SAP Cash and

Liquidity
Management: A
Comprehensive
Guide
SAP Cash and Liquidity Management is a powerful suite of solutions that helps
organizations optimize their cash flow, manage liquidity, and improve financial
performance. By providing real-time insights into cash positions, automating critical
processes, and streamlining workflows, SAP Cash and Liquidity Management
empowers businesses to make informed decisions and achieve their financial goals.

by SAPMBC MT940
Cash Management in SAP: Key
Features and Functionalities
1 Bank Account Management 2 Cash Forecasting and Planning
SAP Cash Management provides By leveraging advanced forecasting tools,
comprehensive bank account management SAP Cash Management enables
capabilities, allowing organizations to organizations to create accurate forecasts of
centralize and manage their bank their future cash flows. These forecasts are
relationships. This includes creating and crucial for effective liquidity planning and
maintaining bank account master data, proactive management of working capital.
managing bank statements, and performing
bank reconciliation.

3 Payment and Collection 4 Cash Optimization Tools

Management
The solution includes various tools for
SAP Cash Management offers robust optimizing cash flow, such as cash pooling,
payment and collection management dynamic discounting, and treasury
features, including automating payment management capabilities, allowing
processes, managing customer invoices, and organizations to maximize their cash
optimizing collection efforts. utilization and minimize idle cash.
Bank Account Management in SAP
Account Master Data Bank Statement Management
Bank Relationship
Management Management
Receive and process bank statements
Create and maintain comprehensive automatically from various banking Centralize and track all bank
bank account master data, including channels. relationships, including contact
details such as account name, bank information, agreements, and service
Reconcile bank statements with internal
identifier codes, and currency. levels.
records, identifying discrepancies and
Manage multiple bank accounts across resolving them efficiently. Utilize the system to manage bank fees
different currencies and locations from a and optimize banking relationships.
central system.
Cash Forecasting and Planning in SAP
1 Data Collection and Analysis
Collect historical and real-time data from various sources, including sales, expenses,
and financial reports.

Analyze historical trends, identify seasonal patterns, and predict future cash flows with
statistical models.

2 Scenario Planning and Sensitivity Analysis

Develop different scenarios to simulate various economic and business conditions,
assessing their potential impact on cash flow.

Perform sensitivity analysis to understand the impact of different factors, such as interest
rates or currency fluctuations, on future cash flows.

3 Forecasting and Planning Tools

Utilize advanced forecasting tools to generate short-term and long-term cash flow
forecasts with varying levels of granularity.

Create comprehensive cash flow plans based on forecasts, setting targets for cash
balances and working capital requirements.
Liquidity Management
Dashboards and Reporting
Real-Time Cash Visibility Key Performance
Indicators (KPIs)
Access up-to-date information on cash
balances across all bank accounts and Track key performance indicators
subsidiaries, providing a related to cash flow and liquidity, such
comprehensive overview of liquidity as days sales outstanding (DSO), days
positions. payable outstanding (DPO), and cash
conversion cycle.

Trend Analysis and ReportingCustomized Reports and

Alerts
Analyze historical data to identify
trends, understand seasonality, and Generate customized reports and alerts
assess the effectiveness of liquidity based on specific requirements, such
management strategies. as cash balance thresholds, payment
due dates, and forecast deviations.
Automating Cash Processes with SAP

Payment Automation Collection Automation Cash Reconciliation Automation

Automate payment processes, including Automate customer invoice creation, sending Automate bank reconciliation processes,
invoice processing, payment scheduling, and reminders, and managing collections. including statement matching, exception
bank file generation. handling, and reconciliation reports.
Improve collection efficiency, reduce overdue
Reduce manual effort, minimize errors, and payments, and enhance customer Reduce manual effort, increase accuracy, and
optimize payment processing time. satisfaction. streamline the reconciliation process.
Managing Payments and Collections in SAP
Payment Processing Manage different payment methods, including Automate payment scheduling, ensuring
electronic funds transfer (EFT), wire timely payments to suppliers and vendors.
transfers, and checks.

Collection Management Create and manage customer invoices, track Monitor customer payment patterns, identify
payment due dates, and send reminders. overdue invoices, and initiate collection
actions.

Payment Reconciliation Reconcile payments made and received with Resolve payment reconciliation issues
internal records, identifying any promptly, ensuring accurate cash flow
discrepancies. reporting.
Integrating SAP with
External Banking Systems

Real-Time Data Exchange Automated Bank Statement

Downloads
Connect SAP with external banking systems
to enable real-time data exchange for Automate the download and processing of
payments, balances, and transaction updates. bank statements directly from bank systems,
eliminating manual intervention and ensuring
timely reconciliation.

Streamlined Payment InitiationEnhanced Security and

Compliance
Initiate payments directly from SAP to bank
accounts, using pre-defined payment Ensure secure and compliant data exchange
templates and automated validation rules. with external banking systems, meeting
regulatory requirements and maintaining data
integrity.
Compliance and Regulatory
Considerations in SAP Cash
Management
1 Financial Reporting 2 Anti-Money Laundering
Standards (AML) Regulations
Ensure compliance with relevant Implement AML procedures and
financial reporting standards, such as controls within SAP Cash
IFRS or US GAAP, for accurate Management to prevent money
financial statements and disclosures. laundering activities and comply with
regulatory requirements.

3 Know Your Customer 4 Data Privacy and Security

(KYC) Regulations
Implement appropriate data privacy
Integrate KYC processes into SAP and security measures within SAP
Cash Management to verify customer Cash Management to protect sensitive
identities, mitigate risks, and comply financial data and meet regulatory
with regulatory obligations. standards.
Optimizing Cash and
Liquidity with SAP
Cash Pooling Dynamic Discounting
Centralize cash balances across Offer early payment discounts to
multiple bank accounts to maximize customers to accelerate cash inflows
liquidity and reduce idle cash. and improve working capital
management.

Treasury Management Automated

Forecasting and
Optimize cash flow through treasury
Planning
management capabilities, such as Utilize automated forecasting and
hedging against currency planning tools to proactively manage
fluctuations and managing interest liquidity, anticipate cash flow
rate risks. challenges, and optimize financial
decisions.