Payment Blocks
Definition:
A Payment Block in SAP is a payment restriction tool used to temporarily or permanently block payment processing for selected invoices or vendors.
It can be assigned to financial documents like invoices, credit memo, or debit memo, and may be utilized to restrict payments either through automated system settings or manual intervention by an authorized user.
Categories of Payment Blocks:
Manual Payment Block:
A user manually intervenes to block a document, preventing payment until further review or approval.
Illustration: A payment may be blocked if there is a dispute with the provider over the fees or quality of the services or goods delivered.
Automatic Payment Block:
The system autonomously initiates a payment block based on configured guidelines.
For instance: When there are inconsistencies in the invoice, including incorrect amounts or missing goods receipts, the system has the ability to immediately block payments.
Payment Block Codes:
SAP provides a range of block codes or causes, including:
R: Block for manual review
A: Blocked due to missing approval.
W: Blocked for workflow-based approval.
Configuration of Payment Blocks in SAP:
Method 1: Block Payment During Invoice Posting (MIRO Transaction)
Go to Transaction Code: MIRO (for Invoice Receipt).
Vendor invoices are entered and verified using this.
Enter the Invoice Data:
Vendor, Invoice Date, PO Number, Total Amount and Tax Information
Payment Block Selection:
In the "Payment" tab of the invoice screen, you can manually set a payment block
In the Payment Block field, select the block reason (such as R for "Manual Payment Block" or other block codes depending on your configuration).
Save the Invoice:
Save the invoice after completing all the required fields and choosing the payment block.
This invoice's payment has been blocked; until the block is manually lifted, it won't be handled during the subsequent payment run.
Method 2: Manually Block Payment After Invoice Posting (FB02 Transaction)
Go to Transaction Code: FB02 (Change Document).
You can use this to edit a document that has already been posted.
Enter the Document Number:
Enter the number of the document (invoice, credit memo, etc.) you want to block.
Go to the Payment Tab:
Select the document line item where you want to apply the payment block.
Apply the Payment Block:
Choose a payment block explanation (such as R for manual block) in the Payment Block box.
Other payment block codes may be configured in the system (such as approval needed, price discrepancy, etc.).
Save the Changes:
Once the block has been applied, the payment for the document will not be processed until the block is removed.
Method 3: Block Payment Using Vendor Master Data (FK02 Transaction)
Go to Transaction Code: FK02 (Change Vendor Master).
If you wish to stop payments for an entire vendor rather than just one particular document, use this procedure.
Enter Vendor Details:
Enter the vendor number and company code.
Navigate to the Payment Transactions Tab:
Under the Payment Transactions section, locate the field for Payment Block.
Apply Payment Block:
Enter the payment block reason (such as R or other available block codes).
Save the changes.
This will halt payments for all subsequent invoices from this supplier until the block is lifted.
Method 4: Define Tolerance Limits (OMR6 Transaction) (Automatic Payment Blocks)
If the difference in quantity or price between the goods receipt, invoice, and purchase order beyond the specified limitations, tolerance limits can be set up to automatically block payments.
Go to Transaction Code: OMR6
This is used to define the tolerance limits for invoice verification.
Select Tolerance Key:
The system provides various tolerance keys. The most common keys used for automatic payment blocks are:
PP (Price variance percentage) – Sets tolerance limits for price discrepancies.
BR (Quantity variance) – Sets tolerance limits for quantity discrepancies.
BD (Amount variance) – Limits for total amount differences.
Configure the Tolerances:
Set your required tolerance limits for each key.
For example:
PP (Price variance percentage): 2%
BR (Quantity variance): 3%
Save the Settings:
Once the tolerance limits are configured, save your changes.
Method 5: Automatic Payment Block During Invoice Verification (Invoice Processing MIRO)
During invoice verification (using MIRO):
When an invoice exceeds the permitted deviation in price or quantity, the system will automatically apply payment blocks once tolerance limits have been specified.
The block is then removed only when the discrepancy is resolved or manually overridden.
Removing a Payment Block:
Use the same procedures to remove the block, and either choose a valid code for no block (None or blank) or clear the Payment Block field.
After removing the block, the document can be processed in the Automatic Payment Program (F110).
Abridgment:
Invoice Amount: ₹50,500
PO Amount: ₹50,000
Price Variance: ₹500 (5%)
Tolerance Limit Set to: 2%
Automatic Payment Block Applied: Yes, due to the price variance exceeding the tolerance limit.
Block Type: R (Manual Review)
The example demonstrates how an invoice can be automatically blocked for payment if it exceeds pre-configured tolerance limits, ensuring discrepancies are resolved before payment is made.
