the transactions (display, create,

change) for customer master data, which master record fields
 • are ready for input •
require an entry • are
hidden.

This specification is linked with the field status of the account group and the
company code-dependent specification. By means of the link, you can see
which status the fields have on the entry screen for master data. In this case,
the fields take on the status which has the highest priority. Hiding a field has the
highest priority, followed by a display field, a required field and then an optional
field:

This, particular configuration is required if the fields are to be filled when creating
and are not to be changed via the change transaction. This is required for
reconciliation account. The reconciliation account updated during the create
mode should not be changed later on in the change mode. This will create a lot
of problem. In the change mode the field should not be available for change. It
should be only in the display mode.

Let us configure that.

Double click
Double click

Double click

Change the reconciliation account from Req entry to display

Click on

Click

Double click
Double click

Double click and change reconciliation account from

optional entry to display
Click on

1.1.1.4 Enter Accounting Clerk Identification Code for Customers

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Enter Accounting Clerk Identification Code for Customers

In this step, you define the names of the accounting clerks under a name
identification code. You enter the identification code in the customer master
records which the accounting clerk supervises. You can use this information for
evaluations and for correspondence.
Click on

Update the following:-

Click on Save
1.1.1.5 Define Industries

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Define Industries

In this activity you define the industries you require. You can group together your
customers by industry. The industry field is located in the general area of the
customer’s master record. You specify what industry a business partner belongs
to by entering an industry key in its master record. You can use this information
for evaluations, for example, to create a customer list according to industry.

We will not configure anything here. In case you want to configure click on new
entries, enter a 3 digit code and description.
1.1.1.6 Create Number Ranges for Customer Accounts

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Create Number Ranges for Customer Accounts

In this activity you create the number ranges for the customer accounts. To do
this, specify the following under a two-character key:
Ø A number interval from which the account number for the customer
accounts is to be selected
Ø The type of number assignment (internal or external number
assignment)

In this screen you will notice that there is no company code selection. The
customer number is created at a client level. This means that the same customer
number can be extended by more than one company code.

Click on
Click on
Click

Click on Save

To Transport

When we transport in the above manner all intervals for the selected number
range object are deleted in the target system first. After the import, only the
intervals you export are present. The number statuses are imported with their
values at the time of export.
Dependent tables are not transported or converted

It is advisable that the number ranges are manually maintained on the

respective system (quality, production).

1.1.1.7 Assign Number Ranges to Customer Account Groups

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Preparations for Creating Customer
Master Data à Assign Number Ranges to Customer Account Groups

In this step you assign the number ranges you created in the preceding step to
the account groups for customers. You can use one number range for several
account groups.
We will assign number range Z9 created to account Z910.
Update the following:-

Click on Save

1.1.1.8 Delete Customer Master Data (OBR2)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àCustomer Accounts à Master Data à Delete Customer Master Data
(OBR2)

You can delete the master records for customers by using this program. This
program is to be used only during test phase.
The company code for which master records are to be deleted, should not be
flagged as productive. Only master records for accounts which do not have any
transaction data may be deleted.
The general customer master data is only deleted for customers who are not
also created as customers in Sales and Distribution.

You can use transaction code OBR2 in the main SAP Easy Access menu.
1.2 Vendor Accounts

1.2.1 Master Records

1.2.1.1 Define Account Groups with Screen Layout (Vendors)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Preparations for Creating Vendor
Master Data à Define Account Groups with Screen Layout (Vendors)

In this step you specify the account groups for vendors.

Via the account group you determine

• The interval for the account numbers

• Whether the number is assigned internally by the system or externally by

the user (type of number assignment)
 • Whether it is a one-time account

• Which fields are ready for input or must be filled when creating and
changing master Data (field status)

Click on

Update the following: -

Click on Save
Double Click

Double Click
Make Reconciliation account and sort key as Req. entry as follows

Click on

Make Terms of payment Req. entry

Click on Save

1.2.1.2 Define Screen Layout per Company Code (Vendors)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Preparations for Creating Vendor
Master Data à Define Screen Layout per Company Code (Vendors)

Here you determine, depending on the company code, which company code-
dependent master record fields

• are ready for input

 • require an entry •
are hidden.

