Understanding Automatic Payment Program Configuration.

[Sudeep_Durgule]

> What is the Automatic Payment Program (APP) in SAP?

The Automatic Payment Program (APP) is one of the most powerful and widely used tools in SAP Financial Accounting (FI). It's used to automate the process of paying open items (like vendor invoices, customer refunds, or employee reimbursements) using pre-defined rules and parameters.

Instead of manually processing each payment, APP streamlines this by selecting due items and even creating bank files (for RTGS, NEFT, etc.) ready to be sent to the bank.

> Why is APP used in real businesses?

In large organizations, it’s common to have hundreds or thousands of transactions daily. Doing all this manually can lead to:

• Human errors

• Missed due dates

• Loss of cash discounts

So, because of all these points, the APP is used in Companies.

> Basic Configuration Of Automatic Payment Program (APP)

        Open T code FTZP 

           1) Select 1st Option ( All Company Codes)

Special Gl :-

A = Downpayment 

F = Downpayment Request

P = Payment Request 

2) Paying Company Codes

For Forms field :

Press F4 then select Payment Medium > International > Payment Medium Workbench > Payment Advice Note (International)

3) Payment Method In C/R

Create 3 basic Payment methods for your country:-

C = Cheque (Check)

E = Cash Payment

T = Bank Transfer

Under each Payment Method, you can choose a payment method either for Outgoing Payment or Incoming Payment, or both. 

Tick on Payment Method Classification according to your Payment Method.

After creating and saving your Payment Method, select your payment method and click on currencies allowed ( on the left side, 2nd option), make New entries  > and mention your country's currency.

4) Payment Methods in Company Code

You have created all types of payment methods in step 3 for a specific country. Now we have to maintain that in our company code. 

This configuration tells SAP:

• What type of payments are allowed in that company code

• What payment method applies to vendors/customers

• What accounts, forms, and processes should be used when making a payment

Put the Maximum and Minimum amount limit on your payment method.

5) Bank Determination

(Before going to this option, 1st create a House Bank using Fiori (/N/UI2/FLP). Use the FIORI app "Manage Banks" to configure the House bank.

After selecting your paying company code,

• Select Ranking Order:-
• 

Put your ranking order of your bank according to the payment method, so the system will understand which bank to use for payment, and the payment method. If the funds are not sufficient in the 1st bank according to your ranking, the system will check for 2nd bank if any ..

• Bank Accounts

Here you have to maintain your GL accounts of your bank ( usually we create 3 GL for one House bank, which are Main Bank Account, Incoming Bank Account, and Outgoing Bank Account.)

Put your House Bank, Payment Method, and select the GL ( Most of the time it is Outgoing Bank Account)

• Bank Accounts (Enhanced)

Same as above, but more details are required to fill.

• Available Amounts

The Available Amount setting is crucial. It defines the maximum amount that can be paid from a specific bank account per day during automatic payments. ( In short, it is a balance of the bank account that the end user needs to update daily )

Here we finish the basics of  APP configuration.