Cash Management & Liquidity Forecast

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Cash Position & Liquidity Forecasting


SAP Cash Management

SAP AG

Problems and Objectives

1. Ensuring optimum liquidity formaturing obligations

2. Preparing and transferring short,medium and long-term funds atmaturity

3. Control over incoming and outgoingpayments

4. Information on managing short-termcash investments or borrowings

1. Too many bank accounts

2. Accounting by value date is required

3. Unreliable planning tools

4. Investment instruments not used totheir fullest potential

5. Lack of payment strategy

ConclusionConclusionAll necessary information must be

accessible in the cash management system.

Business ObjectivesBusiness ObjectivesCurrent ProblemsCurrent Problems


Business BenefitsPurchasing SalesCash Management

Improve cash forecasting

Manage credit exposure by credit partner

Reduce dispute costs

Streamline payment process

Reduce time and cost to review and pay invoices

Improve account & invoice reconciliation

Control the timing of payments and management of outbound cash flow

Take advantage of discount terms

Tight integration between A/P, A/R, G/L, MM, SD

Business View – Cash Management

Purchase Order

Cash Position

Liquidity Analysis

Sales OrderSales Order

Invoice

Payment

InvoiceInvoice

Account Statement

PaymentPayment

Cash Concentration


FunctionsSAP Cash Management – reflects all cash-related transactions entered in SAP, such as purchase order, sales order, accounts payable, accounts receivable, and bank accounts.

Cash position – proof of position report. Shows bank accounts and expected incoming and outgoing cash. It presents a short-term cash position view of up to one week.

Liquidity forecast – cash forecast report. Interface with other SAP components, such as SD and MM, to show

expected future cash flow. It presents a mid-term liquidity view for up to 24 weeks.


Cash Management


SAP Cash Management - Reporting

Cash Position Liquidity Forecast

Bank accountsBalances

Cashin transit

Investments, Debt and Hedging

Operations

Trading

LiquidityLiquidityManagementManagement

Market information

Managing external cash balances and obligations Multi-Bank simplification and standardization Drill down functionality


Cash Management

SAP AG

Tools

InstrumentInstrument DataData Time FrameTime Frame

1.1. Cash management Cash management positionposition -- bank accountsbank accounts -- by value date by value date -- bank clearing accts bank clearing accts 0 to 5 days 0 to 5 days

-- payment advices payment advices

2.2. Liquidity forecastLiquidity forecast-- projecting cash projecting cash -- accounts receivableaccounts receivable inflows/outflows inflows/outflows -- accounts payableaccounts payable 1 to 24 weeks1 to 24 weeks-- taxes taxes -- FI, MM, SDFI, MM, SD -- planned itemsplanned items


Cash Management

SAP AG

Features

ØØ Bank balances by value dateBank balances by value date

ØØ Parallel management of foreign currenciesParallel management of foreign currencies

ØØ Automatic revaluationsAutomatic revaluations

ØØ Cash position covering the next few daysCash position covering the next few days

ØØ Automatic payment using expected value daysAutomatic payment using expected value days

ØØ Control over cashed checksControl over cashed checks

ØØ Liabilities for down paymentsLiabilities for down payments

ØØ Individual planningIndividual planning

Cash Management PositionCash Management Position


Liquidity Forecast

SAP AG

Features

Projecting receipts and disbursements from FI, SD, MM, andTM

Individual planning and planned items

Automatic maintenance (reversal, document change)

Customer payment behavior included in the forecast

Grouping by planning groups

Additional information (blocked items, special G/Ltransactions)

Currency exposure taken into account

Variable breakdown of planned items (days, weeks, months)

Liquidity ForecastLiquidity Forecast


Cash Management

SAP AG

R

Overview of the Functionality

Cash PositionCash Position Liquidity ForecastLiquidity Forecast

-- Up-to-date bank account Up-to-date bank account -- Link to all system resident dataLink to all system resident datapresentation as well as by presentation as well as by (for example, open items)(for example, open items)value date value date

-- Forecasting daily liquidity Forecasting daily liquidity -- Projecting receipts and Projecting receipts and disbursements over a time framedisbursements over a time frame

-- Input facilities prevent dataInput facilities prevent data -- Facilities for optimizing investingFacilities for optimizing investingduplicationduplication and borrowing cashand borrowing cash

-- Documentation and revisionDocumentation and revision -- Ensuring company liquidityEnsuring company liquiditycapabilities for all planningcapabilities for all planning transactionstransactions


Groups and Levels


Example Cash Position

Summary report level


Drilldown to cash management accounts

Example Cash Position (cont.)


Drilldown to cash flow sources

Example Cash Position (cont.)


Steps1. Define Value Date Default 2. Define Source Symbols ( Check only)3. Define Account Groups ( Check field status group of Cash

accounts for Planning Level ) – OT374. Define Planning Groups ( Z1, Z2 – Domestic payments,

Foreign payments ; X1,X2 – Domestic Customers, Foreign Customers)

5. Define Planning Levels 6. Define Cash Management Account Name7. Define Groupings and Maintain Headers8. Maintain Structure9. Activate Cash Management (in Enter Global Parameters)10. Define Planning Levels for Logistics ( Check only)11. Prepare Production Start up - FDFD12. Define Number Ranges for Manual Planning – OT20



Thank You

Documents

Cash Management & Liquidity Forecast