F110 in SAP: Automatic Payment Program (APP)
In the previous post, I talked about the manual vendor payment process using tcode F-53 in SAP. But there is another transaction that allows you to post automatic payments against open invoices. It is known as the Automatic Payment Program or APP. You execute the APP using transaction F110 in SAP.
It is important to note that APP in SAP is not only used for automatic payments for vendors but also for customers. It works on the basis of house banks where you assign the bank GL accounts. Before running F110 in SAP, it is mandatory that the house bank and the other configurations are complete in tcode FBZP.
Also, please make sure that you assign all the payment methods to the country for which the Automatic Payment Program is to be run. Since APP is mostly used to process vendor payments, this tutorial is based on the vendor process only. So without further ado, let’s begin the tutorial.
Table of Contents
Step 1: Post a Vendor Invoice using FB60
To process the automatic payment for vendors, it is important to have an open invoice for all vendors for which you will be making the payment. I’m taking an example of only 1 vendor in this tutorial, i.e., Vendor 300066 (ABC Suppliers) for Company Code 1000. I have posted the following vendor invoice of 1,00,000 rupees.
As you can see, document number 201045 is a vendor invoice document. A credit balance of 1 Lac rupees for vendor code 300066 means that I’m liable to pay this much amount to the vendor.
Step 2: Execute F110 in SAP
Once you have an open invoice against a vendor code, it is time to execute the Automatic Payment Program. The tcode to run APP is F110 in SAP. After executing the transaction, you have to enter the Run Date and Identification code. The run date is a date on which you are running this transaction. Similarly, you can give any 5-digit identification code. For example, I have given identification as TEST2.
Step 3: Enter the Selection Parameters
After entering the Run Date and Identification, click on the ‘Parameter‘ tab. Enter the posting date, documents entered up to, company code, payment method, and next payment date fields.
Posting Date of 31st August 2020 means that the automatic vendor payment document will have this posting date. A date of 31st August 2020 in the Docs Entered Up to field means that the system will consider all the open items to this date. Please note that it is not a posting date but an entry date of the document.
Similarly, enter the company code for which you are going to make the payments, payment method C for cheque, and next payment date fields.
In the same selection screen, enter the vendor or customer accounts. Here, you can give the range of vendor or customer accounts in case you are want to make the automatic payment of many sub-ledger accounts at once.
Considering that I’m focusing only on 1 vendor account in this example, I have given the same vendor account 300066 on the selection screen.
Step 4: Free Selection, Log, and Payment Medium
The next step is to enter the data in the rest of the 3 tabs. In the Free Selection tab, you can enter the vendor invoice document number against which you want to make the payment. The system will consider that document only for payment and will leave the rest of the open invoices as it is.
As can be seen in the screenshot below, I haven’t filled anything in this tab as I want the system to consider all the open invoices for payment.
Moving on to the Additional Log tab, you can enable the checkboxes according to your requirements. The data will be displayed in the log based on the selections made by you on this screen.
In the Payment Medium tab, you need to enter the variant details. A variant contains the data related to house banks, paying company codes, and cheque details. If a variant has not been created, it is suggested that you create it by entering the variant name of your choice and then click on Maintain Variants.
In the variant, enter the paying and sending company codes. Also, enter the details for payment methods, house banks, and a check lot number. The system will determine the cheque number from the check lot number after executing the payment. Click on the ‘Save’ button to save all the selection parameters for this payment run.
Step 5: Create the Payment Proposal in F110 in SAP
After saving the parameters, the next step is to create the payment proposal. Click on the ‘Proposal‘ button at the top to run the batch job.
The system will automatically take the system date as the start date. Enable the checkboxes for Start Immediately and Create Payment Medium to start the batch job immediately and allocate a cheque number to the payment respectively.
As soon as you create the proposal, click on the Refresh or Status button at the top to update the status of the proposal. The status of the payment run can be seen in the STATUS section. To view the proposal details, click on the ‘Display Proposal Log‘ button.
You can see the vendor invoice details in the log section. The system will display the vendor invoice document that is eligible for payment along with the payment terms of that document and the invoice amount.
Step 6: Execute the Payment Run in F110 in SAP
The last step in the APP is to execute the payment run by clicking on the ‘Payment Run’ button at the top. Enter the same parameters as given at the time of the proposal run. Again, click on the Status button to update the status of the payment run. To display the payment run details, click on the Payment button to open the payment log.
In the Payment Run log, you can display the payment document generated by the system along with the accounting entry. A payment document number 202036 has been posted for vendor 300066 within company code 1000. You should also be able to see the generate cheque number. Please note that this payment document will automatically clear the original vendor invoice.
Optional Step: Display the Payment Document in FB03
To display the payment accounting document, execute the tcode FB03 and enter the document details.
The following accounting entry should be visible.
Vendor Account Dr. 1,00,000 INR
Outgoing Bank GL Account Cr. 1,00,000 INR
I hope this tutorial is insightful to you. Please stay tune for more!
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