This specification is linked to the field status of the account group and a
specification for the transaction. By means of the link, you can see which status
the fields have on the entry screen for master data. In this case, the fields take
on the status which has the highest priority. Hiding a field has the highest priority,
followed by a display field, a required field and then an optional field:

The entry under the company code * applies to the company codes which are
not explicitly entered in the table. You should not delete this entry.

Normally no configuration is required except in exceptional cases. For

example, if the company codes are in different countries or some company
codes do not use automatic payment processing for customers. If fields are to
have an alternative status depending on the company code, specify the
company code and determine the status of the fields.

We will not configure anything here since we do not want field status differently
based on company codes.
1.2.1.3 Define Screen Layout per Activity (Vendors)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Preparations for Creating Vendor
Master Data à Define Screen Layout per Activity (Vendors)

In this activity you specify, depending on the transactions (display, create,

change) for customer master data, which master record fields

• are ready for input

• require an entry •
are hidden.

This specification is linked with the field status of the account group and the
company code-dependent specification. By means of the link, you can see
which status the fields have on the entry screen for master data. In this case,
the fields take on the status which has the highest priority. Hiding a field has the
highest priority, followed by a display field, a required field and then an optional
field:

This configuration is required if the fields are to be filled when creating and are
not to be changed via the change transaction. This is required for reconciliation
account. The reconciliation account updated during the create mode should not
be changed later on in the change mode. This will create a lot of problem. In the
change mode the field should not be available for change. It should be only in
the display mode.

Let us configure that.

Double click

Double click

Double click
Change the Reconciliation account from Opt. Entry to Display
Click on

Similarly also make the Reconciliation account as display in Change Vendor

(centrally activity).

Double click
Double click

Double click

Change the Reconciliation account from Opt. entry to Display

Click on

1.2.1.4 Define Accounting Clerks

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Preparations for Creating Vendor
Master Data à Define Accounting Clerks

In this step, you define the names of the accounting clerks under a name
identification code. You enter the identification code in the vendor master Data
which the accounting clerk supervises. You can use this information for
evaluations and for correspondence.

Click on
Update the following:-

Click on Save

1.2.1.5 Create Number Ranges for Vendor Accounts

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Preparations for Creating Vendor
Master Data à Create Number Ranges for Vendor Accounts

Here you create the number ranges for vendor accounts. You specify whether
the number range is internal or external. Internal number range means the
system allots the number automatically from the number range. External number
range means the system expects the user to allot the number from the specified
range.

In this screen you will notice that there is no company code selection. The
Vendor number is created at a client level. This means that the same vendor
number can be extended by more than one company code.
Click on
Click on

Update the following:-

Click on

Click on Save

You get the following message

1.2.1.6 Assign Number Ranges to Vendor Account Groups

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Preparations for Creating Vendor
Master Data à Assign Number Ranges to Vendor Account Groups

Assign number range Z9 to account group Z910

Update the following:-

Click on Save

1.2.1.7 Delete Vendor Master Data (OBR2)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

àVendor Accounts à Master Dataà Delete Vendor Master Data

Here you can delete the master Data for vendors. You can use this program in
the test phase. The company code, for which master Data are to be deleted,
should not be flagged as productive. Only master Data for accounts which do not
have any transaction data may be deleted.
The general vendor master data is only deleted for vendors who are not also
created as vendors in Purchasing.
1.3 Business Transactions

1.3.1 Incoming Invoices/Credit Memos

1.3.1.1 Maintain Terms of Payment

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Incoming Invoices/Credit Memos à Maintain
Terms of Payment

Here you can define rules which are stored under a four-character key called as
payment term. You assign this terms of payment to the vendors master record.
The payment term is proposed when entering a document to the vendor
account.
You can use the same key for the terms of payment for both customers and
vendors who have the same payment terms. SAP recommends, however, that
you use different terms of payment keys for customers and vendors and limit the
permitted account type correspondingly within the terms of payment.

Let us configure 2 payment terms.

1) Payable to vendor 60 days. If paid within 30 days 2 % cash discount

can be availed.
2) Receivable from customer within 45 days. If paid within 15 days 2 %
cash discount will be paid.

Generally document date is selected as the default baseline date. Document

date is the invoice date.

