openSAP

SAP Business ByDesign Financials

Week 4 Unit 1

00:00:12 Hello and welcome to Unit 1 of Week 4. My name is Sissi Ruthe and I'm your instructor for
the last two weeks of this openSAP course.
00:00:21 I hope Week 3 was revealing, and you are now ready to move on to this week. As you have
learned from my colleague Melanie how open items are created and monitored,
00:00:30 we want to continue in this unit with paying and collecting money in your daily business. You
will get to know in this unit some standard configuration settings for paying and collecting
money
00:00:42 and see how the system supports the end user to reduce the manual effort by an automated
payment process. What have we done so far?
00:00:51 In the past three weeks my colleagues demonstrated several business scenarios in the
system. Order-to-cash and procure-to-pay scenarios like selling a product or buying a
service,
00:01:01 creating travel and expense reports, and reporting a VAT return. What we can see here is
that processing payables/receivables and payments is a standard process
00:01:12 normally highly automated which occurs in many business scenarios. As Melanie explained
this graphic already in more detail in her first unit of Week 3, or your orientation in this week.

00:01:24 I just want to summarize it and use it for your orientation in this week. In SAP Business
ByDesign the goods and services value chain is separated from the monetary value chain
00:01:34 that represents the cash flow management. This was motivated by the fact that the
monetary value chain – which contains invoicing and payment –
00:01:43 is standardized to a great degree. All units of this week will focus mainly on the orange
highlighted box – the cash register.
00:01:51 Please keep in mind that this slide is from a financial perspective a simplified view on the
integrated processes in the system. To keep it simple and make it more consumable, we
focus on the straightforward processes and did not draw all dependencies.
00:02:08 Depending on your country and the agreements with your business partners, you need to
pay and receive money in different ways, for example by check, bank transfer, direct debit,
and others.
00:02:19 These different ways are reflected as payment methods in the system. To reduce your
implementation effort, SAP Business ByDesign provides preconfigured payment methods.
00:02:30 In this unit, we will handle internally initiated payments. Internally initiated means these
payments need to be triggered either automatically or manually in the system.
00:02:40 For example, an end user executes a payment run for incoming payments by direct debit for
several customers. The slide gives an overview of available payment methods for internally
initiated payments.
00:02:52 Externally initiated payments will be shown in the next unit. One thing I want to mention is
that in some cases the preconfigured payment methods are country-dependent.
00:03:03 This means, for example, the payment method bill of exchange receivables is only available
for France, Italy, and Spain, and not for Germany. I will show you later in the system demo
automatic payments by bank transfer and incoming payments by direct debit.

00:03:20 Most probably you provide your bank with electronic payment files so that the bank can
process them. The system supports you in doing so, but you need to define a file format for
this process.
00:03:32 SAP Business ByDesign supports the most popular file formats of the countries listed here.
This can reduce the implementation effort.
00:03:40 As an example, for France the file format AFB Domestic, or for Germany the file format
SEPA Credit Transfer is available in the system. If your bank uses its own custom payment
formats or a variant of one of the popular formats,
00:03:56 you can create user-defined payment file formats. There are two ways to do this.
00:04:01 For flat file formats with easy to medium complexity, it is recommended to use the Business
Configuration. To define more complex file formats, you can use the SAP Cloud
Applications Studio.
00:04:15 To reduce the workload of users, automatic processes are necessary whenever possible.
The system supports this by automatic payments.
00:04:24 When creating automatic payments by a payment run, the system automatically selects
open payables and receivables and creates payment proposals based on them.
00:04:34 For open payables it does not matter if the source document is an invoice, a tax liability, or a
travel and expense report. The automatic selection of open items in the system is done
amongst others on payment terms,
00:04:48 the next payment run date, and the payment strategy that is assigned to the customer or
supplier. We will have a deeper look into this in the system demo.
00:04:59 Why do we need a payment strategy? As many of you may know, paying without cash
discount is quite expensive.
00:05:06 Let’s assume you have agreed with your supplier on 2% cash discount when you pay in 14
days or the net amount when you pay in 30 days.
00:05:17 If you pay the net amount after 30 days, you let go an interest rate of 45% per annum. The
automatic payment process in SAP Business ByDesign supports you to ensure that cash
discount is taken.
00:05:29 For example, you can define in the payment strategy to pay with cash discount at the latest
possible date. To reduce your implementation effort, the system comes with one default
payment strategy which can be adjusted if necessary.
00:05:43 You can also define additional payment strategies if needed. By using payment integration
scenarios, it is possible to fully automate the payment process.
00:05:55 You can use out-of-the box payment integration scenarios to exchange, for example,
payment files with your bank, or in the case of credit card payments, credit card settlements
with your clearing house.
00:06:06 In addition, a customer-specific integration based on Web services can be implemented as
well. Now let's go to the system demo.
00:06:18 I'm already logged on as Eduard Becker. The first thing I want to show you is in the work
center "Payables", which you know already from last week,
00:06:32 mainly regarding monitoring and creating open items, but also the periodic task for
"Payment Runs" is included here.
00:06:44 We have entered here in the system a weekly payment run. This means this payment run is
scheduled on a weekly basis and we can see here in the schedule how...
00:06:55 Oh, sorry... We can see here in "View Jobs" how the schedule is done.
00:07:03 The "Next Start Date/Time" is on February 6, and the "Recurrence" is on Monday of every
week. What I want to show you here as well is the list of payment proposal lists which are
available
00:07:20 and also "Application Log ID". So each execution of the payment run creates an entry here
in this table, and you can see the application log ID here.
00:07:30 And this is where you want to go in first because here you can see if any errors have
occurred or anything else has gone wrong. So first of all, the summarizing of the messages
shows that four due payments were created.
00:07:44 If I go onto the "Results" tab, you can see by clicking on "Expand All" that here payment IDs
were created for the different suppliers which are shown here as well.

