Table of Contents
The Cash Management Situation ................. 2
Disposition Reporting .................................. 11
Forecast of the Subsidiary Companies ....... 15
Interactive Disposition ................................. 21
Monitoring the Financial Status .................. 30
Processing Bank Account Statements ........ 34
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The Cash
Management
Situation
A company that runs out of liquidity becomes
insolvent. This can also happen through the
lack of transparency if, e.g. the company is
doing well from an operational perspective,
however, the expenditures can no longer be
covered by the currently available financial
means. This example already highlights the
importance of a well-functioning cash
management system in a company.
The objective in day-to-day cash management is to organise the
continuously reoccurring cycles from cash investments or
borrowing in a sensible, and thus, profitable or respectively cost-
effective manner.
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Observance of the cut-off times for the payment authorisations to
the banks is critical for the validation to be carried out the same
day successfully. As these cut-off times at the banks are partly –
depending on the currency – in the morning, the related cash
management decisions, depending on which currency is being
managed, must be received by the bank in good time via
payment authorisation.
The decisions on whether an interest yield was achieved by
investing money or whether money is being borrowed must be
made by this point to secure the operational business of the
company. The following image 1 shows the individual stages of
the control cycle of the disposition cycle. The disposition process
starts by importing the electronic bank account statements. This
process will be specified in detail later on. In our illustration, we
would like to start with the central disposition reporting of the
cash cockpit:
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First of all, lets start with a quick overview of the five most
important stages in the day-to-day routine.
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Disposition Reporting
First of all, the Cash Manager requires a quick overview of the
current liquidity situation. In a typical SAP Standard System,
there is a daily cash position and liquidity preview for this. A
structured overview is required for the daily disposition. This
overview will display the current disposition day with its in- and
outflows at a glance and as compact as possible. The process
starts with the current account balances of the current accounts
(after importing the electronic bank account statements). Next,
the scheduled date of the daily disposition is edited in a
structured manner. This includes information from various
sources such as financial accounting, the plan cash flows of
subsidiary companies from the purchase, sales or financial
transactions from the treasury (real time integration from the SAP
Treasury). It must be possible to make decisions based on this
information. In practice, many clients prefer to use the more
flexible EXCEL display tool.
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Forecast of the Subsidiary Companies
A high-quality database is the basis for a well-founded and
informed investment decision. This also means, e.g. that the
liquidity flows of subsidiary companies that participate in the
cash-pooling, are included. If all companies use the same SAP
System and SAP Client this data integration will already have
been carried out. It becomes more time-consuming and costly if
subsidiary companies use their own, different IT systems.
However, the cash forecast of these companies must be included
to be able to get an overall picture of the group’s liquidity.
However, the outdated SAP Standard Transaction used to enter
remittance advice is only partly suitable as it has many input
boxes.
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Disposition
Once all cash-relevant data has been compiled, the Cash
Manager can start making decisions on which financial
transactions would make sense based on the current cash
situation. In larger organisations, the daily disposition is set-up in
the front office of the Treasury Department. Technically, both
borrowing as well as investments belong to the area of
disposition; cash requirements are in general covered through
the availment of the credit limit (drawing via treasury deals on the
financial market). Foreign currency requirements are met through
currency transactions. In this process, functions are carried out in
the SAP Standard at various positions of the treasury module.
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Monitoring the Financial Status
An integral part of monitoring the financial status is to prevent
risks. Having an overview of the current overall external financial
liabilities of a corporate group is a significant decision support in
all disposition and liquidity planning processes. Generally, an
analysis of financial instruments and current accounts is carried
out. Furthermore, external accounts that are e.g. outside the
cash pool organisation, are also included in the processes and
monitored.
Checking the Processing of Bank Account Statements
Before the next steps in the cash management process can be
carried out, the SAP data and thus the information basis are to
be updated. Electronic bank account statements are imported
and
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if possible processed automatically. In the framework of the daily
disposition and the preceding reconciliation process, the cash
flows announced the day before (remittance advice, financial
transactions, cash pool transfers, etc.) must be assigned to the
actual data (cash receipt or respectively cash disbursement).
This process is also very important to be able to make a decision
based on the correct data and to clarify discrepancies in time.
