Setting up Payment Method for ACH Payments

Automatic Clearing House, otherwise known as ACH is a method of making batch payments to vendors using an electronic network. It is governed by the National Automated Clearing House Association (NACHA) and the Federal Reserve. According to NACHA, around 4.11 billion transactions and approximately $9.1 Trillion were conducted via ACH during the third quarter of 2012. This method of making payments is increasing at an increasing rate and in my experience I have noticed more and more US companies transitioning from check payments to ACH.

Most US banks should accept ACH transactions; however, it is best to check with your bank. They will normally require a file to be uploaded into their system (which could be a secure portal or via their website). There are several types of ACH file formats, but I will concentrate on the commonly used one, which is ACH CTX.

In SAP, you do not need to do much configuration and setup to get things working with ACH CTX, and I will show you the steps that need to be taken below:

(1)    Create a payment method for ACH: Go to transaction FBZP and you can either create the payment method from scratch or use one that is part of the SAP template (usually the “T” payment method in the US). In the Payment method/Country section, choose the option “Use Payment medium Workbench” and select the format “ACH”.

(2)    Enter Company ID: You need to enter the company’s identification number (usually the Tax ID) in three fields: Firstly, go to transaction FBZP and click on the “House Banks” button; then for the relevant Company Code and House Bank, enter the Tax ID in the “Tax Number 1” field; Secondly, in the same screen, click on the “Data Medium Exchange” button and enter the Tax ID in the “Company Number” field; Thirdly, go to transaction OBY6, double-click on the relevant company code and go to the top-menu and choose “Environment -> Additional Information”, then page down and enter the Tax ID in the “Tax number USA (TIN)” field.

(3)    Create the ACH variant in the Payment Medium Workbench: GO to transaction OBPM4 and double-click on the Payment Medium Format “ACH”; then on the right-hand side of the screen enter a variant name in the “Sel. variant” field of the relevant company code and choose from the top-menu “Variant -> Edit Variant”. Then hit the “Enter” button, and in the ensuing screen, enter “ACH” in the “Payment Medium Format” field and hit the “Enter” button and save the variant. Then hit the back arrow to go back to the “Payment Medium: Selection Variants” field and hit the “Save” button.

(4)    Create Output Format: If you want to send out a remittance form to the vendor (to inform them that the payment has been made and what it is for) you will need to get the help of an ABAPer to create a custom form for this. You will then enter the form name in transaction FBZP, section “Payment Method in Company Code” and enter the form name in the “Form for Payment Medium” field. Note that you can choose to send the remittance advice as a form (in PDF format) or as an email. You should discuss the feasibility of these options with your ABAP person.


Once you have made the above settings you can enter the payment method for ACH in the vendor’s master record or in the invoice. When you have done the payment run, click on the “Printout” button (most people forget to do this with ACH payments), then choose form the top menu “Environment -> Payment Medium -> DME Administration, and the ACH file will be generated and ready to be sent to the bank.

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