2
00:07:58 Let's go back. And then I want to show you the payment proposal list.
00:08:03 So as there were due payments created, we of course also have a payment proposal list.
"Proposal" means you still have the option to change it.
00:08:12 Either select additional open items or deselect open items which are assigned to this
payment. And then you can save it and execute it afterwards so that the payment will then
be done by the bank.
00:08:25 So let's see here for example, for Eduard Becker – for myself in this case – we have
payment ID "57". If I click into that one, I can see here that there are in total three open
items selected.
00:08:41 These were all expense reports and, based on our tests, these are double entries in a way.
And that's why I want to deselect them right now and just keep this "76", the €10.
00:08:55 So I close it, and if I now refresh the list, you see it's shorter. And we only have one item left
here for Eduard Becker.
00:09:04 In addition, I want to show you here for our supplier Alteco how the selection of open items
worked there. So if we go into the payment "56" for the supplier, we also have the tab
"Open Items" here.
00:09:18 And from here you have the possibility to jump directly to the supplier invoice, either by the
"Document", the "Internal Document ID", or also by the "External Reference",
00:09:28 which means the invoice number of the supplier. Let's jump into the screen.
00:09:36 And then you can see all the general information here. So this invoice has an invoice date of
January 23, and the receipt date was one day later.
00:09:48 In addition, we can see here the payment terms, which are 14 days with 3% cash discount,
30 days with 2%, and 60 days due net.
00:09:59 And the due date is calculated based on the due net payment term in a way for the 60 days.
So now we see that if we pay within 14 days, we get 3% cash discount.
00:10:16 In addition, I also wanted to show you how the system knows that this open item needs to
be paid by a bank transfer. This is something I can do by directly jumping into the supplier
Alteco GmbH, and then I click on "View All".
00:10:32 You saw that already with Melanie, the financial data of a supplier. And here you can see
that you can define the payment method,
00:10:40 which is also used for the payment run to select things or the open items. So, so far that's it.

00:10:51 Just one thing to mention. Why is the cash discount taken?
00:10:55 Because the invoice was created or has an invoice date of January 23, which is here, the
receipt date was Tuesday.
00:11:04 As we calculate the payment terms based on the receipt date here in the system, 14 days
would mean February 7, so still a week to go.
00:11:13 But as we have seen before, no grace days are allowed, and the next payment run will be
one day too late, on February 7. And that is why it's included here in the payment run.
00:11:33 So now let's go out... and... now we will execute the payments.
00:11:40 This can also be done automated. If you set the flag in the selection criteria of a payment
run that you want to release it automatically,
00:11:50 then the system will automatically generate payments and no payment proposals, but this is
then something you need to reverse and cannot change or adapt anymore.
00:12:00 When I click on "Execute Proposal", the system will generate the payments. So the open
item will be cleared, and in addition also a posting takes place.
00:12:11 So we'll have a look into the journal entry as soon as the system shows us the status that it
is ready for transfer. Now we're here, so the payment proposals are completed.
00:12:27 I have here now, for example, the payment ID "54" for Melanie, who also had some
expense reports. And if I click here on this payment ID, I can directly jump into the payment
ID and see the general information.

3
00:12:44 But I wanted to go to the journal entry, and based on the document flow you can then also
see the journal entry that is posted. Yeah, here we have it now.
00:12:59 So we have here the payment. And if I click here on this little icon...
00:13:05 I can see the journal entry, here in this case for the set of books IFRS. And you see that the
"Cash Disbursement (Clearing Account)", which means cash and transfer outgoings is
credited,
00:13:19 and on the other side the "Other Liabilities - Employees" is debited. So the open item is
cleared.
00:13:28 So we have not yet done everything necessary to also inform the bank that they should
execute or process these payments. That's why we need to go to a different work center,
which is the main work center for the cash area.
00:13:44 It's "Payment Management", and in there in the view "Payment Monitor" you get an
overview now as the preselection for today's payments. So we see here right now our
payments we just executed.
00:13:58 They are all ready for transfer, which means I can now hand them over to the bank. And to
do this you have the option either to do that manually in the payment monitor
00:14:09 by selecting them and clicking on "Actions for Bank Transactions" and "Create Payment
File". With that, the status will be changed to "In Transfer" and also the payment file will be
created.
00:14:21 I will do that right now. There's another option but we will come to that in a few minutes.
00:14:28 So now we have the status "In Transfer", and if I select right now one of the items, I can
scroll down and I see here...
00:14:40 that an outbound file was created with the ID "49". And if I open that, you can see here the
complete payment amount
00:14:50 The file type is a bank transfer. And if I click on "View All", you can also have a look directly
into the TXT file...
00:15:03 which looks like that. Or you can also download it directly either to your desktop or to any
directory in the network.
00:15:17 Or if you use the payment integration scenario out of the box, you can also send it
electronically to the bank. We will leave it here right now.
00:15:27 And I just wanted to mention in addition that you can also create these payment files
automatically by a run, which is under "Periodic Tasks", the "Payment Media Runs".
00:15:40 And there you see there is already a run defined, which is a weekly run, and that's
scheduled by week, of course after Monday, after the payment proposals were created,
00:15:52 and then it selects all payments which are ready for transfer and creates the payment files
for that. That's it for the system demo, we're now going back to the slides...
00:16:08 So let's summarize this unit with the key learnings. SAP Business ByDesign provides
standard configuration settings like payment methods,
00:16:15 payment file formats, and payment strategies to reduce the implementation effort. The
system supports the end user to reduce manual effort for the payment process by effective
automation.
00:16:27 And it is possible to automate the complete payment process by payment integration
scenarios from our partners. In Unit 2, I will show you how to process a bank statement in
the system and we will concentrate on externally initiated payments.
00:16:41 I hope you’ve enjoyed this unit. Thank you for your attention, and see you again in Unit 2.
00:16:45