You configure both the payment terms for customers and vendor using the same
configuration path.
Click on
Click on Save

Let us configure another payment term.

Click

Now we will configure payment term for customer. Click

on
Update the following:-

Click on Save

1.3.1.2 Define Terms of Payment for Installment Payments

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Incoming Invoices/Credit Memos à Define
Terms of Payment for Installment Payments

Here you can configure whether an invoice amount is to be divided into partial
amounts with different due dates. For this, you must specify the amount of the
holdback/retainage in percent and the terms of payment for each holdback/
retainage payment. If you then post an invoice with terms of holdback/
retainage payment, the system generates the corresponding number of line
items due to your specifications for the holdback/retainage.

We want to create a Installment payment key where 60 % of the amount is

payable to vendor within 90 days and the balance 40 % in 120 days.
Let us create 3 payment terms (keys) using configuration path in step 1.3.1.1

The Installment payment tick is very important.

Click on Save

Click on
Click on Save

Click on
Click on Save

Now link all the 3 keys together using the above configuration path. Click on

Update the following: -

Take a drop down in field payment terms

Double Click Z912

Update the following:-

Click on Save

1.3.1.3 Define Cash Discount Base for Incoming Invoices

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Incoming Invoices/Credit Memos à Define
Cash Discount Base for Incoming Invoices

Here we define whether the tax amount is taken into consideration in the base
amount for calculating the cash discount amount. This specification is per
company code.

We do not want the cash discount base to be net; hence we will not configure
this.
1.3.2 Outgoing Payments

1.3.2.1 Outgoing Payments Global Settings 1.3.2.1.1

Define Accounts for Cash Discount Taken

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Outgoing Payments
Global Settings à Define Accounts for Cash Discount Taken

Here you define the account numbers of your cash discount received
accounts. The system posts the cash discount amount to these accounts when
clearing open items in vendors.
You can specify tax code also.

Update the following: -

Click on Save

827110 is a cash discount received account

Click on Save

1.3.2.1.3 Define Accounts for Exchange Rate Differences (OB09)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable
à Business Transactions à Outgoing Paymentsà Outgoing Payments
Global Settings à Define Accounts for Exchange Rate Differences

The configuration procedure is same for both customer and vendor. Which
means you can use the same path to maintain the customer and vendor for
exchange rate differences.

Update the following:-

Click on

Here you will enter the GL code for Accounts receivable or Accounts Payable
(the reconciliation account). You can enter different GL codes for each currency
code and currency type. Alternatively if you do not want different GL codes for
each currency you can keep them blank
119020 is the GL code for Account Receivables trade 3rd parties Loss:
Here you enter the GL code for exchange loss, which is realized Gain:
Here you enter the GL code for exchange gain, which is realized.

Val. loss 1: Here you enter the GL code for unrealized exchange Loss on
revaluation of open items i.e. accounts receivable and accounts payable

Val. gain 1: Here you enter the GL code for unrealized exchange gain on
revaluation of open items i.e. accounts receivable and accounts payable

Bal.sheet adj.1 : Here you enter the GL code to which the receivable and
payables adjustment is posted during foreign currency valuation of open items.

The SAP System supports two valuation areas in parallel. This account is used
during valuation of the first valuation area.
The first valuation area reflects the local view of the Company code; the second
valuation area takes the corporate policy for the valuation into consideration.

Click on

Similarly you can configure exchange rate difference for account payable.

213320 is accounts payable trade third parties

Click on

Click on
Click
1.3.2.1.4 Define Accounts for Rounding Differences

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Outgoing Paymentsà Outgoing Payments
Global Settings à Define Account for Rounding Differences

This configuration is valid for both customers and vendors. Update

the following:-
Click on Save

Click on

Update the following:-

Click on Save

Update the following:-

Click on Save
1.3.2.1.5 Define Accounts for Bank Charges (Vendors)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactionsà Outgoing Payments à Outgoing Payments
Global Settings à Define Accounts for Bank Charges (Vendors)

This configuration is valid for both customers and vendors.

Here you define the account numbers of your bank charges accounts. The
system posts the charges amount you specify for a bank item when settling
payment to these accounts. The bank charges accounts must be defined as
relevant to cash flow.

