Important Check Management Configurations in SAP

 
Although we are yet to determine, how the rapidly changing digital economy affects the use of checks as a form of payment, for now this form of payment is still an important medium used by organizations to pay their vendors and employees (among other things). It is also one of the payment methods supported by SAP.
 
In this post, we discussed important configuration steps involved SAP check management process.
 
Check Management
 
We use the check management functionality in sap, in a scenario where you prefer not to use the payment document number generated by the system as your check number; instead, you prefer an alternative numbering approach.
 
Check management Approaches
 
Two approaches may be used by organization in their check management process:
 
Pre-numbered Check
 
A pre-numbered check is the one that has the check number and the magnetic ink character recognition code (MICR) pre-printed on the check form. When using pre-numbered checks, care must be taken, to ensure that the check number generated by the system matches with the check number on the pre-numbered check form. This is necessary to avoid reconciliation issues between the check numbering as maintained in the system and the physical pre-numbered check form.
 
Blank Check forms
 
Unlike the pre-numbered check, the blank check forms do not have check numbers and MICR pre-printed on them. Whatever number is generated by the system (in accordance with the maintained check lot), is what is adopted as the check number. Consequently, reconciliation issues that might arise with the pre-numbered check approach is avoided.
 
Important Configuration Steps for Using Check as a Payment Medium
 
The following settings must exist in the system, before you can use check as a payment method.
 
1) You must have configured Check as a payment method at the country level.
For a detailed discussion on this, check this earlier post.
Configuring the payment methods in country
 
2) You must have defined check as a payment method for your company code.
For a detailed discussion on this, check this earlier post.
Configuring the payment methods in Company code
 
3) You must have configured check lots for the relevant house bank accounts
 
A check lot is simply a check number range defined in the system for the combination of a company code, house bank and a house bank account. For checkbooks issued by your house bank, a check lot (check batch) represents a number range interval between the first and the last predefined number.
 
For the configuration of check lots, follow the menu path below:
IMG — Financial Accounting (New) — Accounts Receivable and Accounts Payable — Business Transactions — Outgoing Payments — Automatic Outgoing Payments — Payment Media — Check Management — Define Number Ranges for Checks
Alternatively, use transaction FCHI
 

 
Enter your company code, house bank and house bank account.
 

 
Click on create.
 

 
Enter a check lot number and the check lot number range. You may also indicate the payment methods that will use this check lot on the payment method list field.
 

 
Save your entries. You just created your check lot.
 
If you are using pre-numbered checks, a number range for Checks in SAP represents a “lot” of pre-numbered checks.
 
A check lot may represent an individual physical checkbook’s number range, or number ranges of a group of checkbooks.
 
You may also create check lots based on a particular check number range and a location; if you are printing checks at different locations and would like each location to have its unique check number ranges.
 
4) You Must Have Defined Check Void Reason Codes
 
You define void reasons codes for selection during the process of voiding checks, if for any reasons you need to void a particular check. Checks may be voided because they were made invalid by mistakes, stolen, damaged, or for any other reasons.
 
Follow the menu path below to define void reason codes.
 
IMG — Financial Accounting (New) — Accounts Receivable and Accounts Payable — Business Transactions — Outgoing Payments — Automatic Outgoing Payments — Payment Media — Check Management — Define Void Reason Codes
 

 
5) You must have created a check variant.
 
Here we create our variant, and assign it to our company code, payment method and the relevant house bank account.
 
To create your check variant use transaction SE38.
 

 
Enter the Relevant program name, and click on variant.
 

 
Enter a name for your variant and click on Create.
 

 
Maintain all the relevant fields (example company code, payment method, house bank, house bank account and so on) and press enter.
 

 
Maintain other relevant attributes as necessary and save.
 

 
6) You must have assigned payment medium format to your payment method (check).
 
Assign the payment medium format to your payment method (in this case check).
 
Follow the menu path below for this.
 
IMG — Financial Accounting (New) — Accounts Receivable and Accounts Payable — Business Transactions — Outgoing Payments — Automatic Outgoing Payments — Payment Media — Make Settings for Payment Medium Formats from Payment Medium Workbench — Assign Payment Medium Format and Note to Payee to Payment Method
 

 
Double click on the payment method (check) to which you want to assign your format.
 

 
Indicate the category of payment (Outgoing or incoming payment) your payment method will be used for, select the payment method classification (check); indicate the accepted payment types to be used.
 
Assign your format as appropriate, depending on whether you are using the payment medium workbench or the classical payment medium program.
 
Save you settings.
 
With these settings, if you run the payment program (F110, F111), the system will know from your parameter selection, which variant to use (from your company code and house bank account selection), and from the assignment of payment medium format to payment method, will know which format the output will adopt.
 
 
 
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