4
Week 4 Unit 2

00:00:11 Welcome back to Unit 2 of Week 4. The topic of this unit is processing a bank statement.
00:00:17 In Unit 1, we talked about internally initiated payments like outgoing payments by bank
transfer or incoming payments by direct debit. Now we want to continue and process a bank
statement in the system with emphasis on externally initiated payments
00:00:32 such as bank transfers from customers. Also in this unit I will explain to you some standard
configuration settings which are relevant to process a bank statement.
00:00:42 You will be introduced to the operational bank and cash management in the system. In
addition, we will talk about payment allocation and payment clearing.
00:00:53 All transactions with your house bank need to be reflected in the system. You may know
from other systems that this is done by postings on an account in general ledger.
00:01:04 Such a general ledger account normally reflects one bank account. Which means for each
bank account held with your house bank you need to create one general ledger account.
00:01:13 Contrary to that concept, in SAP Business ByDesign the bank is a role of a business
partner. If you create a bank, the system creates a business partner with general attributes,
addresses, and relationships
00:01:26 which is reflected by the blue frame in the graphic. In addition it assigns the role "bank" to it.

00:01:32 This role contains general attributes like bank name, bank ID, working day calendar,
addresses, but also contacts and allowed payment formats which is shown by the yellow
frame.
00:01:44 For one bank you can define all related bank accounts. The bank account consists of a
bank account number, an account determination group,
00:01:52 currency restrictions, allowed payment methods, and further attributes, which is represented
by the green frame. Based on this concept of an operational bank and cash management,

00:02:03 you can always create, monitor, analyze, and valuate all transactions on a specific bank
account of your house bank as you are used to doing it for other subledgers like payables or
receivables.
00:02:16 As you can use the same account determination group for different bank accounts, you can
minimize your chart of accounts. As you have already seen in our last unit, SAP Business
ByDesign comes along with preconfigured payment methods.
00:02:32 We will focus in this unit on externally initiated payments, like an incoming payment from a
customer by bank transfer or an outgoing payment to a supplier by direct debit.
00:02:42 The slide gives you an overview of available payment methods for this purpose. Again, I
want to mention that in some cases the preconfigured payment methods are country-
dependent.
00:02:52 This means, for example, that the payment method "lockbox" is only available for the United
States and not for Germany. To automate the process of posting incoming and outgoing
payment items of a bank statement,
00:03:05 you can use the electronic bank statement functionality. Also here, SAP Business ByDesign
supports a number of preconfigured national and international file formats for bank
statements,
00:03:16 such as MT940 for several countries or BAI2 for the United States and Australia. This will
reduce the implementation effort.
00:03:25 It happens that bank-specific characteristics need to be considered. In this case, you have
to adapt the preconfigured settings in the Business Configuration.
00:03:34 I want to mention one thing. It is important to get in contact with the technical support of
your bank early in the implementation phase
00:03:42 to verify the preconfigured file formats with them. For your business it is relevant to process
bank statements completely and not to keep one bank statement item

5
00:03:53 such as customer payments, own payments to suppliers, or bank interests or fees
unprocessed. Many of these items allow a direct posting like bank interests or fees to cost,

00:04:05 as well as clearings, especially clearings of all internally initiated payments, because they
should be executed without any difference. Customer payments are also mainly
automatically cleared by the payment clearing.
00:04:18 Externally initiated payments which cannot be cleared immediately can be at least allocated
to the correct payment area or also called subledger.
00:04:28 How does this work? During payment processing, the system applies payment allocation
and payment clearing as two distinct but related steps.
00:04:37 For incoming and outgoing payments both steps are required. During payment allocation
the payment is assigned to a particular payment area
00:04:49 such as accounts payable, accounts receivable, or tax, and then to a particular business
partner like a customer, supplier, or tax authority within that area.
00:05:00 During payment clearing, one or several open items are matched to the payment and
cleared against it. The system uses the information like business partner and other payment
reference information, for example bank account and payment amount,
00:05:15 in a first step to select the correct business partner and in a second step to select the
correct open items. Usually all relevant information is available and correct and both steps
are performed automatically by the system.
00:05:29 In some exceptional cases, for example missing customer or supplier information or
transaction charges on foreign payments, the system cannot perform the processes
automatically.
00:05:40 In these cases, which should be less than 5%, manual payment allocation or manual
payment clearing tasks will be created. These manual tasks will require user involvement.
00:05:51 I will show you later in the system a manual clearing task created by the bank statement we
will upload. As we have seen already in Unit 1, it is possible to fully automate the payment
process by using out-of-the box payment integration scenarios.
00:06:08 These are provided by our partners. As an alternative you can implement a customer-
specific integration based on Web services.
00:06:16 If you receive your bank statement files electronically, the manual effort for the end user is
to complete the tasks of the payment allocation and payment clearing processes.
00:06:28 Now let's start with the system demo. We are logged on again as Eduard Becker.
00:06:35 The first thing I want to show you is the master data of the bank, which I explained in one of
the first slides, that we create a business partner with the role "bank".
00:06:47 You will find that in "Liquidity Management", and there we have the view "Master Data", and
below that the "My Banks" view.
00:06:59 Here we have defined one bank, it's Deutsche Bank AG, and if I click on the internal bank
ID on this link, I will get the detailed information on that bank.
00:07:11 This is just an overview first of all. If I click on "View All", I can see more details.
00:07:19 For example, we can see here the national bank code, the bank name, address, and other
stuff. But what it is important as well is the tab "Payment Formats"
00:07:30 because here you can define which payment file formats are used, or can be used, for this
bank. And this is defined here.
00:07:40 Another important tab is "Bank Accounts". As I mentioned on the slide, you can define for
your house bank, or for one bank, all related bank accounts.
00:07:49 This was done here. So, for example, we have one bank account number which reflects a
fixed-term deposit for the company "1000 - Almika".
00:07:58 We have a checking account for the same company, but you can see here as well that we
have another checking account for another affiliated company called "Innovat".
00:08:08 If we scroll down a bit, we can also see additional information here, for example also the
"Account Determination Group", which I mentioned on the slide –

