Agenda

SAP Cash & Liquidity Management & Payment overview

Overview of SAP Cash Management
Overview of SAP Liquidity Planner
Overview of SAP In-House-Cash
Overview of SAP BCM

Take-out from this meeting

The goal is to provide end users with an understanding of

how SAP can support an optimized Cash & Liquidity
management solution by providing an overall-walk through
of the processes and models typically implemented in each
of these modules.

SAP Cash & Liquidity Management overview

Agenda

SAP Cash & Liquidity Management overview

Overview of SAP Cash Management
Overview of SAP Liquidity Planner
Overview of SAP In-House-Cash
Overview of SAP BCM

SAP Cash Management: business processes

Business processes covered in these modules:

Cash position management
Manual bank transfers
Bank statement processing
Short term liquidity overview

Manual forecasting process

Input for currency exposure reporting

The cash position report is based on bank balances from SAP

FI, SAP Treasury and manual memos

An example of a cash position report is shown below and the

groupings in the first two columns are freely definable

The report functionality allows drill down to a more detailed

view of where the cash postions originate from

But SAP Cash Management does also provide an overview to

base the medium term liquidity management decisions on

SAP CM data can also be extracted into SAP BW

for more flexible and advanced reporting
Non-SAP
companies?

SAP BW

Cash position report

Liquidity forecast
report

Extract of CM
data

SAP
SAP CM
CM

SAP FI GL

SAP SD & MM

SAP AR & AP

Fin. CFs
Real and
from SAP
expected CFs
TM
from bank and
bank clearing Exp. CFs
from SAP
accounts
SD & MM

Expected CFs
from SAP AR
& AP

SAP TM

With the new EHP5, the functionality in SAP CM

will be greatly enhanced

The new layout can look like below

The old List report view in SAP CM

Agenda

SAP Cash & Liquidity Management overview

Overview of SAP Cash Management
Overview of SAP Liquidity Planner
Overview of SAP In-House-Cash
Overview of SAP BCM

SAP Liquidity Planner: business processes

Business processes covered in this module:

Cash flow forecasting on short to long term basis
Reporting of actual cash flows according to the direct
method
Cash flow forecasting performance measurement
Calculation of currency exposures

For most companies the expected short term forecasts

provided by the SAP CM module is however not enough

The expected short term forecasts from the SAP CM

module is basically only covering the forecast of the PL
down to the gross margin and only for those invoices
with long pmt terms.
If a complete short term forecast is needed e.g. a rolling
quarter forecast all the way down to the net result a
model should instead be implemented in SAP Liquidity
Planner.

With SAP Liquidity Planner (SAP LP) it is possible to enhance

the short term forecasting model but also to extend it to a
long term forecasting model

Actual Calc.

The LP concept is a forecasting and follow up solution

while the CM module is reporting of expected forecasts

The SAP Liquidity Planner concept

The main task of the Actual calculation module is to identify

realised cash flows in the operative systems via the banks accounts
The main task of BW is to extract data from the operative systems
and BI applications and make them available for reporting
The main task for IP / BPC is to provide a tool for all subsidiaries
where cash flow forecasts can be entered, calculated, consolidated
and sent back to BW for reporting purposes.

The Actual Calculation module is used for extracting

actual CFs from SAP FI into the forecasting model
SAP FI cash
flow basis
Bank
statement

FI postings

Invoice
postings

SAP LI
Automatic
update when
bkk
statements
are available

Automatic
update upon
posting to
actual acc. in
SAP FI

Update SAP LI
with postings on
actual accounts
1)

Initial
assignment
of default
liquidity
items
(ingoing
/
outgoing
/
bank transfer)

Initial
assignment of
default liq. items
2)

SAP LI

Run
assignment
program FI
Run
assignment
program Invoice

Storing of
cash flows
with real
liquidity
items

Assign liq. items using

assignment programs
3)

Reports in
SAP LI.

Reports in
BW

Report Cash
flows (and
forecasts
4)

In order to follow up on the actual cash flows, standard

reports are available in the SAP Actual calc. module

SAP actual calculation standard reports

In order to get the forecasting and performance

functionalities, SAP BPC/IP and BW must be set up

BPC

Usage of SAP
CM/LP data in
entry layouts

Actual CF reports per liquidity item

Bex Analyzer

Actual vs. forecasted CF reports

Flexible reports on SAP CM data

Upload of
forecasts
to BW

SAP BW
Upload of actual
CFs from SAP LP

SAP actual
calculation
Actual CFs
Program to
deduct liquidity from bank
accounts
items per
actual CF from
sublegders

SAP SD & MM

Extract of CM
data

SAP FI GL

SAP AR & AP

Extract of CM
data

SAP
SAP CM
CM

The SAP BW and BPC reporting platform enables integration

of CF forecasts and actuals into the same reporting model

The forecasting model(s) can be build in different ways

1. Rely on expected cash flows from the ERP system(s)

2. Ask end users to manually enter their expectations
3. Use historic data to predict the future
4. A combination of the three above

