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,

and reasury 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