6
00:08:18 this group is relevant to find what Carsten already explained in his units in the first week – is
defined to find the right general ledger account for the bank.
00:08:30 And here you see that you can define for this different bank account the same "Account
Determination Group". That means they are reflected on the same general ledger account,
00:08:41 so you do not need to create a specific general ledger account for each bank account, but
you can aggregate them on one general ledger account.
00:08:51 So that's it so far for the bank. That's what I wanted to show you here.
00:08:57 Let's close "Liquidity Management" again. Now I want to show you the bank statements,
which are also in "Liquidity Management".
00:09:04 There is a "Bank Statements" view. And here we can see that for this month bank
statements were already "Posted", also one "Canceled".
00:09:13 We can see here at the end the "Postprocessing" status. For this one there's nothing
required, but for these two something still needs to be done.
00:09:23 And what I want to show you right now is how to upload a bank statement based on a file
that you received from your bank. So when you click on "New", "Bank Statement Upload",
00:09:34 you get the last information that was used by the system for another uploaded bank
statement. So here we have the file type "Bank Statement", the company, the bank ID which
was selected, and the import format.
00:09:48 I created a file with some test data... and if all the information is available, that should work,
and we do not need to do any tasks afterwards.
00:10:03 So I will start the file upload right now here. The system now considers this TXT file and will
process it and do the necessary postings first of all for the bank statement itself,
00:10:16 and then also tries to allocate and clear the payment items, the transactions on this bank
statement. Let's refresh this view, then we see the bank statement is already posted,
00:10:28 and the "Postprocessing" status is required here as well. So if we click on the bank
statement ID, you see here the information for the bank statement.
00:10:39 You have an opening balance, a closing balance, the total credit amount, the total debit
amount. And in addition, you can see here the file ID which was used,
00:10:50 and here you see also the link to the "Journal Entry ID", or entries which were created,
because we have defined three sets of books here,
00:10:59 which are now first of all in the German GAAP set of books, so the postings are here, "Cash
in Transit" against "Bank".
00:11:07 This is always the case only for the bank posting, for the first posting without allocation to
make sure that the bank balance is always posted in the system and correct.
00:11:22 So what I want to show you right now, if you go to "View All", you can also see the
transactions for this bank statement under "Transactions".
00:11:33 And here you can see there is nothing required anymore. These were assigned already.
00:11:38 So we have here a payment method "Incoming Direct Debit". So the posting for the bank
statement was done,
00:11:45 but also the assignment to the relevant open payment items, payments in transfer, was
done automatically. So if we go into the details, you can see here in the memo line "DATA-
Einreichung Lastschriften", so direct debit.
00:12:04 This is also determined by the system... by the payment method. And you can see here... let
me quickly check one thing if I can scroll down a bit more...
00:12:15 now the assigned payments which were done here. We have here the document ID "51",
which was also a direct debit for the customer Silberstern.
00:12:29 Unfortunately, you cannot see the full name. You see here the transaction amounts and
also the allocated amounts.
00:12:37 Here the full process is done already. We have executed the direct debit run in this system
for these customer invoices
00:12:45 and the bank statement was uploaded electronically and all the things were cleared
automatically by this bank statement. In addition, there was another payment method, the
"Outgoing Bank Transfer" of €3,584.08 here.

