Accounts Payable (A/P)

Accounts payable manages your vendors, their deliveries, the invoices, the payables and the
payments. SAP supports all standard payment methods (checks, bank transfers, etc) in
printed and electronic form, which you can make fully automatic via the payment program.
The FI G/L is always updated with the postings made in FI A/P, there are many reports that
give details on due date forecasts, balance confirmations and account statements.

In this section we will be covering the following

 Vendor master data

 Business transactions
 Outgoing payments
 Reporting

Vendor Master Data

Vendor master data contains data about the vendor such as name, address, language,
contact details, bank details, account control, etc. This information can also be used in
Materials Management (MM), if possible try to maintain each vendor centrally, what I
mean is that try to have one and only one account (sometimes its not possible) for the
vendor.

Vendors master data is grouped into three sections

 name, address, language, telephone number, etc

 control (tax type, trading partner, industry, etc)
General data  payment transactions (bank key, bank a/c, alternate payee, etc)
 contact person

 accounting information (recon a/c, W/Tax code, interest indicator, etc)

 payment transactions (payment terms, payment methods, tolerance groups, etc)
Company Code data
 correspondence (dunning procedure, dunning level, dunning block, accounting

 Purchasing data (conditions (order currency, incoterms, etc), sales data, contro
Purchasing (automatic purchase order, GR-based invoice verification, ABC indicator, etc))
Organization data  Partner functions

A account group determines the characteristics of the master record as the type of number
assignment, whether the account is for one-time vendors what fields are to be displayed,
etc. Each master records has a unique record number determined by number intervals or an
external numbering system. You can restrict access to master records using authorizations.
We have already discussed number ranges in our document section, for vendor number
ranges we will use transaction code XKN1, you can see the number ranges I have already
created blow,

We have already discussed account groups in the G/L accounting section, you can use
transaction code OBD3, as you can see I have already create a number of account groups,
to get more detailed information just double-click on the account group. You must have at
least one account group defined, then you must create at least as many accounts groups as
there are number ranges. You can only delete an existing account group if no master record
is referencing that account.

You can use transaction code OBAS to assign the number ranges to the account groups,
again I have already assigned the accounts groups to the number ranges.
Dual control allows you to control sensitive fields preventing any unauthorized changes to
the field such as payment terms, alternate payee or payment methods. You can define what
fields are sensitive, the system will block these fields unless another authorized person
confirms the changes individually (transactions code FK08) or for a number of fields in a
list (transaction code FK09). To setup the sensitive fields we will use transaction code
S_ALR_87003179, you can see in the screenshot below that I have made the alternate
payee field a sensitive field.

Now we can look at defining the accounting clerks who will give the authorization, we will
use transaction code OB05, I have create myself an clerk ID for company code DD11

Vendor Master Data Creation

You can create the master data in three ways

 Create the master data in both accounting and purchasing in one step
 Create the master data in only the company code for accounting purposes only
  You can create the master data by using a reference to an already existing master
data record

Lets have a look at creating the master data record in one step in both accounting and
purchasing, for this we will use transaction code XK01, from this transaction we can create
both master data in accounting and purchasing or create a master data by using the
reference section (simply select an existing master record), leave the account when copy
from an existing and the system will automatically make sure that the vendor is in the same
account group.

If you want to create the vendor for accounting purposes only then use transaction code
FK01, as you can see the only difference with above is the purchasing organization option
is missing

One final point to make is that if you want copy vendor master records from one company
code to another then use transactions FK15 (send) and FK16 (receive), the below
screenshot is the part of the FK15 transaction code
You can also create one-time vendor accounts, which when you create the master data no
specific data is held, but when you post the system will automatically take you to a master
data screen to enter the specific vendor information, this information will be stored
separately in the document. If you want to delete master vendor data you can using
transaction code OBR2, you can run a test before you actually delete anything. The master
records must not be production active, also if the master record is referenced to another
master record you should start the program SAPF047 to generate link information of such
referenced records before carrying out any deletion, be very care when deleting master
records. If you get an error message stating that you cannot delete the data as it is a
productive system then use transaction code OBR3

You can also delete transactional data from a specific ledger for a particular fiscal year
using transaction code FAGL_DEL, the filter screen (left-hand screenshot) you can enter
the ledger company code, account number and fiscal year. You can also delete transactional
data in a particular company code to prepare it for production startup, you can use the IMG
(right-hand screenshot).