Cash Cockpit in SAP
The Cash Cockpit was created in close cooperation with the
specialist department at an SAP Client based on these five
process steps. The starting point for this was the SAP Standard
which was already outdated in many areas and no longer
provided the ideal support for day-to-day business. The objective
is to make all relevant data available from one central location
(Cockpit) and
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to be able to directly carry out interactions (financial transactions)
or transactions.
Demo 1: Overview of the Cash Cockpit
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Disposition Reporting
In the Cash Cockpit, the disposition reporting
serves as a database for daily planning. This
view summarises all cash-relevant processed
in SAP ERP in a reasonable manner.
Contrary to individual, independent assessments such as the
cash management position, the Cockpit combines a central
access point for the front, middle and back office. The liquidity of
Friday 27.05 and Monday 30.05 are displayed at a glance, see
image 2. A drilldown makes the analysis of all individual values of
the respective figures right down to the last level, the individual
receipt, remittance advice or financial transaction possible. In
addition to multi-level cash pool, the forecasts of the subsidiary
companies as well as the future incoming funds / expenditures
based on sales or purchases can be displayed. P a g e | 11
The image was developed together with the Cash Management
Department and based on the SAP Standard-Customising (by
means of disposition groups), it can be adapted to the
requirements of the respective company and to the treasury
strategies.
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Contrary to a report that purely serves to provide you with data,
in the Cash Cockpit you can check the available database, in
which you can e.g. look at the status of the cash forecast reports
of the subsidiary companies in detail. If only a few companies
within the corporate group have reported the daily forecast, the
database should respectively only be used with restrictions to
make decisions regarding borrowing or respectively financial
investments.
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Forecast of the
Subsidiary
Companies
Cash-relevant data of the subsidiary
companies are indispensible for a central
cash management.
If subsidiary companies are included in an SAP System as an
operational company code, a uniform database will already be
available. If subsidiaries are managed outside of SAP, only
replacement technical company codes are required. The
“missing” operational data must be delivered correspondingly.
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Maintain Forecast Profiles
Equipped with a SAP GUI, the subsidiary companies are given
central access to the Cash Cockpit. The SAP companies also log
on to the central ERP. This process should be made as easy as
possible. In the example in image 3, you can see a simple
transaction which is used to maintain the forecast values.
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Image 3: Maintain the Forecast Profile
Here, a cash requirement of EUR 10,000 on the account at
Deutsche Bank is anticipated for the next working day after the
disposition day (30.05). The abbreviation t (thousand) or m
(millions) is a standard form in the treasury. In the Standard of
the SAP Cash Management, this form is unfortunately completely
unknown.
This makes it possible for the Cash Cockpit to enter the data
error-free and in a quick manner. This ensures that the right
amount of zeros is entered.
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Technically, a SAP Standard Remittance Advice is generated with
this transaction. Contrary to the SAP Standard Screen for the
compilation of a remittance advice, the new input option is
reduced to only a few absolutely required boxes. This reduces the
complexity for the subsidiary company and increases the
acceptance of the users to enter the data into a SAP system.
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Release Forecast Profiles
Four eyes are better than two. True to this motto, a release
process for the forecast data is possible. This is managed via
two new reporting objects. Only once the forecast has been
entered and released will the green light in the Cash Cockpit
appear, as shown in image 4.
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Image 4: Cash Forecast Status Overview
Interactive Disposition
The interactive disposition can build on a
solid database planning for the current
disposition day. Through this a shortcut to the
SAP Treasury and the SAP Monetary
Transactions is created. The scheduled
closing balances after the disposition in the
Cash Cockpit, are a central, standard starting
point.
From this view, there are various function options through which
the SAP Treasury can be accessed, e.g., to make a financial
investment. In the “limit” column to the left, image 5 shows the
currently available financial scope of the individual banks. The
other columns indicate the loans due today, new drawings and
the new total loan balance.
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Image 5: Interactive Disposition
Without having to exit the Cash Cockpit, you can quickly and
efficiently run through a complete process in three simple steps.
Demo 3 shows how a credit limit is extended through drawing.
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Step 1 – New drawing
Once you have selected a row (that corresponds to a bank), a
drawing transaction can be carried out via the icon “new drawing”.