7
00:13:02 Here the same, if we click on "Not Required", we get the information of the payment
allocation. You see here: "Payment Allocation: 63".
00:13:10 And again it was a DTA file which was provided, that was the one that we created in the last
unit. And if we scroll down, we also see our payments we created at that time.
00:13:24 For example, for Eduard Becker the €10.00. If you remember then for my colleague Melanie
the €74.00 which were paid for the travel and expense report.
00:13:37 There is one topic open, that's the "Incoming Bank Transfer". You can either postprocess it
here directly from the bank statement...
00:13:50 then you would need to check what's missing here. So we can see here the account owner
is "HPA Sweden", which is a customer.
00:13:57 If I look for this customer, I can select him. Then we can scroll down and check the open
items which are selected when we enter this customer ID above.
00:14:11 And if I now select the customer invoice ID which is mentioned here, and also which we saw
in the memo line, we can assign it to the payment.
00:14:25 But the issue is in this case that we have a transaction amount on the bank statement,
which means a payment amount of €11,025.00,
00:14:34 and the allocated amount of the customer invoice is €11,250.00, so we still have an open
amount of €225.00, and then that needs to be checked by a colleague.
00:14:45 What's the reason for it? Is it, for example, cash discount taken which was not allowed?
00:14:51 Do we accept it? That is one possibility we can do – that we just say we select it here and
enter here the cash discount taken, because it's quite a good customer, and therefore we
just say it's fine.
00:15:07 Or if we do not want to do that, we have other possibilities like leave the open item... or
leave this amount of €225.00 as an open item still on the account, or other stuff.
00:15:20 We will do it right now so that we say it's the cash discount, he just took it because normally
we have this agreement, and then just post it.
00:15:39 Let's go back again to the bank statement already. So we saw here that nothing else
needed to be done.
00:15:48 Perhaps we can also quickly check the "Bank Charge", how this was posted. So if we go to
this one, you see here the external transaction code was derived.
00:16:01 It's the payment method "Bank Charge", and based on that, a posting was done
automatically.
00:16:09 We go to "Document Flow". And there we see now the payment allocation – this is here –
and the assigned journal entry to that.
00:16:22 And if we click on that, we can see the posting for the bank charges. So you see here, as
we have the first posting "Cash Disbursement (Clearing Account)" against bank,
00:16:34 we have as the second posting "Bank Fees" as an expense against this "Cash
Disbursement (Clearing Account)", and therefore this one is cleared.
00:16:44 And everything is done here as well. The same is now true for our "Payment Allocation: 65",
which is right now posted as well.
00:16:54 So if we go here to "Document Flow", you see the list is... or the document flow is a little bit
longer. Then the one we just had for the information of the bank charges.
00:17:09 And you see here again that you can jump from each document, or source document, to the
journal entry if needed. On the other hand, you can do these kinds of postings as well or do
postprocessing as well from other areas.
00:17:30 We were going directly from the bank statement but you can also go into the "Receivables"
work center, for example into "Work".
00:17:39 That's the "push principle": bring the work to the user, which you have already heard from
my colleagues in some units. And there you can then check if there is any clearing task
available.
00:17:51 You can also check here from the "Work" overview whether you have any "Clearing
Receivables Tasks", for example. Or if you go to "Payment Management", you can check if
there are open tasks for payment allocation.

8
00:18:05 And you see here for the other bank statements where we saw that postprocessing is still
required, that we still have some business tasks for the payment allocation open here, and
they need to be executed, processed, to complete that.
00:18:22 So far that's it for the demonstration and the system. Let's go back to the slides.
00:18:31 So let's summarize this unit. SAP Business ByDesign provides standard configuration
settings like preconfigured electronic bank statement formats
00:18:38 to reduce the implementation effort. An operational bank and cash management in the
system optimizes the processes and minimizes the chart of accounts.
00:18:48 Automatic payment allocation and clearing processes help to reduce manual effort for the
end user. And finally, it is possible by payment integration scenarios from our partners to
automate the complete payment process.
00:19:02 In Unit 3 we will have a look at petty cash payments. Thanks for your attention.
00:19:06

9
Week 4 Unit 3

00:00:12 Welcome back to our next unit of Week 4. Unit 3 will concentrate on petty cash payments.

00:00:18 In the past two weeks we talked about payment processes regarding bank accounts. In this
unit, I want to show you how to process payments by petty cash in the system.
00:00:29 Let’s assume an employee bought flowers by cash or received an advanced payment for a
travel and expense report, which was by the way demonstrated in Unit 3 of Week 3 by
Melanie.
00:00:40 Petty cash transactions collect transactions of type cash in or receipts and cash out or
disbursements. Offset for cash disbursements and receipts are:
00:00:51 cost/revenue + VAT, payables/receivables, and cash. In SAP Business ByDesign, these
petty cash transactions are structured as ingoing and outgoing cash payments
00:01:04 with reference to items, with direct posting to G/L accounts or cash transfers. Each source
document in your petty cash creates one or more journal entries, which depends on the
number of sets of books.
00:01:17 All transactions are reconciled with the general ledger account for cash. So the petty cash
can be regarded as a cash subledger similar to a bank.
00:01:27 If your company manages one or more petty cash funds, you need to make sure that
sufficient cash is stored in each of them, but at the same time prevent excessive amounts of
cash accumulating.
00:01:38 Therefore, it is possible to make cash transfers between two petty cash funds, from petty
cash to a bank account and vice versa. In this way, you can control liquidity and minimize
security risks.
00:01:49 The cash journal provides the entire transaction history for a specific petty cash fund. Here
you can also monitor, print, or reverse petty cash transactions if needed.
00:02:00 In addition I want to mention one thing. If you want to process sales transactions and cash
transactions from an external point-of-sale system,
00:02:09 SAP Business ByDesign provides an integration scenario. In this case, several payment
variants for point- of-sale transactions can occur,
00:02:18 like cash payments, credit card payments, or online payment services. Now let's switch to
the system demo.
00:02:28 We are again logged on as Eduard Becker. And the first thing is want to show you is in the
"Liquidity Management" work center,
00:02:36 which we have already seen before when we checked the bank data under "My Banks".
Now we go to "Petty Cash", and there you see all active petty cash here in this system.
00:02:50 At the top we have the general petty cash which is used. You see there is a balance of
€8,634.49.
00:02:57 And you can see that you also can block or close the petty cash here, of course closing only
if there is no balance anymore.
00:03:05 If you click on the ID, you will see more details. For example, you can see here the
company ID, which is assigned as "Almika" again.
00:03:14 The currency is EUR, you have a description here, and of course you also have again an
account determination group which is used to find the right general ledger account
00:03:26 if any transaction is posted. So far that's it for the master data of the petty cash.
00:03:34 Now let's move on to "Payment Management". Under the work center "Payment
Management", you can enter petty cash transactions.
00:03:45 So you see here again the active petty cash funds we have in the system. Again here so
see in the overview the balance amount – €8,634.49 is quite high.
00:03:56 You should decide whether you need to have such a high amount on this petty cash, and
maybe you want to transfer it. First of all, if we click on "View" you get an overview of
transactions which were done for this petty cash fund so far.