Double Click

Update following:-

Update following:-
470103 is Bank charges account

Click on Save

1.3.2.1.6 Define Payment Block Reasons

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business TransactionsàOutgoing Paymentsà Outgoing Payments Global
Settings à Payment Block Reasons à Define Payment Block Reasons

Using payment blocking reasons, you can differentiate why invoices are to be
blocked for payment.

For each block indicator, you must decide whether: •

Changes are allowed in the payment proposal.

If the indicator is not set, the reason for blocking cannot be set nor
removed when a payment proposal is processed.

• Documents defined with the block key are also not to be cleared during
manual payment entry.

Payment blocking reasons are valid for all company codes. By using the reasons
for payment blocking, you can also prevent items from being processed
manually with the clearing procedures "Incoming payment" and "Outgoing
payment". You define a blocking reason to do this and mark it accordingly. Such
items can always be transferred or reversed.

You can configure Payment block reasons as required by you.

1.3.2.1.7 Define Default Values for Payment Block

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Outgoing Payments
Global Settings à Payment Block Reasons à Define Default Values for
Payment Block

Here you can change (based on the payment terms) the blocking key value that
is proposed as a default when entering postings to customer accounts and
vendor accounts.
1.3.2.2 Manual outgoing Payments
1.3.2.2.1 Define Tolerances (Vendors)

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments àManual Outgoing
Payments à Define Tolerances (Vendors)

This configuration setting is valid for both customers and vendors. Here you
specify the tolerances for vendors. These tolerances are used for dealing with
differences in payment and residual items which can occur during payment
settlement. Specify the tolerances under one or more tolerance
groups. Allocate a tolerance group to each vendor via the master record. For
each tolerance group, specify the following:

• Tolerances up to which differences in payment are posted

automatically to expense or revenue accounts when clearing open items

• The handling of the terms of payment for residual items, if they are to be
posted during clearing

When clearing, the lower limit for the customer specifications and employee
group specifications are taken. Employee tolerance is configured in the FI GL
module. The tolerance needs to be assigned to the vendor master.

We are configuring a blank tolerance group

The permitted payment difference configured for gain and loss is 100 INR or 5 %
whichever is lower.
Click on
Update the following: -

Click on Save

1.3.2.2.2 Define Reason Codes (Manual Outgoing Payments)

IMG à Financial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Manual Outgoing
Payments à Overpayment/Underpayment à Define Reason Codes (Manual
Outgoing Payments)
Here you define reason codes, per company code, for handling payment
differences in the form of

• Residual items

• Partial payments •
Postings on account

Reason codes helps in giving information in a structured manner, if the cash

discount period was exceeded or if cash discount was taken when net payment
was due, if the customer paid short and so on.

Per reason code, you determine:

• In which company code it is valid

• Which correspondence type (payment notice to the customer) is

connected to it

• Short text and long text of the reason code

There are 3 indicators available:-

Charge of difference via separate account:-

Indicator that payment differences with this reason code are charged off via a
separate G/L account. The account is specified in the configuration menu
depending on the reason code.

Indicator: Disputed item:-

Indicator which should cause a disputed item from payment differences with this
reason code during residual item formation. Disputed items do not raise the total
receivables for a customer in the framework of the credit management
program.

Indicator: Do not copy text:-

If you set this indicator, the text for the reason code is not copied into the
segment text of the residual item or the partial payment. Set the indicator if you
want to enter the segment text manually.

Indicator: Do not consider tol. limit for diff to payment advice note item
Update the following: -

Click on
Update the following:-

Click on Save

We will create one more reason code to be charged off to a different account

Click on

Update the following:-

Click on

1.3.2.2.3 Define Accounts for Payment Differences (Manual Outgoing Payment)

IMG à Financial Accounting àAccounts Receivable and Accounts Payable

à Business Transactionsà Outgoing Paymentsà Manual Outgoing
Payments à Overpayment/Underpayment à Define Accounts for Payment
Differences (Manual Outgoing Payment)

This configuration is valid for both customers and vendors.

Here you set the account determination for the reason codes for which payment
differences are charged off via a separate G/L account. You have defined
reason codes in the earlier step and determined whether an
outstanding receivable is to be set for the customer or whether the difference is
to be charged off for each reason code.

