Automate Payments to Multiple Vendor Bank Accounts

  • by Akhilesh Mittal, Lead Consultant, Infosys Technologies Ltd.
  • February 15, 2007
Configure your R/3 or mySAP ERP Central Component (ECC) system so that you can select a vendor’s bank from multiple bank accounts for automated payments. See three methods for creating a vendor invoice — manually with or without a purchase order, and automatically using Electronic Data Interchange — and how to use transaction F110 to conduct an automatic payment run for selection of the vendor’s bank account
Key Concept
Automated vendor payment functionality (transaction F110) allows you to send payment details to your bank for making payments directly to your vendor. Vendor bank detail forms an integral part of the payment information. Transaction F110 selects the vendor bank data from the vendor master (transaction FK03). A vendor may keep bank accounts with several banks depending on business requirements, such as receiving payments from multiple countries or in multiple currencies. You can maintain the details for all such accounts in the vendor master in your SAP system using the partner bank type field. The SAP system can deduce the bank information by using partner bank information in the vendor invoice.

A vendor may have multiple bank accounts and may want you to make payments to its accounts on the basis of certain rules. The rule-based selection of the vendor’s bank account may depend on a simple rule based on company code currency and bank account currency — for example, if a vendor supplies materials to multiple company codes. Alternatively, it may be a complex rule related to the nature and currency of payment (e.g., cross- border transfer, domestic funds transfer, and the ability of the vendor’s bank account to receive such payment).

If you could store the vendor’s bank details in the vendor invoice, then you could also use it while making automated payments. However, you can’t key vendor bank information directly into an invoice that you create in your SAP system. This would lead to sub-optimal use of master data (vendor’s bank account information) in transactional data (vendor invoice) from the database viewpoint, because you would have to store the bank account information in each invoice. Your SAP system has an optimal way of addressing the issue by providing a bank identifier — partner bank type — that you can associate to the bank details in the vendor master and then use in the vendor invoice. With this method, the bank identifier provides a relationship between bank details in the vendor master and vendor invoice, allowing for the use of bank details with the vendor invoice during automated payments.

I’ll look at how to assign multiple bank accounts in the vendor master and how to include bank identifier information in manual vendor invoices both with and without reference to a purchase order (PO). (You can create an invoice without reference to a PO if you are buying a very low value item on an ad hoc basis. When you create a PO for a purchase, you have to create an invoice with reference to a PO.)

I’ll also show you how to update this information after go-live if you didn’t use multiple bank accounts before go-live with the mass maintenance process. I’ll explain what to do in the case of vendor invoicing through Electronic Data Interchange (EDI).

I’ll cover two methods of manual invoice creation and one method of automatic invoice creation from an EDI message. I developed these approaches from experience on an R/3 4.7 system, though it applies to mySAP ERP Central Component (ECC) as well. Much of the documentation on this subject is incomplete. For all three types of invoicing methods, you need to assign multiple bank accounts in the vendor master to the partner bank type, which I’ll explain in the next section.

Akhilesh Mittal

Akhilesh Mittal is a lead SAP consultant at Infosys Technologies Ltd. with eight years of consulting and industry experience. He has experience in FI and CO along with exposure to SD. Akhilesh is currently a consultant in the SAP space for a leading organization in the high technology domain. He has a degree in electronics and communication engineering from IIT Guwahati and an MBA in finance and systems from IIM Lucknow.

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