10
00:04:10 At the moment, we have selected "Confirmed of Last 7 Days". You can also select "All",
then you get all transactions which have been done so far.
00:04:20 You see the "Canceled" ones, but also the posted ones, the "Confirmed" ones. In the
overview you have the "Posting Date", the "Transaction Type" which was used,
00:04:32 like "Outgoing Cash Payment", "Outgoing Cash Transfer", or "Incoming Cash Payment".
You have a "Document Description", which you can see as well,
00:04:41 and of course at the end you can click directly on the "Journal Entry ID" and then you see
the posting and general ledger for it. Now let's assume we have a customer who comes
over to your office location and wants to pay an invoice by cash.
00:04:57 Then you would create a new "Incoming Cash Payment - Reference to Items". This is then
the screen where you can enter the data.
00:05:07 The payer would be your customer, of course – in this case, "Cargo Logistik Hamburg".
Then the system derives the open items which are available so far on this customer based
on the customer information.
00:05:22 And by selecting this flag here, you can easily assign this invoice so that this one is paid by
the amount which was brought by the customer to your office location.
00:05:35 In addition, you can enter more information. You can enter a receipt date, a receipt number,
a cash payer, or you can change the posting date or enter a document description.

00:05:46 You can also change the payment amount manually if you want to. So you deselect
"Calculate Payment Amount Automatically" and then you can overwrite the payment amount
as well.
00:06:01 We keep it like that. If you want to, you can also get a receipt out of the system.
00:06:08 This can be done... or you can see it already by pressing "Preview Receipt". Then you see
what is defined here in the system for petty cash transactions as a receipt form.
00:06:23 And if you're fine with everything, you can just say "Post". So that we can see the other
transactions which are available, you can also create... I'll close this one here...
00:06:38 you can then also create a new "Outgoing Cash Payment - Direct posting to G/L Account".
For example, an employee went to the post office and paid for postage.
00:06:50 In this case, you can but you do not need to enter any details for the payee. You have here
again here the receipt date, the receipt number – everything that you saw before.
00:07:00 And at the bottom you have to add now... you cannot select an open item, or course, but
now you have to add an account determination group.
00:07:10 So, for example, select it here from the list – here we see "Postage" – or you can also just
enter it as text here in the field, and then the system will propose it.
00:07:24 Let's say the employee paid €25.00. And of course there is tax on that, but the reduced rate,

00:07:34 so you can select the tax rate for that and the system will also calculate the tax amount. In
addition you can assign it to a cost center.
00:07:42 Let's say that was for financials. And if you're then fine with everything, you can post this
one as well.
00:07:51 And the third option you have is that if you say your balance on your petty cash is now too
high, we now have a current balance of €11,584.49,
00:08:02 you can, for example, create a new "Outgoing Cash Transfer" to bring your money to the
bank. Let's say you want to transfer €8,000.00, then you can select the "Bank Account" here
or you can also select another "Petty Cash".
00:08:18 Select the bank account... and then just "Post" it.
00:08:24 The system will then create an incoming bank transfer for the bank account, and then you
can just use your bank statement when the incoming cash is brought to the bank
00:08:38 and you get a confirmation by the bank statement that this is then cleared automatically.
And the petty cash now already has the correct balance of €3,584.49.
00:08:50 So again, the cash journal here shows you all petty cash transactions which have been
done so far. Let's see if it needs to be refreshed.

11
00:09:05 I will just close it and go in again. So now we are here.
00:09:12 Now we also have our cash transfer of €8,000.00. And you can easily click on any of the
journal entry IDs to check what was posted in the background.
00:09:23 You have per set of books, of course, a journal entry again. In this case in this system we
have "German GAAP", "German Tax (BilMoG)", and "IFRS".
00:09:31 The default set of books is "German GAAP", and you see here it was posted "Cash" to
"Cash in Transit", or credit on the "Cash" account and debit on the "Cash in Transit"
account, for example, for this cash transfer,
00:09:45 or for the expenses for the postage. "Cash" was posted on the credit side, "Postage" as
expenses on the debit side,
00:09:58 and of course the input VAT which needed to be posted. If you've now done anything
wrong, you can also reverse transactions here in this view.
00:10:09 Then you just select one of your payments or transactions you have here, and then just say
"Reverse".
00:10:17 The system then proposes a "Posting Date". You can overwrite it and you can also enter a
"Document Description" for the reversal,
00:10:23 and you just say "OK", and then the transaction is reversed again.
00:10:30 We have to refresh again, and then you see it's gone. That's it so far for the system
demonstration, now let's switch back to the slides.
00:10:43 So what are the key learnings of this unit? You learned that you can record any cash
receipts and cash disbursements for petty cash funds.
00:10:50 By using cash transfers you can ensure that you have sufficient cash on your petty cash
funds or prevent accumulating excessive cash amounts.
00:10:58 This enables you to control the liquidity and minimize security risks. Unit 4 of this week will
cover how to monitor cash and liquidity based on provided reporting capabilities.
00:11:08 Thanks for your attention, and see you again in Unit 4.