Business Transactions

Business transactions need to be setup to make the processing transaction easy and fast,
first we will look at the terms of payment (or payment terms), such as number of days by
which a payment is to be made or if you will give any discount for early payment. The
payment terms are defined by a four-character key once define you can assign them in the
vendor or customer master records. SAP comes with several payment terms already
configured but you can define your own by using transaction code OBB8,

Lets create a new payment term for Datadisk Mobility, by selecting the new entries button
and fill in the details, once you have saved if you look at the bottom of the screen yo can
see that payment term in plain old English.
 payt terms - a four character identifier
 sales text - self explaining
 day limit - used for two part payment term configured under a single key
 own explanations - you can use your own explanation text
 account type - you can select the the type of account
 fixed day - the system will overwrite the day of the baseline for payment of the line
item with the fixed day
 additional months - this provides additional cushion for payment, for example if
you add 01 in this field and the baseline date is 01-25-2013 then the baseline date is
postponed to 02-25-2013
 block key - the system will use a blocking reason when you try making postings to
a vendor that has been assigned to this payment term, blank means that it is free for
payment.
 payment method - select a payment method (check, bank transfer, etc) that will be
associated with this payment term.
 default for baseline date - select what you want to use as the baseline date, if you
select no default then you will be forced to enter it manually during document entry
 installment payment - you can break up a payment into several parts with different
due dates
 rec entries supplement fm master - use if the terms of payment in a recurring
entry are to be taken from the customer or vendor master record, when no terms of
payment key have been entered in the recurring entry original document, in the
master record you can define a terms of payment (use transaction FK03 to view
payment terms).
 percentage in payment terms - the fields are self explaining, you can also have a
fixed date and additional months
You can define cash discount base for incoming invoices using transaction code OB70, this
can also be define using transaction code OBY6 under option discount base is net value

There may be times when you want to release a payment that has been blocked, once
released you can then pay for that line item. You will need to configure the workflow
variant with the document types for payment release, the level at which the release happens
and who can release the payment and up to what amount. we will use transaction OBWA,

 workflow var - this is a identifier

 currency - self explaining
 wf var.name - self explaining
 posting release - select this if you want a mandatory posting release before a
posting a document
 release from - this indicates the amount beyond which you want the release
activated
 subworkflow - we selected the SAP supplied WS10000055
 release pmnts - this is used to impose a payment release before a payment can be
made
 creator permitted - don't select this if you want to prevent the documents creator
from releasing the payment this way you can impose dual control
 payt release - enter the amount beyond which you will require a payment release
 pmnt rel.ver - select the appropriate line item variant, in this case DD - posting
key, account, business area, name, tax, etc
Now we can assign the above variant/s to the company codes using transaction OBWJ,

Next we will define release approval groups for release of payment, we need to create
approval group first using transaction code OBWB,

Since the system determines the subflow based on the release approval path and the amount
we now need to define the release approval path, using transaction code OBWC,
Next we tie everything together, the approval groups, release approval paths, workflow
variant, document type using transaction code OBWD,

We now need to to assign the above procedures (for amount and payment release) for each
combination of workflow variant, release approval path, currency and amount, we will use
transaction code OBWE,

 wrkf - the workflow payment release

 apth - the release approval path
 amount to - the amount on which the specific release approval procedure will be
triggered
 crcy - this is default by the system, which is the currency of the workflow variant
 rel levels - the system determines the number of release levels and saves them in the
parked document
 swf amnt rel - the amount release for parked/posted documents is executed via a
sub-workflow template, select a workflow template that has already been predefined
for this purpose for parked documents: WS10000052 (for single level release),
WS10000053 (for two level release) or WS10000054 (three level release), if not
amount release is required you may enter a blank workflow template (WS2000006)
you can use similar sub-workflow templates for posted documents (WS00400011,
WS00400021 or WS00400022)
 swf pmnt rel - this is the same as above but for payment release

You can also define relevant document types for release of payment using transaction code
OBWQ, I will leave you to invest this option.

