Uses of the Treasury Payment Program

  • by Mary Loughran, Independent Consultant
  • September 15, 2017
Learn about the different types of payments that can be made through SAP’s Treasury payment program.
Learning Objectives

Reading this article, you will learn:

  • Explanation of the functionality
  • Definition of new terminology
  • Uses of the Treasury payment program
  • Types of payments that can be made using the Treasury payment program
  • Different options for dual control on payments
  • A high-level view of how the Treasury payment program fits into the bigger picture
  • Configuration of the Treasury payment program
Key Concept
Treasury departments execute various types of payments, such as bank account transfers, trade-related payments, and one-off payments. These types of payments can be made by a treasury department using SAP’s Treasury payment program (formally named the Payment Program for Payment Requests).

People familiar with SAP applications are often familiar with the Accounts Payable (AP) payment program, but not everyone is familiar with the Treasury payment program, although there are features of the Treasury payment program that most companies could use to improve their processes in an SAP system. The Treasury payment program offers a very controlled, best practice process for treasury departments to follow. All functionality described in this article is standard SAP system functionality.

The formal name for this application is the Payment Program for Payment Requests, but I refer to it as the Treasury payment program.

Whereas the AP payment program pays AP and accounts receivable (AR) invoices, the Treasury payment program pays payment requests. Payment requests are open items made to the Payment Request Clearing Account, which is a suspense account configured to track Treasury payments. The same Payment Request Clearing Account number should be used across all company codes.

An obvious advantage of using the Treasury payment program is that the accounting entries for Treasury payments are made by the SAP system before the payment is executed at the bank, which is a more controlled and compliance-friendly process. Another advantage is the straight-through processing of the payment, meaning the payment details, such as the routing number and account number, are entered just once and flow through the SAP system before being sent to the banks. A third advantage is to have the system enforce strict controls around Treasury payments.

There are seven types of payments that could be run through the Treasury payment program (F111). They are:

  1. Bank-to-bank transfers
  2. Free form payments
  3. Business partner repetitive code payments
  4. Trade-related payments
  5. In-house cash (IHC) payments
  6. Loans Management (FS CML) payments
  7. Payments to customers and vendors

When you are making payments to customers and vendors using the Treasury payment program, the customer and vendor bank details are used, but the open invoice is not cleared.

The IHC payments, payments to customers and vendors using the Treasury payment program, and Loans Management modules are not as frequently used as the other types of payments listed above.

The functionality described in this article is included in SAP ERP Central Component (ECC), although licensing may be required to use the SAP Treasury and Risk Management module. SAP’s Transaction Manager module tracks Treasury trades through their full life cycle─from trade entry to payments to month-end processing to maturity of the trades. All accounting entries related to the trades are triggered by the trades and are posted directly to the SAP General Ledger. The article also mentions aspects of the SAP Bank Communication Management module, which may also require additional licensing. 

Mary Loughran

Mary Loughran has been specializing in the SAP Financials area since 1997 and has worked with numerous clients throughout North America and Europe in the areas of finance and treasury. She was employed as a consultant with SAP America and was a designated expert within SAP America for treasury before she left SAP in 2004. Mary’s expertise is in the areas of SAP Treasury and Risk Management, SAP In-House Cash, Liquidity Planner, Accounts Payable, payments from SAP in general, Cash Management, and Electronic Banking. Mary was an independent consultant from 2004 to 2016. 

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