12
Week 4 Unit 4

00:00:12 Hello and welcome back to the last unit of

Week 4. In this unit; I want to show you how monitoring cash and liquidity takes place in the
system.
00:00:21 So far we have seen several business scenarios up to the payment process. Based on this
data, we will analyze reports like today’s cash position and the liquidity forecast.
00:00:32 You will see how the system collects and aggregates relevant liquidity information based on
operational processes and which reports can be used to manage cash and liquidity.
00:00:44 You might remember this slide from Week 1. The main pillars of every company to control
their business from a financial point of view are:
00:00:52 "liquidity management" as an early-warning system and to ensure financing, "controlling" for
profitability, budgeting, and planning,
00:01:01 and "accounting" for your external stakeholders. In this unit we will concentrate on the pillar
"liquidity management".
00:01:12 In general, cash and liquidity management should be independent from accounting to
capture the complete information. It relies on the registers – not on source documents –
which guarantees avoiding double counting and full audit.
00:01:26 The relevant registers are: the cash register to get an overview on all cash receipts and
disbursements such as bank transfers, checks, payment advice, and planned items;
00:01:36 the payables/receivables and the tax register to get on overview on all open payables and
receivables from supplier and customer invoices, travel and expense reports, VAT
declarations which are not yet paid;
00:01:51 the purchase/sales register to get an overview on all open purchase, sales, and service
orders which are not yet invoiced. The purchase register only exists logically
00:02:02 because it's quite difficult and complex to collect the information of open purchase, sales,
and service orders. You would need to consider the order value, already existing deliveries,
confirmations, and invoices which are not yet paid.
00:02:17 Finally, liquidity management uses value dates and the currency of the company to
normalize data. The concept of collecting liquidity information in SAP Business ByDesign is
shown here.
00:02:30 Information on cash like the bank balance and bank advices sent by the bank, as well as
petty cash are taken into account as secure today. Cash in transfer like payments in transfer
to the bank, credit card settlements,
00:02:45 checks issued and deposited are incorporated by their respective value date. Receivables
from customer invoices and payables from supplier invoices, travel and expense reports,
00:02:58 and VAT reports are considered as cash with their respective value date, which is their due
date. Topics which are unsecure future like opportunities, sales contracts, and orders,
00:03:11 as well as purchase orders or contracts, are not taken into account. Other cash transactions
like payroll, treasury deals, receivables/payables of banks like loans or labor contracts

00:03:24 are not implemented in the system. These cash transactions can be applied as liquidity plan
positions manually.
00:03:34 So what is the business value of monitoring cash and liquidity? Liquidity information is
automatically collected and aggregated and by that you achieve better transparency to
manage the liquidity position.
00:03:47 Based on reports like the daily cash position or liquidity forecasts, you can analyze your
actual and future cash balance and optimize your liquidity position by strategies like
investing or borrowing money,
00:04:00 transferring funds, or optimizing cash flow time lines. Now let’s go to the system.
00:04:09 I'm logged on again as Eduard Becker. And we will move first of all to the work center
"Liquidity Management".

13
00:04:20 In the work center "Liquidity Management", you will find the view "Cash Position". And in
this view or in this report, you get an overview of all balances of your bank accounts,
00:04:34 the actual balance and also the petty cash, which you can see here. So at the beginning at
the top we have our checking account with an "Opening Cash Balance".
00:04:45 Then we see the "Collections" which are already in transfer, and also the "Disbursements".
Then the system calculates the "Net Flows" based on that and we get a "Closing Cash
Balance" for this account.
00:05:00 We have the same for the fixed-term deposit. Of course, there are no transactions planned
at the moment,
00:05:06 and, as mentioned, for petty cash. You can also go into "Analyze Data", then the report is
opened.
00:05:14 And you can enter additional selection criteria if you want to. For example, you could say
that you just want to see all of your cash storages,
00:05:23 so you can select them here as one possibility. Or you can say you want to see everything
in a different currency, for example,
00:05:30 or you just want to see your bank accounts and then you can select the respective bank. If
you had more than one house bank, of course you would see all the bank accounts here in
this overview.
00:05:42 So if you now want to see a little bit more of the details, you can drill down here. and just
open the "Cash Position - Transaction Details", and then you will see what this balance of
€8,171.06 consists of.
00:05:57 And if you remember perhaps from our last unit, we did the cash transfer from the petty
cash to the bank account. And that's why you now see here for the bank account this
incoming cash transfer.
00:06:10 It has not been posted yet from the bank statement and therefore it's still open, and is
recognized as a collection here.
00:06:20 The same way you can also drill down into the disbursements and have a look what's open
there. And here you see what I missed, to be honest, during Unit 2... oh no, Unit 1,
00:06:36 because we wanted to pay everything and I forgot to pay the tax due payment. This is why it
is still shown here as a disbursement,
00:06:45 and this is the whole amount that we see here. So much for the cash position.
00:06:53 In addition, I already mentioned in the slides that we also have the "Liquidity Forecasts".
This is also in the "Liquidity Management" work center, and you find it under the view
"Liquidity Forecasts".
00:07:05 What you need to do for a forecast is schedule a run because the system will pick up from
the registers, from the payables and receivables register,
00:07:14 the open items to make it possible to show what will come up on cash positions in future.
And therefore you need to schedule that because this changes from day to day
00:07:29 and then the system needs to pick up the new items, of course. So we have a run
scheduled here, and you also see the application logs here.
00:07:38 This run is performed every day. I did it today, I started it this morning already, because it
normally starts during lunchtime
00:07:46 and that's why I wanted to prepare it already now for our recording here. And if you want to,
of course you can go into the "Application Log ID",
00:07:56 but you see already here the overall status is green, so everything is fine. We have no
errors and that's why I would just like to go directly to "Liquidity Forecasts" itself.
00:08:07 In the report, you see here the overview of all liquidity forecasts. You see that one is
"Rejected" here, the other ones are all "In Modification".
00:08:19 If you are fine with a forecast, you can release it and then this data will stay as it is. I will
now consider the first one from today.
00:08:28 And if you scroll down, you already see the overview of this report – what it shows us. You
see a total of your liquidity positions.

