Ach payment configuration

ACH Payment configuration SAP- ACH
Gmail:sureshbabu.fico@gmail.com 1 LinkedIn: Suresh Babu Muchinthala

ACH Payment configuration
Introduction:
An Automated Clearing House (ACH) Payment is a form of electronic funds transfer that provides
a secure, efficient method of receiving payment through the ACH Network. The ACH Network is
a batch-oriented processing and delivery system that provides for the distribution and settlement
of electronic transactions and payments among financial institutions.
ACH payments offer the following benefits:
 Eliminates the handling of paper checks
 Reduces any payment problems due to lost, stolen or misdirected checks
 Eliminates mail delays
 Provides for greater payment certainty for cash planning
 Provides an opportunity to electronically update and streamline your cash application and
receivables operations
 More effective and secure.
 Business can execute international transactions without having a foreign bank account
ACH format creates payment media for domestic payments in the USA. Incoming and outgoing
payments in US are supported.
ACH format is in accordance with version 004000 and conforms to the specifications of the
National Automated Clearing House Association (NACHA).
The National Automated Clearing House Association (NACHA) has worked with the Office of
Foreign Assets Control (OFAC) to amend ACH operating rules, minimize vulnerabilities in the
ACH network and prevent entities banned by OFAC from using the network as a conduit to send
or receive overseas funds.
NACHA Format Options: (i.e. CTX, CCD, CBR, PPD, POS, POP, PBR, IAT….etc)
In this document we will explain the creation of NACHA format file (National Automated
Clearing House Association) which need to be submitted to Banks for processing the ACH
(Automated Clearing House) transaction by CTX format
CTX Format – Corporate Trade Exchange is a NACHA format that incorporates multiple addenda
records that are structured in variable length fields. The addenda records are the remittance detail
for the ACH payment. The CTX Format is the suggested format as it is completely electronic and
therefore the most efficient.

A. Prerequisites/ Configuration steps:
I DME Engine configuration
1. Country Fields check
2. DME Configuration
II Payment Method/Bank Selection for Payment Program
3. Set Up All Company Codes for Payment Transactions
4. Set up Paying Company Codes for Payment Transactions
5. Set up Payment Methods per Country for Payment Transactions
6. Set up Payment Methods per Company Code for Payment Transactions
7. House bank creation
8. Set Up Bank Determination for Payment Transactions
III Make Settings for Payment Medium Formats from Payment Medium Workbench
9. Create Payment Medium Formats
11 Adjust Note to Payee
12 Adjust Payment Medium Format
13. Create/Assign Selection Variants
B. ACH Payment Procedural Steps (End User): (Before Payment execution, Vendor
masters, payment terms, Doc types, No ranges, Tolerance, & Posting periods steps
to be exits in the system
1. Vendor Invoice Posting
2. Display Vendor Line Items
3. Run automatic payment program by using payment method” A”
4. Validate the DMEE file as per NACHA & bank guide lines
5. Display vendor line items

I DME Engine configuration:
1. Country Fields check
SAP Menu Path SPRO→ SAP NetWeaver → General settings → Set Countries → Set
Country-Specific Checks
Transaction code OY17
For all countries with which your company maintains business relationships, you must include
rules for checking the following data:
 Bank data
 Postal data
 Control data
 This data is then checked during master data maintenance.
Standard settings: In the SAP standard delivery system, all countries are defined according to
the international ISO standard.
SAP recommendation: SAP recommends that you use the ISO standard for your additional
entries.
If your entries do not correspond to the ISO standard, you cannot implement data exchange in
international communication (e.g. payment transactions with banks).
Activities
1. Complete the check rules for the new countries.
2. Use the ISO standard for your entries.
3. For each country, maintain the associated detail screen. In the detail screen you should, for
example, store the check rules.

2. DME Configuration
SAP Menu Path
Transaction code DMEE
DME-Stands for Data Medium Exchange:
A data medium exchange (DME) is a data exchange file which is used to send payment information
of an enterprise to banks or tax authority. Basically these files contain financial data which can be
in flat file or xml file & IDoc format. Different File formats can be created for different countries
and different banks based on their own norm which replaces conventional ABAP programs.
DME Engine creation:
Tree type: Establishes the application for which a particular DMEE format tree is created. The
tree type determines which transfer structures are used when the DMEE format tree is called, which
then select the possible source fields that you can use when you define a DMEE format tree.
Format tree enter as free text, according to proper naming convention

