We are accustomed to manually developing and tracking payment plans as an accounts payable (AP) accountant. When did you discover how much time this repeated task actually costs us and that perhaps there is an automated solution that can help us to make it simpler? — Yes! For you, the Manage Payment Plans app is available to simplify the procedure. I want to demonstrate the primary applications of Manage Payment Plans in this blog post, as well as how to use it and how a payment plan is carried out in practise.

Content Synopsis

Manage Payment Plans: What Is It?

Several Common Use Cases

Implementing Manage Payment Plans

How a payment plan is carried out

Manage Payment Plans: What Is It?

The Manage Payment Plans software is made to allow for the centralised control of a variety of payment runs, including irregular ones that follow a custom calendar as well as regular ones that run on a daily, weekly, and monthly basis.

As an AP accountant, you have the ability to construct payment plans for various company codes and payment methods and categorise them in accordance with your predefined payment plan categories (e.g. differentiation between domestic and international payments). To create a payment schedule that runs on arbitrary days, you can create your own personalised calendar. If you want to increase the amount of goods that will be included in a payment run, you can also decide to move the next posting date back by a specific number of days. Another option is to reschedule an active payment plan that still has some tasks to complete. You no longer need to manually and repetitively establish payment plans and payment runs thanks to this app’s wide range of applications and versatility.

I need some examples of usual use scenarios.

Of course! The Manage Payment Plans tool allows you to define bespoke payment plans, manage payments centrally, and handle some unique payment requirements. I’ve included a few use cases below that demonstrate how this software can make your payment plan procedures more efficient.

Use case #1: Centrally developing and overseeing payment schedules for subsidiaries

Let’s say you work as an organization’s AP accountant. In the past, you had to centrally generate and distribute payment plans to the corresponding subsidiary businesses. Using the information from the payment plan, the subsidiaries’ AP accountants manually build payment runs. This activity needs quite a bit of human labour and time, especially for a large company with a complicated payment procedure involving numerous payment methods, payment dates, and other factors.

By defining the payment method, company code, supplier, and client, as well as a highly personalised payment schedule, you can centrally construct payment plans for the subsidiary firms using the Manage Payment Plans app. Payment run jobs will be created in the Schedule Accounts Payable Jobs app following the confirmation and activation of a payment plan for a particular subsidiary. You can view the payment plan’s status, anticipated start time, job log, and other details. The AP accountants from the subsidiary companies no longer need to manually construct payment runs because the planned jobs run automatically.

Use example #2: Creating a payment schedule using a personalised calendar

If the standard payment plans are inadequate to meet your needs, you can alter them using the associated configuration activity, Define Payment Plan Customized Calendar. By defining a number of payment run dates and run sequences, you can create your own payment calendar. In the Manage Payment Plans app, when you create a payment schedule, you can select your personalised calendar.

Use case #3: Delaying the date of the subsequent posting by a specific number of days

When you set a payment schedule, you may often indicate which day will serve as the posting date for a payment run. You can select from up to a dozen choices, such as the run date, the run date plus X days, the first day of the current month, etc. However, there are times when you might need to obtain money from your clients or pay your suppliers before the agreed-upon deadline.

You can add more open items in the following payment cycle and make the payment in advance by specifying to move the next posting date forward by a set number of days.

How should Manage Payment Plans be used?

1. Complete the general data form
The name of the payment plan, the payment method to be utilised, the company code for which the plan is established, the payment run ID, and the payment category are all considered to be general information.

  • Financial Category

You can designate a category when creating a payment plan. By using the setup activity Define Payment Plan Categories, you can categorise your plans in this manner depending on certain categories. For instance, you could designate a category to all the payment plans for a particular company code. Additionally, you can distinguish between domestic and foreign payments using categories.

For instance, using the setup activity Define Payment Plan Categories, I define the following categories for my payment plans:

What Is a Payment Plan Category

When I create a payment plan in the Manage Payment Plans app, I may select from a list of available category options and associate the category with the payment plan.

Select an Existing Category

  • Run ID for Payment

A payment run can be distinguished from others by its Payment Run ID. The payment run’s identifier can be seen in the Parameters section of a job’s data when you review the details of a payment run.

When defining a payment plan, you can manually assign a payment run ID. An ID of five alphanumeric characters will be generated automatically during the payment process in the absence of an explicitly specified one. The ID that was generated automatically is defined as follows:

  • If a category is given to the payment plan, the name of the category is the first three characters. Alphanumeric characters created at random make up the final two.
  • The five characters are all created at random from alphanumeric characters if a category is not designated to the payment plan.

For instance, I add the payment run ID “DEMO1” to the payment plan “DemoPlan,” and this ID appears as the payment run ID in the Schedule Accounts Payable Jobs app.

Manually Assign an ID

Definable ID

In contrast, if I don’t specify a payment run ID or give the payment plan a category, a random ID will be created during the payment run.