Update the following:-

Update the following:-

Click on
Click

Update the following:-

Click on

1.3.2.3 Automatic Outgoing Payments

1.3.2.3.1 Set Up All Company Codes for Payment Transactions

IMG à Financial Accounting à Accounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Automatic Outgoing
Payments à Payment Method/Bank Selection for Payment Program à Set
Up All Company Codes for Payment Transactions
Here you make specifications for all company codes involved in payment
transactions.
For each company code, you make the following specifications:

• Paying company code

You assign a paying company code to each company code. This means
that you can have one company code process payment transactions
centrally for several company codes.

• Cash discount and tolerance

The payment program uses these entries to determine the cash

discount strategy for the company code.

• Special G/L transactions

Specify which special G/L transactions are to be settled for customers

and vendors.
F = Down payment request
P = Payment request
A = Down payment on current assets

Click on

Update the following:-

Click on

1.3.2.3.2 Set Up Paying Company Codes for Payment Transactions

IMG à Financial Accounting à Accounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Automatic Outgoing
Payments à Payment Method/Bank Selection for Payment Program à Set
Up Paying Company Codes for Payment Transactions

Here you make the following specifications for the paying company codes: Ø
Data for controlling the payment program
 Here we specify the minimum amount for which an incoming (100 INR) or
outgoing payment (1000 INR) is created.
If you do not want exchange rate difference to be generated when the
payment is in foreign currency you need to select the parameter. If you
want to make separate payment for each reference you need to select
the parameter.

Ø Specifications for paying with bills of exchange

You can show or hide the settings for paying with bills of exchange.

Ø Forms and sender details for advice notes and EDI accompanying sheets

If you wish to print payment advice notes or an EDI accompanying sheet,

specify the form name. Specify also the SAPscript text modules that
contain details about the sender that are to be printed on the payment
advice note. You can go directly from this transaction to the transaction
for editing forms and text modules.

Click on and update the following fields:-

Click on

Take a drop down in the field Form for the payment advice
Click
Click
Click

Similarly take a a drop down or press function key F4 in the field

EDI accompanying sheet form

Select

Click on
Update the following:-

Click on

1.3.2.3.3 Set Up Payment Methods per Country for Payment Transactions

IMG à Financial Accounting à Accounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Automatic Outgoing
Payments à Payment Method/Bank Selection for Payment Program à Set
Up Payment Methods per Country for Payment Transactions

Here you specify which payment methods are to be used in each country.
The following parameters are entered:-
1) whether it is an outgoing payment or incoming payment
2) payment classification - check, bank transfer
3) What master data specification required - address required, bank
details required etc.
4) Document type is attached
5) The payment program name is attached.
6) Which currencies are to be permitted?

Ensure that the payment methods to be used for paying the open items of a
business partner have been entered in the appropriate customer or vendor
master record. To get a list of payment media programs, use transaction code
SA38 and enter RFFO*. Click on Utilities à Find program à Execute.

Click on and update the following

In case there in no entry found for country IN you will have to manually create
by clicking new entries

Click on

Update the following:-

Click to scroll down

Update the following:-

Click on
Click on

Update the following:-

Click on

In case of Bank transfers (E- Banking) we will create payment method is T (E-
banking)

Click on

Update the following:-

Click on to scroll down

Click on and click on

Click on
Click the Save
button. 1.3.2.3.4 Set Up Payment Methods per Company
code for Payment Transactions

IMG à Financial Accounting à Accounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Automatic Outgoing
Payments à Payment Method/Bank Selection for Payment Program à Set
Up Payment Methods per Company Code for Payment Transactions

Here you specify which payment methods can be used per company code and
determine the conditions under which a payment method should be used.

ü Specifications for grouping items for payment (such as single payment for
marked items)
ü Specifications for foreign/foreign currency payments

If you specify that the payment method can also be used for foreign
currencies, all currencies are permitted.
ü Specifications for optimizing bank selection

You can optimize either by bank groups or by postal codes. If you

optimize by bank groups, money is transferred from the house bank to
the business partner's bank in the shortest possible time. For this to be
possible, you assign all banks in the master Data to a bank group defined
by you.
If you optimize by postal codes, the house bank selection is determined
by the business partner's domicile. If you select the "Optimization by
postal codes" field, you can go directly to the activity for assigning house
banks to an interval of postal codes.