SAP has provided quite sophisticated mapping options mechanism that allows you to populate
nodes in DMEE tree with necessary values flexibly, the following options:
 Segment groups: Segment groups are used for arranging segments. Segment groups can
be followed by these nodes: segment groups or segments. In most cases, a new level in a
DMEE tree begins with a segment group.
 Segment : A segment represents a record in the target file. In an active format tree, each
segment must have at least one composite or one element as a subnode.
If you created a segment that contains only segments and segment groups as subnodes, you
can convert the node to a segment group.
 Composite: You create a composite for the purpose of grouping elements. Such a
grouping is logical if, for example, one condition applies to several consecutive elements.
 Element : An element represents a field in the target file. For each element, you specify
with which value or from which source field this file field is to be filled.
If more than one mapping rule applies to an element - if the rules are dependent on
conditions or if different parts of the element are to be filled from different sources - then
you should define several atoms as subnodes of the element.

 Technical Node : A technical node is an element that is not output to the target file. It
stores values that are used in other tree nodes (elements, atoms) by reference to the
technical node. For this reason, a technical node generally contains a reference ID.
If you wish to output the contents of the technical node to the target file, then you can
convert the node to an element.
 Atom: You need to create an atom when you define more than one mapping rule for an
element.
 Selected node for detail view: This node was selected by double-clicking it. The details
displayed on the top right belong to this node.
All toolbar operations (delete, copy, and so on) apply to this node. In contrast, all operations
that you can select from the context-sensitive menu with a right mouse click refer to the
node which is currently selected by a single click.
 Reference ID of node : A node that contains a reference ID can be referenced from other
nodes in the format tree. You can specify such a reference when you define mapping rules,
conditions, or aggregation.
You must assign unique reference IDs (within the tree).
When you delete a node that contains a reference ID, be sure that no references to this node
exist.
 Reference to another node exists : This node contains a reference to another node.
Moving the node could result in inconsistencies since certain references are not permitted
in parts of the tree.
ACH Input File Structure: The NACHA format is composed of 94 character records. All records
and fields are required, except the record 7 - Entry Detail Addenda Record that is optional.
Record Title Description
Record
Type
Code
File Header Record
This record includes your company name and company number. It also
designates the immediate destination (LaSalle Bank N.A. or Standard
Federal Bank) of the entries contained within the file
1
Batch Header
Record
This record indicates the effective entry date (the date you request the
deposits/debits to be settled). In addition, this record identifies your
company and provides an entry description for the credit and debits in this
batch
5
Entry Detail Record
This record contains the information necessary to post a deposit
to/withdrawal from an account, such as recipient’s name, account number,
dollar amount of the payment
6
Entry Detail
Addenda Record
This record is optional. This record contains additional information
relating to the prior entry detail record. It is primarily used for CCD+ and
CTX, which are corporate to corporate transactions
7
Batch Control Total
This record appears at the end of each batch and contains totals for the
batch.
8
File Control Record
This record provides a final check on the data submitted. It contains block
and batch count(s) and totals for each type of entry
9

 NOTE: DME tree will be configured according to NACHA guidelines & Bank
specifications
Note:- Once DME tree is creaed according to NACHA guidle lines check & activate the tree .
NACHA Formate:
https://secureinstantpayments.com/sip/help/interface_specs/external/NACHA_format.pdf
Mapping Guide for 820 Payment Order/Remittance Advice
CTX 820 Sample
layout.xls

II Payment Method/Bank Selection for Payment Program:
3. Set Up All Company Codes for Payment Transactions
In this activity, you make specifications for all company codes involved in payment transactions.
SAP Menu Path Financial Accounting (New) → Accounts Receivable and Accounts
Payable → Business Transactions → Outgoing Payments → Automatic
Outgoing Payments → Payment Method/Bank Selection for Payment
Program → Set Up All Company Codes for Payment Transactions
Transaction code FBZP

4. Set up Paying Company Codes for Payment Transactions
Program → Set Up Paying Company Codes for Payment Transactions
Appropriate payment advice DME structure scripts are also maintained in the payment method
configuration.