Without Assigned ID

A Number Generated at Random

Identifier for the BCM and Payment Run

The payment run id, which must be reserved as the identification for Bank Communication Management (BCM) in advance, identifies payment runs that are intended for Cross-Payment Run Payment Media. Please make sure that the prefix of the payment run ID (the first three letters predefined with the configuration activity Define Payment Plan Categories) is compatible with the identifier defined in the view Reservation for Cross-Payment Run Payment Media if your payment run generated by the payment plan is intended for BCM.

Cross-Payment Run Payment Media Reservation

2. Pick your vendors and clients
Select the vendors to whom you wish to pay or the clients from whom you want to collect payments. You can use an asterisk (*) to select all of the suppliers or customers, or use the search help to identify the suppliers or customers.

Selective Customers and Suppliers

3. Define the terms of the payment schedule.
For the recurring pattern, recurrence range, and date specifications, you define the necessary parameters. I’ll describe a few of the most significant ones to you in the paragraphs that follow.

  • Type of Recurrence

For irregular payment plans, Recurrence Type offers a customised calendar option and specifies how frequently the regular payment plans should occur. Regular payment schedules might be weekly, daily, or monthly in length. By defining the recurrence frequency, you may also construct a plan that executes every two, three, or four days, weeks, or months. In order to create payment plans that run on arbitrary dates, you can also use your own custom-made predefined calendar.

  • Range of Recurrence

The payment schedules may be based on various areas’ industrial calendars. When you set up a payment plan, you may select the appropriate factory calendar and indicate whether to conduct a job on a non-working day or defer it to another date. If you use a customised calendar, keep in mind that while defining the start date and end date of the plan, the end date must come after the final payment run date.

  • Date Information

The posting date, the documents entered on which dates to include in the payment run, and whether you wish to change the next posting date are all specified here.

  • Change in Next Posting Date

You can indicate here if you wish to forward the date of the following posting forward by a specific number of days. You can broaden the range of goods covered by each payment run in this way. When you need to pay your suppliers in advance of the due date, this may occur. After that, I’ll demonstrate how you may use this parameter using an example payment schedule.

Let’s say I work as an AP accountant who handles payments. I develop a weekly schedule to pay my suppliers on Tuesday and Friday each week. The strategy runs from July 1 to July 31. I specify that the next posting date will be shifted by six days and choose the run date as the posting date for each payment run.

Postpone the next update by six days.

The payment runs are carried out every week on Tuesday and Friday to choose the past-due invoices. The next run date will be the next posting date of the next payment run if I don’t change it.

With no shift, the following posting date

The invoices that are due by July 5 will be posted upon the payment run on July 5 because I’ve set the posting date to be the same day as the run date in my payment plan. After the payment run on July 1, the next posting date would be July 5.

In comparison, the figure below displays the publishing dates when I move the subsequent posting date forward by six days.

New Posting Dates that Have Changed

Following the payment run on July 1, the next posting date would be moved six days later, to July 5, from the intended next posting date. In other words, the next posting date has been changed to July 11, which implies that any invoices that are due by that date will be posted on the payment run on July 5 for those that are due by July 14 for those that are due by July 8 and so on. The range of invoices that can be chosen for each payment run has increased when we contrast it with the situation where the posting date has not changed. You are able to pay your suppliers in advance in this method. In some circumstances, this might be required, but please be aware that your cash flow will be restricted.

The next posting date cannot be changed if you use a customised calendar to set your payment plan.

How is a payment schedule carried out?

A draught payment plan is inactive once it is generated. There won’t be any paid run positions created. The plan is always editable.

Payment run jobs will be created in the Schedule Accounts Payable Jobs app when a saved draught plan is enabled. When the jobs are scheduled to run, payment will be generated. In the Manage Automatic Payments app, you may view the completed payments.

You might want to adjust a plan’s parameters sometimes. It must be turned off before any modifications may be made.

A plan becomes inactive once all of its scheduled payment runs have been completed. There won’t be any new employees or operations. By modifying the parameters in accordance with your needs, you can reuse it.

An illustration of a payment plan’s lifespan may be found below.

The progression of a payment plan

I hope you have learned the fundamentals of the app Manage Payment Plans from this blog post. As of SAP S/4HANA Cloud 2111 or SAP S/4HANA 2021, the app is accessible. Do you wish to learn more about this app? Check out the SAP help portal’s documentation:

Manage Payment Plans (for releases of SAP S/4HANA Cloud)

Manage Payment Plans (for releases of SAP S/4HANA).

Please give me some input. So please leave a remark and let me know what they are. Additionally, if you have any additional questions, please feel free to post them in the SAP Community’s Q&A section. Remember to use the appropriate tags. Please follow Sharon Zhang to receive the most recent information if accounts payable and accounts receivable continue to interest you.