Explaining Supplier Master Data Fields relevant for Payables Management

It is time for Jennifer to take a closer look at the settings available in the supplier master record.

It is important to notice that the fields available in a supplier record are determined by the configuration of the system. This means that, for example, depending on the grouping used for the supplier creation, a zone can be mandatory in some cases, optional in other cases, or may even be hidden.

In the General Data of the business partner, we find the settings that belong to that partner and that are shared and available across all the company codes of your group. For example, the telephone number of the supplier. This means that if an update is made to this number, it will be immediately available to all the companies using this supplier.

In the General Data, we find among other settings:

• Address: Its completeness might be a requirement to perform certain payments process - for example, check payments.
• Language: Will determine the correspondence language with the partner.
• Bank Accounts: Required in case of bank transfer payments.

Jennifer is now going to review a summary of the supplier data maintained at the general data level:

Jennifer can now have a closer look at the bank setting at the general data level of the business partner.

The supplier bank accounts belong to the General Data settings of the supplier and therefore they are shared across all the companies using the supplier. Since this is very sensitive information, specific authorizations might be required to manage it: only authorized users will be able to edit the bank details of the suppliers.

In this case, a new bank, identified by the Bank Key, might be required that is not yet created in the Bank List of SAP. To facilitate the process, the system will prompt the user to complete the missing bank details and will create a new bank on the fly. The Bank list will then be automatically updated without needing to go through a specific transaction.

To facilitate the bank creation process in the business partner record, it is possible to derive the bank from the International Bank Account Number (IBAN). Conversely, it is possible to generate an IBAN proposal when all the bank account details are completed in the system.

Several banks can be associated with the supplier. Depending on the customization of the payment program, SAP S/4HANA will then decide which bank to use to proceed with an automatic payment.

• Improved data accuracy and consistency: By maintaining bank keys as part of the supplier master record, businesses can store and maintain accurate and up-to-date bank information for each supplier. This helps you to reduce inconsistencies and inaccuracies in financial data, thereby improving overall data quality in the system.
• Centralized data management: Creating bank keys in the supplier master record enables centralized management of supplier bank information. This makes it easier for procurement, finance, and other relevant teams to access and update supplier banking details whenever needed, reducing the chances of data discrepancies across systems.
• Reduced lead times for payments: As bank information is readily available in the supplier master record, payment processing lead times can be reduced. This helps in timely payments to suppliers and maintaining healthy working capital cycles for the business.

Review now with Jennifer how to set up the payment transaction tab in the supplier master data:

Jennifer is ready to review now the supplier settings at the company code level.

In addition to the business partner's general data, each company using it as a supplier has been declared under the corresponding FI supplier role. At this level, it is possible to define the settings of this supplier at company code level.

Under the company code, we key find the key settings grouped in the Finance tab:

• Reconciliation account: This is the G/L account representing the Accounts payable subledger in the Balance Sheet.
• Payment terms: This will be automatically defaulted on the supplier invoices generated by the accounting department. It can then be modified.
• Check double invoice: SAP will issue an alert whenever identical invoices are entered.
• Credit memo payment terms: This will be defaulted automatically to credit memos.
• Payment methods: Defines what payment methods are accepted by the supplier.
• Payment block: This is used to block any payment to the supplier.
• Alternative payee: These payments will be addressed to this alternative payee.

Jennifer can now summarize the supplier master data at the company code level as follows:

Jennifer is particularly interested on the functionality to check for double invoices in SAP S/4HANA.

If this option is activated at a supplier master record level, the system will check for duplicated invoices of that supplier. Each new invoice will be compared against the invoices already existing in the database by matching the following fields:

• Reference document number
• Company Code
• Supplier
• Currency
• Document Date

If the Reference document number field is left empty, the system will additionally match the Amount in document currency.

When a duplicated entry is detected, the system will generate a Warning or an Error message, depending on the configuration implemented by each company. The user has then to validate the Warning or to correct the data indicated in the Error message in order to be allowed to save the invoice.

The possibility of adding an alternative payee to a supplier master record seems very useful to Jennifer. Let’s find out more.

In some cases, a supplier may define an alternative payee as the recipient of payments processed through the automatic payment program. This could happen when a local branch of an organization provides services for better reactivity, but all payments must be made to their head office using a bank transfer.

To set this up in SAP S/4HANA, both the local branch and the head office should be created as business partners, with the head office's bank account details also provided. Then, in the local branch's master record, the alternative payee field should be completed with the head office's business partner number. As a result, when the local branch's open invoices are processed for payment by the automatic payment program, the funds will be transferred to the head office's bank account.

It is possible, if authorized on a supplier's master record, to allow the entering of payment details (address and bank information) directly on each of its documents during manual entry. However, due to the potential impact on security, this option should be used with caution.

Additionally, a list of alternative payees can be specified in the supplier master record from which the user can choose during document entry. This limits the risks of error or misuse.

Let’s have a look to the alternative payee indicator in the system.