5. Set up Payment Methods per Country for Payment Transactions
Program → Set Up Payment Methods per Country for Payment
Transactions
In this step, the regular payment medium workbench configuration settings have been maintained
for the new payment method in Country and Company Code (FBZP) referred to as ‘A’. The ‘Note
to Payee’ for a payment medium is dependent on a number of factors. It is used to cover the various
contents and structure requirements. The note to payee is assigned to a payment method for a
certain application area. The data origin which has triggered this payment is generally highlighted
in the note to payee configuration. In this case, the origin – together with the payment method –
determines the structure of the note to payee. The following Note to Payee are maintained in the
configuration in accordance to the specific requirement for this DME file:
FI-AP – Note to payee for payments of vendor invoices and credit memos (such as invoice number
and date)

Note: Payment Medium Format
You can control how the payment is made to the bank or the financial institution with the payment
medium format. In the case of payment media without documents (DME, IDoc, Internet payments)
the format controls the structure of the file or the message. A distinction is made between country-
specific and international formats. Formats can be changed and created in Customizing in Payment
Medium Format
Note to Payee by Origin

6. Set up Payment Methods per Company Code for Payment Transactions
Program → Set Up Payment Methods per Company Code for Payment
Transactions

7. House bank creation:
A. Bank key Creation
SAP Menu Path Accounting → Financial Accounting →Banks → Master Data → Bank
Master Record → Create
Transaction code FI01
B. Define House Banks
SAP Menu Path SPRO)→ Financial Accounting (New)→ Bank Accounting→ Bank
Accounts → Define House Banks
Transaction code FI12/FBZP

Bank Accounts:
8. Set Up Bank Determination for Payment Transactions:
Program → Set Up Bank Determination for Payment Transactions

Select the paying company code double click on ranking order folder
Ranking Order:
Bank Accounts:
Available amounts:

III Make Settings for Payment Medium Formats from Payment Medium Workbench
You make the settings for using payment medium formats from the Payment Medium Workbench.
Use the list of all payment medium formats to check whether the format you require is already
supported.
Examples
 SWIFT formats (MT100, MT200, MT202, and MT210)
 German formats (DTAUS0, DTAZV)
 Format for USA (ACH)
9. Create Payment Medium Formats :
You will need to create new payment medium formats if the credit institute (house bank) cannot
process one of the supplied formats and there is no alternative method of transferring the payment
orders (such as IDoc).
Example: The bank expects a data medium exchange format that is only valid for that bank.
Implementation is only possible after the format specification has been thoroughly analyzed to
establish the required characteristics of the format. Example:
 What is the name of the format, and where can it be used?
 Who is the recipient of the payment medium, and how are different files to be generated
accordingly? If the bank number field is contained in the format header, for example, a file
must be generated for each bank.
 In which fields of the format are entries made, and what are the relevant fields in the SAP
System called (structures FPAYH, FPAYHX, FPAYP)?
Outgoing Payments → Payment Media → Make Settings for Payment
Medium Formats from Payment Medium Workbench → Create Payment
Medium Formats
Transaction code OBPM1
Payment Medium Formats

Event Modules for Payment Medium Formats

Format Parameter Required Fields
Supplements for Payment Medium Formats
Text Fields for Reference Information
11 Adjust Note to Payee :
Note to Payee: A new “Note to Payee” is introduced for the payment medium workbench. It
suggests checking the following structures for the note:
Note to payee layout using Customizing
Note to payee layout using function module
As mentioned in the SAP note 1343600 the function module suggested therein –
“FI_PAYMEDIUM_ACH_DETAILS” was evaluated to see whether it would meet the
requirements. It may be noted here that this FM is used for processing payroll data. It was observed
that this FM was suppressing the generation of a particular piece of information in the final output

file – “no. of addenda record”. The payment process was attempted without this FM and was
observed that the missing information was now available.
Medium Formats from Payment Medium Workbench → Adjust Note to
Payee
12 Adjust Payment Medium Format:
Adjust Note to Payee
In this activity you can use Customizing and/or function modules to change a note to payee.
Use:
The note to payee that you configure in Customizing is made up of four line types.
The most important of these is type 1. This consists of the usual note to payee lines (with invoice
number, date, and amount, for example), as well as sub-types 5 and 6.
Type 6 controls whether control levels are to be created with the selected header in the various
company codes that are settled with this payment.
Type 5 specifies whether a text for the alternative payee - if one exists - is to be created as a header
for the whole note to payee.
Note to payee line
Types 2 and 3 specify the internal (payment document number, for example) and external (account
number in the business partner's accounts, for example) references respectively.
Under
Type 4, you specify what sort of note to payee is to be created if the space defined by the format
is not sufficient and a payment advice note is created. The payment advice note thus replaces the
specifications under type 1.