The authorization is in the form of an organizational object (business unit a user is attached
to or the position of an individual in the organization) that will then be assigned to the
release approval step. We will use transaction OBWP, the currency will be completed by
the system. If you highlight an entry and then select goto -> details (org object) you can
then add the organizational group or type of role as you can see in the right hand screenshot

You can define payment block reasons to identify and differentiate the invoices that are
blocked for payment, once defined payment reasons are available for all company codes.
We will use transaction code OB27, SAP supply a number of payment block reasons as
seen in the below screenshot.

Outgoing Payments

Outgoing payments are payment to your external (business partners that you purchase
goods and services) and internal vendors(your staff or other divisions of your company),
you will need to configure the following for outgoing payments

 Global settings
 Manual outgoing settings
 Automatic outgoing payments

We will start with the global settings, you will need to define various accounts to record
payment information, (such as cash discount), overpayment, and underpayment, rounding
off differences and exchange rate differences, use transaction code FBKP to see the auto
acc detrmn transctn

Transaction Auto A
Task Explanation
Code detrm
 transc
Define accounts for used for any cash discount received when clearing open
OBXU SKE
cash discount taken items
Define exchange rate
see G/L accounting open item clearing
differences
Define accounts for
used for rounding differences OB00 RDF
rounding differences
Define accounts for
bank charges used for any bank charges OBXK BSP
(Vendors)
define revenue and expense accounts so that over/under
Define accounts for
payment differences within tolerance limits during OBXL ZDI
over/under payments
automatic adjustment posting

You can also see them in the IMG as per the below screenshot

Once you have created the accounts we can define the posting keys for clearing, we will
use transaction code OBXH, which we have already seen in the G/L account open item
clearing.
You can enable translation posting which means you will post the translation gain/loss
when clearing open items in a foreign currency, we will use transaction code OB66, the
translations are posted if the items to be cleared have already been revalued once during
foreign currency valuation. The SAP system posts the difference to a separate translation
account with the offsetting entry posted to a clearing account.

We can now set the payment block reason with the associated terms of payment key, when
entering vendor or customer postings you will see that the system proposes the terms of
payment with the block reason of the payment terms key, use transaction code OBBC,
notice that payment terms DDV2 will propose the block reason as "B -blocked for
payment" when a payment term is proposed for the vendor.

This completes the global settings and we move onto the manual outgoing payment
configuration, we have setup the global settings above and thus we need to only configure
the below for the manual outgoing payments

 Define tolerances (vendors)

 Define reason code (manual outgoing payments)
  Prepare cross-company code manual payments

Similar to tolerance groups for G/L accounts, we need to create a similar setup for vendors,
the SAP system when using tolerance groups will use the lower tolerance if more than one
group is available, you should setup a null group which will act as the default tolerance
group and any others that you need to place additional limits, we will use transaction code
OBA3, in the screenshot below on the left hand side you can see the D11 tolerance group
and on the right hand side you can see the null tolerance group for DD11 which has more
restrictive amounts.

 grace days due - the number of days is added to the payment deadlines so that you
can still provide a cash discount after the deadline has passed
 arrears base date - use the drop down values to indicate how the arrears base date
is arrived at, leave blank if you want the days in arrears according to the document
date.
 cash discount terms displayed - this specifies to display the cash discount terms,
blank, 0 or * will display the discount term, 1,2 or 3 will display the respective cash
discount term
 permitted payment differences - self explaining
 payment terms from invoice - use this if you want the terms of payment to be
transferred from the original line item to residual items created because of
under/over payments
 fixed payment terms - the payment terms will not be transferred from the original
document
 only grant partial cash disc - grant only a partial cash discount if an outstanding
receivable is posted due to an insufficient payment when clearing an invoice
 dunning key - select an appropriate key if you want the system to enter the dunning
level into an automatically generated residual line item

