FI-Accounts Payable: Some Configuration Notes

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Financial Accounting (FI)

Accounts Payable is an important sub-module within FI and it is inevitable to come across its effect whether you are trying to configure MM or CO or PP. So I am providing these brief notes that can be used to configure AP. Accounts Payable AP is a subledger with strong integration with MM, AR, andreasury Module. House Banks First Step: We first create House Banks. These are the banks for your clients. Your client uses these for its banking transactions. One House Bank can have multiple bank accounts assigned to it. During the implementation one can try to rationalize both, the Banks and the Accounts. A House Bank has a Unique Bank Key. Bank Keys differ by each country's norms. The US Bank Key is called ABA (American Banking Association) number. Normally each House Bank can have its own Company Code. In some cases, where the Banks use a different ABA key for paper Transactions and a different one for Electronic Transactions, you Create Two House Banks instead of one for One Physical Bank. Also, Two Bank Accounts will be created for a Single GL Account. T-Code: FI12 Menu Path: Financial Accounting > General Ledger Accounting > Bank-Related Accounting > Bank Accounts > Define House Banks

Config Steps: A House Bank is tied to a Company Code and each Bank Account is tied to a House Bank. So first we Select the Company Code for which the House Bank is to be created. The Create Bank icon is clicked and it brings up a pop up for House Bank Identifier and House Bank Country. House Bank ID is a number decided by you. You can specify a number based on your numbering conventions. The Next screen requires entry of the Bank Key - the ABA number is the House Bank country selected was US. On this screen you also enter the House Bank Address data as well Control Data - comprising of SWIFT COde, Bank Group and Bank Number. Once the House Bank data has been entered and filled up, you click on Bank Accounts and you are taken to the screen to configure the Bank Accounts. On the Next screen click on the "Create Acct" icon. A pop up comes up where you enter the House Bank Identifier in your system as well as the Bank Account identifier in your system along with a text description. Once this is done, we get to the main screen where we enter the following data: Bank Account: The Bank Account given BY the Bank. Altern. Acct No.: This field is used when two accounts at the same bank use the same account number. This situation may arise when the bank manages the accounts in two different currencies. This field has a different number than the Bank Account field. Currency: This is the currency in which the account is managed. Control Key: For US Banks, this is used to identify whether the account is a Checking or Savings account. The key is 01 for Checking and 02 for Savings. The Default value is checking account if

nothing is specified. GL Account: Each Bank Account is assigned to a GL Account Number. The Bank Account updates the GL Account entered here. Discount Account: If the company uses the Bill of Exchange facility then we enter the Cash Discount Account for Credit Memo Postings that this Bank Account should update. Bank Account Structure It is important to have the right structure for Bank Accounts, GL Accounts and the Clearing Accounts. It is important to know how much of: - Confirmed Cash, - Floating Cash out, and - Floating Cash in is available for the company on a particular day. There should be Only One Confirmed Cash GL Account with many Bank Clearing Accounts. So, the Checks Outgoing Clearing, Wire Outgoing, ACH Out, and Deposits clearing need to be set up for each Bank Account. It is also important to leave room for additional clearing accounts that may be needed in future. For this, we may have a range of 10 GL Accounts for each Bank Account. The numbering, for example, can have the GL Account ending with 0 for each Confirmed Cash Balance (eg: 110000); each deposit clearing account will end up with a 1 (110001); each outgoing check clearing account will end with a 2. each outgoing ACH account will end with a 3 and each outgoing wire account may end up with a 4. Check Lots and Void Reason Codes The final step in configuring of the AP Bank Account is to assign it to a check lot.

Check Lots If the company has a MICR printer then a blank check lot can be used for Payables. The check lot determines the check number that is used on payments. The first step is to bring up the "Check Lots" screen. T-code: FCHI Menu Path: Financial Accounting > Accounts Receivable and Accounts Payable > Business transactions > Automatic Outgoing Payments > Payment media > Check Management > Define Number Ranges for Checks On the main screen you need to fill up Company Code, House Bank number, and the Account ID for which the checks are being created (?) After saving the information click on "Change Status" icon. This takes you to "Maintain Check Lots" screen. Most of the information will come filled up. You can enter the From and To check Numbers. To create a new check lot and assign it to the account, you can click on the "Create" icon. In the pop up enter the Lot number identifier and he range of the check numbers and also the next lot number if needed. Void Reason Codes In SAP, it is not possible to void a check without a valid reason code. We can have any number of Void Reason codes. There should be at least one Void reason Code configured in the system. T-code: FCHV Menu Path: Financial Accounting > Accounts Receivable and Accounts Payable > Business

Transactions > Automatic Outgoing Payments > Payment media > Check Management > Define Void Reason Codes. Three Void reason Codes come pre-configured - 1, 2, and 3. They deal with the problems encountered with the printers. There are indicators to be assigned which define whether the Reason Code is due to Manual or Print program. Any codes created by the users are only assigned Manual. Payment Program Configuration This step determines how to process the payment transactions in the system. The Payment Program is a series of steps within one Program. The configuration occurs in table T042 and other variations of table T042 that end in a letter. T-Code: FBZP Menu Path: Financial Accounting > Accounts Receivable and Accounts Payable > Business Transactions > Outgoing Payments > Automatic Outgoing Payments > Payment Method/Bank Selection > Configure Payment Program