Example:
You can change an existing note to payee via Customizing by including other text symbols. You
can display the available symbols using possible entries.
You can use function modules to include additional logic which allows you to produce a different
note to payee dependent on certain entries.
Recommendation
You can generally use the notes to payee provided by SAP. You should only make changes if these
notes to payee do not meet your requirements.
It is possible to test an existing or newly-created note to payee. To do so, select Preview in
Customizing for the note to payee layout. After entering the format you intend to use, you can use
this preview function to determine whether enough space is provided by this format.
Medium Formats from Payment Medium Workbench → Adjust Payment
Medium Format

Code page: The 4-character name of an SAP character set as defined in SAP character set
maintenance.
The following explains the naming convention in more detail:
First digit: Code
0 EBCDIC character sets
1 ASCII character sets
2 mixed single byte / double byte character sets
4 double-byte character sets
6 mixed character sets
8 double byte and multibyte character sets
9 reserved for code pages you define
Second digit: Country
1-3 countries that use the Latin alphabet (Western Europe, North and South America, Australia,
Africa)
4-6 countries that use non-Latin alphabets and writing systems (Eastern Europe, Asia, Arabic
countries in Africa)
7-9 reserved for special languages
Third and fourth digits: Sequential number

13. Create/Assign Selection Variants:
In this activity you can create and assign selection variants for a format. Selection variant
maintenance is a requirement for automatically scheduling the payment media of the Payment
Medium Workbench in the payment program.
Activities
1. To assign a selection variant to a format, double-click the required format to select it on the left
side of the screen The payment medium format is displayed on the right side of the screen.
2. Use the possible entries button (F4) to display the existing variants in the Selection variants
field. Select the required variant.
3. You can create an appropriate variant by choosing Variants -> Edit variants, or via the icon.
When you select this function, the selection screen of report program SAPFPAYM appears. Enter
the required selection criteria on this screen, maintain the attributes, and save the variants. You
return to the screen for maintaining selection variants for payment medium formats via Back.
4. Save the selection variant assignment.5. Transport the selection variant assignment by choosing
Variants -> Transport All.
The payment program is run using a variant which needs to be maintained for the ACH payment.
This variant is maintained for the particular Company Code and the House Bank from which
payment needs to be made. In this example payment is made using sample Company Code –
0008 and sample House Bank – Wells Fargo. Thus in OBPM4 screen variant V_ACH is
maintained accordingly.
While maintaining the payment medium format the system asks for the Corresponding Bank
Information to be maintained simultaneously
The important parameter is “Company Identification” which is generally the tax number or some
other free number used by the company. One particular identification number is agreed between
the company and the bank. The pre-agreed information is populated real time in the output DME
file during program execution.
Along with the maintenance of the payment medium format some other important parameters are
maintained simultaneously as shown below:
 Data Medium Exchange
 Payment Summary
 Error Log
 Appropriate file path for the output file storage
 Form for the payment medium

Medium Formats from Payment Medium Workbench → Create/Assign
Selection Variants

B. ACH Payment Procedural Steps (End User): (Before Payment execution, Vendor
masters, payment terms, Doc types, No ranges, Tolerance, & Posting periods steps
to be exits in the system
1. Creation Vendor Invoice :
SAP Menu Path Accounting→Financial accounting→ Accounts Payable →Document
Entry → Centrally → Invoice
Transaction code FB60
Document 1900000000 in the company code 0008
2. Display vendor line items:
SAP Menu Path Accounting→Financial accounting→ Accounts Payable →Account →
Display/Change Line Items
Transaction code FBL1N

3. Run automatic payment program by using payment method” A”:
SAP Menu Path Accounting→Financial accounting→ Accounts Payable → Periodic
Processing → Payments
Transaction code F110
4. Validate the DMEE file as NACHA guide lines:
SAP Menu Path Accounting→Financial accounting→ Accounts Payable → Periodic
Processing → Payments
Transaction code F110
To down load the file: from the Menu Environment  Payment medium DME
administration

Select the File and save the Output File.
File :
5. Display vendor line items :
SAP Menu Path Accounting→Financial accounting→ Accounts Payable →Account →
Display/Change Line Items
Transaction code FBL1N

Reference:
https://help.sap.com/doc/0cf0d353ca9f4408e10000000a174cb4/3.6/en-US/frameset.htm
https://help.sap.com/doc/c301c95360267514e10000000a174cb4/3.6/en-US/frameset.htm
https://blogs.sap.com/2017/02/07/format-specific-structure-in-dmee/

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