DD11 Tolerance Group DD11 Null Tolerance Group

Defined for each company code the reason codes help you to post residual items and partial
payments to an account ( from payment differences) in processing outgoing payments
manually. The reason codes 050 and 060come with the SAP system, you can use
transaction code OBBE,

 rcd - a three character identifier reason code

 short text - self explaining
 long text - self explaining
 corrt - this is the correspondence type to go with reason type
 c - this is the charge indicator, so that payment differences with this reason code are
charged off via a separate G/L account depending on the reason code
 d - this will provide disputed items from payment differences during residual item
formation.
 do not copy text - used for not copying the reason code predefined text into the
segment text of the residual item or partial payment so that you can enter the text
manually
 adv note diff - select if you do not want to consider the tolerance for payment
advice notes
We will need to maintain the pairs of company codes for which you want to make manual
outgoing payments, for each of the clearing transactions such as outgoing payments
(AUSGZAHL), incoming payments (EINGZAHL), credit memo (GUTSCHRI) and transfer
postings with clearing (UMBUCHNG) you may maintain the company code pairs, we will
use transaction OB60, the first column is the paying company code that will make
payments on behalf of the company code in the third column

Automatic Outgoing Payments

You can use SAP's payment program to handle both outgoing and incoming payments
automatically, you can use several payment methods (cheque, bill of exchange, etc), the
program comes with required forms and print programs that meet country specific payment
requirements of almost all countries, the program can help you with the following

 enable you to clear open items (between vendors and customers)

 make inter-company payments
 process both domestic and foreign payments
 block payments
 any other actions

The payment program determines what is to be paid, when to pay it and how to make the
payment, through payment rules that you define in the payment program configuration, you
can even group several open items that are to be paid into a single payment. The rules will
determine the due dates for payment, payees to whom the payment should be made, house
banks from where the payment should be processed and the appropriate payment methods
relevant for the payee or country. The configuration order is the following

1. Setup all company codes for payment transactions

 2. Setup 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 transactions
6. Define value date rules
7. Make settings for displaying payments
8. Make settings for displaying line items
9. Check payment block reasons (default)
10. Prepare automatic postings for payment program
11. Define payment forms
12. Assign payment forms for payment methods in company code
13. Assign payment medium program for payment method in country
14. Make settings for payment medium formats from payment medium workbench

Transaction code FBZP will allow use to configure the above, you can also use transaction
code OBVU (configure paying company code) and OBVCU (configure the payment
methods)

We will start with all company codes as we want company code DD11 to take care of the
payments for company code DD12, so select the top button and then select the new entries
button,

 company code - self explaining

 sending company code - enter the vendor or customer that will be sending the
payment, if left blank then the sending company code with be the paying company
code
 paying company code - the company code that will be making the payments
 separate payments per business area - group the payment line items per business
area
 pyt meth suppl - pre-define a payment method supplement in the customer/vendor
master record
 tolerance days for payable - adds up the number of days specified here when
determining the cash discount periods and the due date for net payment, for example
 if the value is 5 and the invoice date is 01-05-2013 then it means it will not be paid
until 06-05-2013
 outgoing pmnt with cash disc from - only items with the cash discount percentage
greater or equal are paid with the cash discount deducted., if the percentage rate is
less then the payment is made at the due date for net payment.
 max cash discount - deduct the maximum eligible discount when paying the
vendors even if the payment is after the expiration of the discount period
 vendors block - enter the special G/L indicators see the below right hand
screenshot
 customer block - again these are special G/L indicators that are different from the
vendors

Now we can move on to the paying company codes, we will use transaction code FBZP,
and select the paying company codes button, then select new entries, remember to
configure for each company code

 paying co code - self explaining

 minimum amount for incoming payment - the amount where the system will only
generate a debit memo for an incoming payment, in all other cases the amounts will
be printed in an exception list
 minimum amount for outgoing payment - the amount above which a the system
will create a outgoing payment, again an exception will be printed if the payment is
equal or less than
 no exchange rate differences - if you don't want any exchange rate differences
then select this, if selected then the exchange rate difference will be calculated using
the translation rate and the difference thus calculated will be posted automatically
for each payment
 no exchange rate differences partial payment - same as above
  separate payment for each ref - this is to settle in a single payment invoices or
credit memos that have the same payment reference
 bill/exch payment - use for bills of exchange payment requests or the check or bill
of exchange procedure in the paying company code.