Again, a SAP Standard Transaction in the treasury is created in
the background without having to run through the complex input
screen in the SAP Standard. Image 6 shows an example of such
a simplified input.
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r& Anlegen/Ändern einer Ziehung zur
Kredittnie
Image 6: Drawing a Credit Limit
Planned drawings can first be simulated by clicking on “Note”.
I.e. the impact of a note on the disposition is immediately visible
in the Disposition Reporting of the Cash Cockpit.
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The easy forwards navigation with the “FI post” icon, see image
5, will immediately navigate you to the second step in which the
posting run is carried out.
Step 2 – Carry out posting run
The drawing of the credit limit is immediately invested as a
treasury deal. The drawing can now be transferred to FI and
result in one or multiple postings in the general ledger. The
posting log in image 7 shows detailed data. A SAP Standard Log
gives information on the whole process. Now, the foundation has
been laid to carry out the payment authorisations to the banks
directly.
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Again, the third step can be access via forwards navigation by clicking on the “Pay” icon.
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Image 7: Posting Log
Step 3 – Monetary Transactions and Payment
Request
The SAP Transaction F111 MONETARY TRANSACTION FOR
PAYMENT REQUESTS is automatically accessed via a shortcut
from the Cash Cockpit, directly provided with the required
selection parameters and, if desired, carried out immediately
(see image 8). Provided that an automated bank communication
has been set up in the background, this could be considered
“straight-through-processing”. Here, a payment run is very
efficiently initiated and a payment request is created.
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□ Parameter wurden erfasst
9 Zahlungsvorschlag wurde erstellt
□ Zahlungslauf wurde ausgeführt
Buchungsauftrage: 2 erzeugt, 2
eriedigt
Image 8: Monetary Transactions
If direct connections to your banks have been carried out via
SWIFT or EBICs, once the produced data carrier has been
released, data can be directly sent to your main bank. The SAP
Bank Communication Management can support you in this
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Status
Monitoring the Financial Status
Monitoring of the financial status takes place
in the context of the market risk analyser,
external accounts outside the cash pool
organisation and financial instruments.
With the aim of supporting the process, a compact overview of
the current external financial liabilities is provided. The origin of
the financial liabilities is displayed on an interface according to
grouping criteria that are to be defined. As an example in
image 9, the current accounts of the whole corporate group are
grouped according to countries with the current daily balance.
Furthermore, the financial instruments are grouped according
to financing instruments, foreign currency and derivatives.
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Image 10: Drill down external bank accounts
To obtain detailed information, individual bank accounts can be accessed via this overview. This also applies for the financial instruments of the treasury: the individual deals with their cash flows and current market values can be access (see image 10 for external bank accounts and image 11 for financing instruments).
Image 11: Drill down financing instruments
The compacted display of the complete financial status can also
be viewed in the disposition reporting (first tab of the Cash
Cockpit).
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Processing Bank Account Statements
The information cycle in the cash
management starts every morning by
retrieving and processing the electronic bank
account statements
Every morning between 7 and 8 o’clock, the banks make new
bank account statements available to the companies for retrieval.
Technically, this happens via a scheduled background job at your
end. Alternatively, the Cash Manager can carry out the process
step manually (pull process). If you have a connection to the
SWIFT network, you can reverse this method by your bank
sending you the files directly after the files were compiled (push
process).
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Importing Bank Account Statements
To date, in the SAP Standard only the Bank Communication
Management is able to track whether a bank account statement
has been imported or respectively processed. With the Elko-
Cockpit you have another alternative. As seen in image 12, the
Elko-Cockpit also offers a good overview of which bank account
statement of the corresponding bank accounts were imported
and processed.
Image 12: Overview of the imported bank account statements
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Monitoring Matching
Remittance advices and treasury transactions created the day before are now
reflected in the actual data. The plan records compiled the day before should be
removed via matching (ACTUAL/PLAN), see image 13. The Cash Cockpit also
offers an easy and efficient solution for this.
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Further Information
Consultants
bdf Consultants GmbH
Zollhof 6
40221 Duesseldorf
Deutschland /
Germany
Contact Details:
Dr. Ralf Huber
+49 171 / 3363 449
Thomas Dohmen
+49 172 / 2566 907
t.dohmen@bdf-
consultants.de
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