Decision affects the system design and the dependency to

other processes

SAP has built a starter kit for the SAP LP solution to enable
faster implementation of a long term forecasting solution
based on short term forecasting data

Forecast Data

Transaction Data

System
Independe
nt Inputs

Analyze/
Remediate/
Aggregate

Define and
Maintain
Calculation
Rules

Calculate
Cash
Flows

Report

PO/AP

SO/AR

Define
calculation
rules

Calculate cash
flow

Financials

CAPEX

Sales

Data analysis of
latest liquidity
information

HR
Aggregation in
SAP NetWeaver
BW

Maintain
calculation
rules

Upload currency
rates for future
time frame

SAP BusinessObjects
Planning and
Consolidation Excel
interface

Run currency
translation

Define
calculation rules

SAP
BusinessObjects
Xcelsius Enterprise
dashboards
embedded in SAP
BusinessObjects
Planning and
Consolidation

Agenda

SAP Cash & Liquidity Management overview

Overview of SAP Cash Management
Overview of SAP Liquidity Planner
Overview of SAP In-House-Cash
Overview of SAP BCM

SAP In-House-Cash: processes

Business processes covered in this module:

Internal payments
Central external payments
Central in-coming payments
Cross bank payments

Local payments

The SAP IHC solution is optimizing both internal and external

payments via centralization

Internal
Bank

Head office
(Europe)
Internal Bank

Subsidiary

USA
Region 2
Asia

Subsidiary

Subsidiary
Subsidiary
Subsidiary
Subsidiary

Region 1

SAP AG 2009. All rights reserved. / Page

The payment process for internal payments is now becoming

a settlement instead of a physical payment
Example: Subsidiary 1 makes a payment to Subsidiary 2
Corporate Group
Head Office
Subsidiary 3

2b

In-House
Cash Center

2a

Account
management

Subsidiary 2
Subsidiary 1
Pmnt Program OP

Payment

SAP AG 2009. All rights reserved. / Page

Financial
Accounting

Bank Statement

External payments are centralized in the IHB and paid out of

the Group Treasury disbursement accounts
Example: Subsidiary 1 makes a payment to an external
partner
Corporate Group
Head Office
Subsidiary 3

In-House
Cash Center

Subsidiary 2
2

Subsidiary 1
Pmnt Program OP

Financial
Accounting

Account
management

External
business
partner

Partner bank
Payment

SAP AG 2009. All rights reserved. / Page

Head
office
house
bank
Bank Statement

It is also possible to make local payments out of the IHB

and hence make use of local subsidiary bank accounts
Example: A Subsidiary in Germany makes a payment to an
external partner in UK

Headquarter
IHC
Subsidiary UK

In-House
Bank Germany

Subsidiary
Germany

Pmnt Program OP

Account
management

Financial
Accounting

External business
partner UK

Partner bank
Payment

SAP AG 2009. All rights reserved. / Page

House
ofbank
Subsidiary
UK
Bank Statement

The IHC module provides a lot of functionality but does also

require some master data setup
FI GL
Pmnt clearing

Headquarter
IHC

Bank
statements

Subsidiary 1

Limits

- 20
+ 50
..
..

(1) 200 (2) 540

Subsidiary 2
+ 100
- 50
..
..

IHC Receiv.

IHC Payab.

(2) 540

(1) 200

G/L Transfer
Conditions

Account A
+ 100
- 120
..
..
Blocks

Business
partner

Currency
conversion
SAP AG 2009. All rights reserved. / Page

Reporting

No

Post.dte

Val.dte

30.12.00

31.12.00 EUR

100.00 C

31.12.00

31.12.00 EUR

9.58 D

Turnovers

Curr. Amnt

Agenda

SAP Cash & Liquidity Management overview

Overview of SAP Cash Management
Overview of SAP Liquidity Planner
Overview of SAP In-House-Cash
Overview of SAP BCM

SAP Bank Communication Management: business processes

Business processes covered in this module:

Collect and batch commercial and financial payments
Approve, Resubmit and Reject payments in a secure
environment
Monitor payment status
Monitor bank statements

SAP Bank communication manager (BCM) optimizes the

payment approval, monitoring and communication process

A BCM solution can be setup with and without a payment

factory (internal bank)

The BCM module use SWIFT connectivity and an example of a

process Flow within the SAP BCM is shown below
SAP ERP

Execute
Payment
Program
Create
Payment
Order

SAP Bank
Communication
Management

Create Batch

Routing

Payment Approval
Work List

Mapping

Security
(Approval
workflow,
Authorization,
Digital
signature)

Import
Bank
Statement

Receive Status
Messages

Post/Processing
and
Clearing

Bank Statement

SAP AG 2009. All rights reserved. / Page 36

SAP NetWeaver
Process Integration

SWIFTNet

Security
Encryption
Digital Signature

SAP Integration
Package for
SWIFT

Resource
Adapter

SWIFT
Alliance
Access /
Gateway

QUESTIONS
Lone Kejser
Manager, First Treasury
+45 61 55 66 95
[email protected]