Next we setup the payment methods per country for payment transactions, we will again
use transaction FBZP and select the pmnt methods in country button, we will be using the
stand SAP supplied methods, on the initial screen you see that each country as a number of
payment methods, the screenshot below display the US has 10 different payment methods.
Now on to setting up the payment methods per company code for payment transactions,
this stipulates the conditions for a particular payment methods usage, you can determine the
minimum and maximum amount limits for each of the payment methods and specify the
grouping criteria for the payment items, you can also make specifications for foreign
currency payments, payment form per payment method and optimizing bank selection,
again use FBZP and select the pmnt methods in company code button. You will need to
create for each company code and each payment method

 paying co code - self explaining

 pymt method - see below right hand screenshot
 minimum and maximum amount - the amounts which the payment will not be
selected
 distribution amt - any payment exceeding this amount will be analyzed to see if
can be split into more than one payment totaling this amount
 single payment - use this to make individual payments for each of the line items
that have been identified with the payment method
 payment per due date - group payments that are due on a particular day, which
means you can take the maximum cash discount
 foreign business partner allowed - to make payments to business partners abroad
 foreign currency allowed - the payment program makes payments in other
currencies than the local currency of the company code
 cus/vendor bank aboard allowed - for making payments at the vendors or
customers home country from the business partners bank itself.
 bank selection control - if you select the postal code the payment program uses the
postal code to arrive at a bank which is geographically nearest to the business
partner, the bank option group selects the optimal pair of banks when you use the
electronic payments methods.
 form for the payment medium - this confirms form such as
F110_PRENM_CHECK for the payment method C
The below diagram determines the correct payment method as the payment method can be
maintained in many places,

We can how configure the line item to determine the bank from the customer and vendor
master records or maintain the bank to be used for payments, we will need to configure the
following

 The permitted banks and their ranking list

 The bank account that will be used for payments, for each house bank and payment
method (and currency if required)
 The amounts (both for incoming and outgoing) that are available for the payment
run for each account at the house bank
  How many days can elapse between the posting date of the payment run and the
value date at the bank, depending on the payment method, bank account, payment
amount and currency
 If the system can determine the value date, taking into an account the bank calendar
and any individual arrangements entered with the bank.
 The charges that are to be printed on the bill of exchange forms

We will first create a house bank and define the bank accounts that we will use, a house
bank contains all the banks with which your company maintains a bank account, you will
have a house bank for each bank you do business with, see bank accounting for more
information, this configuration will then be used for the bank determination, we will use
transaction code FBZP and select the house banks button, in the screenshot on the left you
can see that we have created a house bank for CITI and entered the bank for CITI, you can
also add contact details, etc. Once the CITI house bank has been created we can then add
the bank accounts to this bank which you can see in the screenshot on the right, you may
have more than one account in the CITI house bank, just add additional accounts here.

Finally you will end up with all the account/s for your bank/s here
Now we have our house banks configured we can configure the bank determination, we can
use transaction code FBZP and select the bank determination button, on the initial screen
highlight the company code and then you can see the bank selection to the left

 ranking order - the permitted house banks and the ranking order which will be
used for payment
 bank accounts - the bank accounts that will be used for payment
 available amounts - the amount limits that are available for the payment run
 value date - the elapse days between the posting date of the payment run and the
value date at the bank
 expenses/charges - any charges that the bank has levied on any payments, either as
a absolute amount or as a graduated scale by maintaining the charge indicator

I am not going to go in to much detail as most of it is self explaining, the below screenshot
is the ranking order, the highest ranking order will be used first if a number of house banks
are identified

The screenshot below lists all the accounts that are associated with the house bank, you can
also assign a business area

