Configuring Payment Methods for Payment Program

Let's look at the Payment Methods settings. This is a key step in properly customizing our payment program. Let's begin with the settings for the "Payment Methods for Each Country/Regions for Payment Transactions".

In "Payment methods in the country", all payment methods are listed that can be used within a country. There are various payment methods assigned to a country. The SEPA methods are irrelevant for the USA because SEPA payment instruments are only available for the SEPA region.

Additionally, you can configure more detailed settings for a payment method. Here, we can define whether this method can be used for outgoing or incoming payments. We can also see the classification of the payment method, whether it is a bank transfer, check, or supplier financing. Another key setting is the "necessary information in the master record". If we want to use this payment method then the necessary data must be included in the respective master data, e.g., bank details, IBAN, or address data. We can also see in the "posting details" section, the document type for payment. Here we have the customizing settings that the system should use this document type for the generated booking.

Note the "Payment Medium" setting. This setting defines how to handle the payment medium and which format or format supplements should be used when creating the payment medium using the payment medium workbench. We do not need explicit additional payment carrier programs for the different payment methods, but we can initiate all formats uniformly for all payment methods via the PMW. Click Format Settings to enter additional format settings. The payment slip is generated separately, according to fields like for example the company code and house bank. You can initiate the payment method, as an automatic payment run, for several company codes. If we want to use several company codes within one payment run, the system will create a separate payment medium for each company code and each house bank.

You can also assign a permitted currency to the payment methods. For example, SEPA transfers and SEPA direct debits are only allowed for the euro area. If you enter "euro" as the currency, the system recognizes that it cannot settle foreign currency amounts using this payment method, e.g. invoices recorded in US dollars. Then, you would receive a corresponding item in the payment proposal with this exception list. You would also receive an error - the system will read that the currency for settling the individual item is not permitted for this payment method.

The same applies to the permissible destination countries. You can designate which countries to use with this payment method and the target country.

The "Note to Payee Origin Customizing" is a functionality within the SAP system that allows businesses to specify the contents of the note or message that accompanies the payments made to suppliers or vendors. This is often customized to include information like invoice numbers or other references to help the payee identify the transaction. These settings enable the business to determine the format and content of these notes based on their unique operational needs. SAP also offers standards for different payment methods. (like SAP SEPA for SEPA transfers).

The Customizing Setting Permitted Payment System for Payment Method refers to the configuration that allows certain forms of payment to be processed through specific payment systems. This setting ensures that the chosen payment methods are compatible with the utilized payment systems, providing control and efficiency in executing payments. Through this customization, a company can define which payment systems will process which payment methods.

In this video, we will look at identifying payment methods per country and region settings for the automatic payment run. We will cover:

• Understanding and analyzing payment methods specific to countries/regions.
• Navigating and configuring payment method settings.
• Utilizing payment medium and compliance settings.

This video explains how to manage country-specific payment methods without creating new ones, focusing on existing setups. Start by navigating to these settings through the Implementation Activities app under Payables and Receivables Management → Payment Processing → Company Initiated Payment and Clearing → You use automatic payments and payment media formats → Set Up Payment Methods for Each Country/Region. Payment methods like bank direct debit and SEPA direct debit are specific to Germany and vary by country. SEPA methods, for instance, are only relevant to the SEPA region and not the USA.

To configure a payment method, double-click its name, such as SEPA Credit Transfer, to set it for incoming or outgoing payments and review its classifications. Ensure the system checks bank details and for example the necessary IBAN and SWIFT codes. Use the Payment Medium Workbench to create payment media, like the SEPA Credit Transfer CGI_XML_CT format, which can be used internationally.

Specify format settings during payment media generation, with media created per company code and house bank. Define permitted currencies (e.g., euros for SEPA methods) and destination countries. Non-compliance produces errors. You can add notes to payees and specify allowed payment systems.

See corresponding payment methods within Payment Methods per Company Code. To use these payment methods for our company code, we need to define their assignment to the respective company code. To assign a new payment transaction to a company code, details such as the company code, name of the company code, location (City), payment method, and payment method name need to be entered. See a detailed overview in the following section.

Minimum and maximum payment amounts: Any payment amounts lower or higher than the minimum or maximum amount will be excluded from the payment run.

Distribution into Payments up to a Maximum of this Amount: Specifies that payments exceeding this amount will be reviewed to see if they can be divided into multiple payments, each totaling no more than this amount.

• Foreign business partner allowed (address): Select this option to process foreign customers and vendors using this payment method.
• Customer or vendor bank abroad allowed (bank country): Select this option to permit international customer and vendor banks to process payments.
• Foreign currency allowed: Select this option to use foreign currency with this payment method.

• Single payment for marked items: Items that use this payment method are paid individually. If an item does not contain a payment method, it can be grouped with other items.
• Payment per due day: This option specifies that items due on the same day are paid with a single payment.
• Extended individual payment: Payments in a group are settled individually based on rules. However, only credit memos with invoice references can be used for individual payments; those without references cannot be used.

• No Optimization: No optimization occurs during the selection of the user's bank and the bank of a business partner.
• Optimize by Bank Group: Here, you can instruct the system to improve the payment process by selecting the best pair of banks for your and your customer/vendor's transactions. Banks will be grouped, and the system will aim to choose two banks from the same group for payment optimization. You can assign the bank group in the bank master data.
• Optimize by Postal Code: Here, determine the payment program that pays from the nearest bank to the customer/vendor's city. You can assign a postal code range to a bank, allowing the program to issue checks from different banks based on the customer/vendor's city.

Form Data: Form Data refers to specific information and settings related to payment forms. This includes details such as form design, content, and layout. It allows customization to meet the specific needs of a company's payment process. Users can define the look, information, and format of the payment form. Sort variants can be predefined for payment transaction correspondence. In the Form Data area, the user can specify the name PDF form for the payment media, which affects the production of a correspondence letter in a PDF format during the payment run. This feature can be useful when generating automatic payment advice, reminders, or dunning letters.

Payment Advice Note Control: Payment Advice Note Control is used to manage and oversee the payment advice notes. Payment advice notes provide detailed breakdowns of payments, including information about paid invoices and deducted credits. Use the configuration to set the rules and conditions for generating these advice notes. Control settings can determine factors such as the format of the advice note, the included information, and the system's automatic generation timing.

In this video, we will look at identifying payment methods per company code settings for the automatic payment run. We will cover:

• Understanding and Configuring Payment Method Settings per Company Code.
• Setting Specific Attributes for Payment Methods within a Company Code.
• Managing payment preferences and control information.

Review the payment method settings for each company code by navigating through the Implementation Activities app under Payables and Receivables Management → Payment Processing → Company Initiated Payment and Clearing → You use automatic payments and payment media formats → Set Up Payment Methods per Company Code. Ensure the payment method is permitted in the relevant country. For SEPA credit transfer in company code 1010, set minimum and maximum amounts, allow foreign partners if needed, and define payment grouping and bank selection preferences. Access form and payment advice controls, noting no restrictions on payee's note lines and always generating payment advice.