Use Business Place Functionality to Cater to Branch-Wise Automatic Payments

  • by Palani Swaminathan
  • June 25, 2014
Learn how to use business place functionality in an SAP Financial Accounting (FI) system to pay invoices branch-wise. Discover how business place can help a local branch of an organization meet its requirement to pay its own invoices through automatic payment programs for audit trails.
Learning Objectives

Reading this article you will learn how to:

  • Configure various settings for the business place functionality
  • Activate business place functionality at the country level
  • Set up business place as mandatory in an invoicing document
Key Concept
SAP introduced business place as a reporting entity below the company code level. Business place functionality is normally used in some countries (Brazil, Thailand, and South Korea) to report their value-added tax (VAT) on the local entity below the company code level. The local entity below the company code level is defined in the SAP system as business place.

Some organizations typically decentralize their payments for some of their regions. In my experience, I have seen some regions within an organization have a requirement to pay only their branch invoices for an audit trail. In a typical payment scenario, the accounts-payable (AP) clerk runs the payment program and generates the payment proposal. The AP manager then reviews the payment proposal and signs the same by taking a printout and authorizing the payment. The payment proposal signed by the AP manager is filed for an audit trail. There can be multiple branches for a single company, and each of the branches pays its own invoices through automatic payments.

I show you how to achieve branch-wise invoice payments using standard SAP configuration with validation.

I assume the readers of this article are well versed with SAP AP configuration, and I do not discuss automatic payment configuration in this article. Branch-wise refers to paying the invoices from the branch where they originate.

To achieve the branch-wise payments, you need to configure the following settings:

  1. Activate and define business place at the country level
  2. Maintain validation to make the business place mandatory in an invoice document
  3. Post an invoice with business place
  4. Run the automatic payment program with business place as an additional character

In my example I create a business place for each branch and include the business place in each invoice to segregate the invoice based on branch. I use the same business place as an additional character within the automatic payment program F110 transaction while running the payment to pay branch-wise invoices.


Palani Swaminathan

Palanichamy Swaminathan has 12 years of experience in banking, finance, and consulting. He has more than seven years’ experience in SAP systems with expertise in SAP FI, CO, PS, and JVA modules. He currently works with Accenture LLP and has been involved in multiple global SAP implementations, rollouts, upgrades, and support projects.

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