The next screenshot details the available amounts for outgoing and incoming, if the amount
on the bank account is not sufficient for an outgoing payment it does not attempt to draw
the balance from another bank, instead the payment program selects another bank to see if
there is sufficient amount to cover the entire payment, based on ranking order, if it does not
find another bank account then the payment is not made. You can leave the incoming
payment amount as blank which means it will receive all incoming payments.
The value date represents the probable number of days before the debit/credit memo is
accounted into a bank account, by adding these days to the posting date the system arrives
at the date on which the debit/credit memo is to be expected on the bank account. You can
also maintain value date rules so that the system determines the value date automatically
using a bank calendar and/or individual agreements with the bank as decision criteria

So now we have configured the bank determination for payment transaction what does
actually happen during a payment run, for a payment method and currency combination the
payment program identifies the house bank, if no house bank is identified the program tries
for a house bank for the same payment method without currency specification. The same
iteration is then carried out to determine the appropriate account ID, the program then
checks if the available amounts are sufficient to make the payment, if more than one house
bank is identified the payment is made from the house bank with the highest priority
according to the ranking order defined, if there is a payment optimization entry, the
selection will be based on this which override the ranking order. If an house bank is not
found then the payment will not be made.

We mentioned the value date above now lets define the value date rules, you have seen how
to add a lag between the posting date and the value date by maintaining the days to value
date in the payment configuration settings or check cashing time in the customer and
vendor master record. You can also define a rule for each payment transaction (for example
crediting an incoming check) at a house bank to arrive at the value date automatically, we
will use transaction code OBBA, when configured the system will add or subtract the
specified days as a deviation to the reference date (document or posting date), the system
then checks the resulting date with a factory calendar to decide whether it is a working day
before finally deciding the value date for that transaction.

You can use the transactions codes O7V4 and O7V5 for the settings for displaying
payments and the settings for displaying line items.
The SAP system comes with several standard posting keys and special G/L indicators,
however you can change (not recommended) or create new entries using transaction code
OBXC, you should see three procedures ZBA - bank posting, ZWE - bill of
change/payment request and ZWO - bank bill liability grouped under the ZAH (payment
program), for each of these procedures you can see the default postings keys, you can see
ZBA posting keys in the below screenshot

You can also see the similar settings that are available for the automatic posting for
payment requests covered under the the procedure ZAF, use transaction code OBXP.

You can generate payment media using either the classic payment medium programs
(RFFO*) or the payment medium workbench (PMW). You can use transaction code SE71
to copy an existing standard form and make changes to it, if you desire. To change the
standard text that you want for the letter head, letter footer and the sending address in the
letter window per company code you can use transaction code S_ALR_87003346.

Next assign the payment form to each of the payment methods you have defined for your
company code, we will transaction code S_ALR_87003339, you can see in the screenshot
below that I have assigned the payment form to each of the company codes, you may enter
a second form for payment methods that use two forms (for example F110_US_DATA as
the next form for a payment method like T, W, etc).
Next we assign the appropriate classic payment medium program (RFFO*) to each of the
the payment methods for the country to create the payment media, we will use transaction
code S_ALR_87003353, as per the screenshot below

Reporting

Reports help you to analyze accounts payables that allow you to monitor and manage
account balances, as part of the reporting SAP provides standard evaluations and drilldown
reports. An evaluation is made up of a evaluation view, evaluation type and evaluation. The
evaluation can retrieve data for example modeling you organization by grouping company
codes in different countries. You will need to define these variants and attach them the
same to the data retrieval program (RFKRRSEL), for each of the evaluation views you can
define the evaluation types like due date, overdue items or currency risk, you can also if the
evaluation data is to be regenerated every time the evaluation is run. You can access all the
standard evaluations using transaction code S_ALR_87012077 (vendor information
system) or F.46
The drilldown reports you can use the standard reports as per the table below or use
customizing activities to define the form or report, define the global variables and translate
the report.

Transaction Code Report Name

F.40 Account List
F.41 Open Items
F.42 Account Balances
S_ALR_87012078 Due date analysis for open items
S_P99_41000099 Payment list
S_ALR_87012086 Vendor list