ü Specifications for the form to be used for the payment medium

ü Specifications for issuing payment advice notes

Depending on the space available on the payment medium form for

information about the note to payee, you have the following options:

•Ιf unlimited space is available, you do not need to print payment

advice notes (for checks, for example), but can do so if desired.

•Ιf there is no space available, a payment advice note containing all the
information about the purpose of payment is always printed (for bills of
exchange, for example).

•Ιf only limited space is available and there is therefore a risk that the space
will not be sufficient, you can choose from the following options:

v You can have the system create a payment advice note

containing the information about the note to payee.

If a payment advice note is to be created every time, select

"Always payment advice". The note to payee is then printed on
both the form (so far as the number of lines selected on the form
allow) and the payment advice note. If insufficient space is
available, a payment advice note indicator is printed on the
payment medium.
A payment advice note can only be created if the note to payee
information does not fit into the available space. Select Payment
advice after X lines.

v You can have the system distribute the items between several
forms. To do so, select No payment advice and Distribute items,
XX lines per payment.
 v You can have the payment program determine another
payment method if insufficient space is available. To do so, choose
No payment advice and Payment method valid to xx lines.

We are configuring payment method check for company code 9100, the
minimum amount for which a check should be raised is 1000 INR and the
maximum amount is 9999,999,999 INR. We have selected SAP standard check
layout form F110_PRENUM_CHECK. This need to be modified as per the
customer requirement and Z form needs to be attached here.
Since the check will contain all the information of payment details we have
selected the parameter under Note to payee lines on the form -as many as
required and Parameter - no Payment advice.

In case you get error while entering the maximum amount enter a lower figure
such as 9999999 and press enter. System will automatically set the format

Click on
Update the following:-

Click on

Update the following:-

Click on

Click to scroll down

Update the following:-

Click on

We will configure payment method T (eBanking Payment Method) similarly

will the following fields updated.
Click to scroll down

Click on
1.3.2.3.5 Set Up Bank Determination for Payment Transactions

IMG à Financial Accounting à Accounts Receivable and Accounts Payable

à Business Transactions à Outgoing Payments à Automatic Outgoing
Payments à Payment Method/Bank Selection for Payment Program à Set
Up Bank Determination for Payment Transactions

Before you can configure this step you need a house bank to be configured. You
can refer the SAP Bank configuration manual.

Here you define the following:

üRanking order of banks

You specify which house banks are permitted and rank them in a list.

ü Bank accounts

For each house bank and payment method and currency, you specify
which bank account is to be used for payments.

üAvailable amounts

For each account at a house bank, you enter the amounts that are
available for the payment run. You enter separate amounts for
incoming and outgoing payments. Specifying available amounts
enables you to control which bank account is to be used for payments.
You can specify the amounts depending on the value date at the bank.

ü Value date

You specify how many days elapse between the posting date of the
payment run and the value date at the bank, dependent on the payment
method, bank account, payment amount and currency. You can have the
system determine the value date, taking into account the bank calendar
and any individual arrangements made with the bank. To do so, choose
the activity Define value date rules

Select and double

click on
Click on

and update the following House banks are ranked for

payment based on payment method and currency. If there are more than one

house bank, the second bank will be ranked based on payment method and

currency.

Whenever you want to make payment from the desired bank you need to check
the ranking of the house bank here and change the ranking to 1, which is
possible through transaction code S_ALR_87001487 - Bank selection for
payment program (which is available on the SAP Easy access menu)

Click on

Next step is to maintain bank GL sub-accounts for these house banks.

Bank sub accounts for our bank accounts are as follows:-

111411 ICICI check issued out
111412 ICICI outgoing w/tfr

Double click

Click on and update the following information:-

Click on

Double click on

And click on

Update the available amount for outgoing payment and the currency for the
house bank. The available amount for outgoing payment in this case we have
updated the maximum amount. The amount planned here is available for
outgoing payments. The amount is only used for payments with which the bank
debit entry is expected during the number of days displayed.

Click on
1.3.3 Outgoing Invoices/Credit Memos
1.3.3.1 Maintain Terms of Payment

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Outgoing Invoices/Credit Memos à Maintain
Terms of Payment

Click on

Update the following:-

Click on

1.3.3.2 Define Cash Discount Base for Outgoing Invoices

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable
à Business Transactions à Outgoing Invoices/Credit Memos à Define
Cash Discount Base for Outgoing Invoices

Here you determine whether the tax amount is to be taken into consideration in
the base amount for calculating the cash discount amount. You make your
specifications per company code.

We do not want the cash discount base to be net.

1.3.4 Incoming Payments

1.3.4.1 Define Accounts for Cash Discount Granted

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Incoming Payments à Incoming Payments
Global Settings à Define Accounts for Cash Discount Granted

Update the following:-

Click on

Update the following:-

Click on
1.3.5 Down payment received from customer

1.3.5.1 Define Reconciliation Accounts for Customer Down Payments

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Down Payment Received à Define
Reconciliation Accounts for Customer Down Payments

Here you define an account in which the customer down payments or down
payment requests are managed in the general ledger. In the case of down
payments or down payment requests, the posting is automatically made to this
account instead of to the normal receivables account (reconciliation account).

You can use the SAP standard Sp. G/L indicator

Double Click

Update the following: -

Update the following: -

Click on Save

Click on
Click on Save

Let us create a down payment request special gl indicator F

Double click

Update the following:-

Click on
Click on
Click on

1.3.6 Down payment made to vendor

1.3.6.1 Define Alternative Reconciliation Account for Down Payments made to

Vendor

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactionsà Down Payment Made à Define
Alternative Reconciliation Account for Down Payments

Here you configure the special GL account for vendor down payments. The
down payment posting is then automatically made to this account instead of to
the normal payables account (reconciliation account).
Double Click

Update the following:-

Update the following:-

119820 is the Vendor down payment account

Click on Save

Click on
Click on Save

Let us configure a vendor down payment request F. This is required when you
want to make payment through automatic payment program. This will create a
noted item (statistical entry).

Double click

Update the following:-

Update the following:-

213320 - Account trade 3rd parties (Reconciliation account)

119821 - Down payment request

Click on

Click on
Click on Save
. A is the target special GL indicator 1.3.7 Define Sort

Method and Adjustment Accts for Regrouping Receivables/Payables

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactions à Closing à Regroup à Define Sort Method
and Adjustment Accts for Regrouping Receivables/Payables

Here you define the periods for the remaining terms of receivables and
payables. For each period, you can specify whether transfer postings are to be
made for customer, vendor, or G/L accounts. This configuration also regroups
credit balance in Accounts Receivable and Debit balance in Accounts
Payable.

We are configuring for regrouping of AR and AP balances which are maturing

beyond 6 months.

119020 AR 3rd parties

119842 AR adjustment account regrouping
119843 Debit balance in AP
119060 A/R maturity > 6 months
213320 A/P 3rd parties
213370 A/P maturity > 6 months
219942 A/P adjustment account regrouping
219943 Cr. Balance in AR

Click on

Update the following: -

Click on Save

Select

Double Click

Click on
Update the following: -

Click on Save

Click on

Update the following: -

Click on

Update the following: -

Click on Save

Click on

Update the following: -

Page 114 of 114 SAP ENTERPRISE 4.7

Click

Click on Save

Update the following: -

Click on Save

Click on

Update the following: -

Click on Save

Click thrice

Select

Double Click

Click on

Update the following: -

Click on Save

Click on
Update the following: -

Click on Save

Click

Click on

Update the following:-

Click on Save

Click on
Update the following: -

Click on Save

1.3.8 Define Reply Addresses for Balance Confirmation

IMG àFinancial Accounting àAccounts Receivable and Accounts Payable

à Business Transactionsà Closingà Count à Balance Confirmation
Correspondence à Define Reply Addresses for Balance Confirmation

In this step, you define the address to which the customers or vendors are to
send their reply for the balance confirmation. Since this address is often different
from the company code address, this specification is very important. You can
define several addresses under one ID for every company code.

Click on

Update the following:-

Click

Update the following:-

Click

Click on