14
00:08:39 So these are all bank balances and all petty cash funds you have. And also here the
structure is the same.
00:08:47 You have the "Opening Cash Balance", the "Overdue Payments", "Payments" in general,
then "Receivables/Payables" in the future, then a calculation of the "Net Flows", and at the
end "Closing Cash Balance".
00:09:00 Below that you get the details, first of all by bank, but you can also see that if you go into
"Analyze Data" by "Bank Account".
00:09:10 And at the end, we also see payments which are not assigned to any bank account yet. This
is why they are shown here as "Not assigned".
00:09:22 So let us go quickly into "Analyze Data" so that you can see which options are available
there. You see here in the selection that both companies – "1000" (Almika) and "2000"
(affiliated company Innovat) – are selected,
00:09:45 so we really have the full overview of all bank accounts and petty cash funds. You see here
again the "Liquidity Forecast ID".
00:09:52 You could select a specific time period. At the moment we see the liquidity level on a daily
basis.
00:10:00 You can select a different "Display Currency - Conversion Date". If we also have included
transactions in foreign currency, they will be converted.
00:10:10 And as mentioned before, you can also select a specific bank account. These are the
options available here, but you can also switch just by clicking a different view
00:10:21 to a different view of the liquidity forecast. So now we've changed from the daily view to the
monthly view,
00:10:31 and you see now the amounts aggregated by each month of this year into the future for half
a year. Also here it is possible...
00:10:47 for you to jump into the transaction details, if you want to. So, for example, if you want to
have a look at what it is about here, the €17.85 – it's just a small amount but let's use that
one anyway.
00:11:05 What is behind that? Sorry... Then you can open the "Liquidity Forecasts" transaction
details here,
00:11:14 and you see that this is a supplier invoice which is posted with an expected value date or
where the due date is February 2, and that's why it's included on that day.
00:11:29 You can also go further into the future. For example, here we have €1,500,000.00 – what's
this about?
00:11:39 So if you go into that, you will see that this is a bank transfer, it's an "Expected Cash Flow",
and that was done by a "forecast planning item", which I want to show you how to create
right
00:11:57 Let me quickly show you one thing, if we go into the... it's a little bit difficult to scroll on this
screen here...
00:12:07 if we go to the future, I will now do a planning item for February 10. You see that there is no
transaction listed here.
00:12:19 And then afterwards we can refresh – that's something I want to show you as well. So if we
go into "Forecast Planning Items", this is where you can create these planning items.
00:12:30 You can do that either manually – just create one planning item – or also upload planning
items from Excel. Or you can also copy an existing one.
00:12:40 I have already prepared one here, and by clicking on the "Transaction ID" you can just edit it
still as long as it is in preparation.
00:12:49 So I just mentioned I want to do that so that we can see it a little bit easier. I don't have to
scroll that far into the future... on February 10...
00:12:58 and it should expire – that means that it will not be considered in the liquidity forecast
anymore. On February 15... so that's it, it's €2,300,000.00, a bank transfer outgoing.
00:13:10 And this is for employees – let's say this is a bonus payment or something like that. I will
release it.

15
00:13:19 You see it's saved now – I cannot change anything anymore, just the expiration date. And if
we now go back to "Liquidity Forecasts", we still have the issue that this €2,300,000.00 is
not included
00:13:34 because the system would need to do a refresh. So you see there is still nothing in.
00:13:40 If we now do a refresh of planning items... then you can scroll down again...
00:13:53 and if we then go to the... right side... sorry for this scrolling issue...
00:14:04 then you now see the €2,300,000.00 which we entered as a planning item. If you are fine
with this forecast, then you can just say you want to release it to make sure that nothing has
changed anymore,
00:14:17 and this is done by clicking the "Accept" button. And then the forecast is released and can
always be considered and taken into account again if you want to check anything,
00:14:30 but it will not be changed anymore. So that's it so far for the system demo, let's go back to
the slides...
00:14:42 So let's summarize this unit. Automated processes collect information about account
balances and transactions from banks
00:14:49 as well as internal information on collections, disbursements, and other financial activities
across different business units within the company.
00:14:59 Built-in analytics and reporting ensure a seamless consolidation of the liquidity information
in today’s cash position, as well as various forecast sheets.
00:15:08 Based on that, the system enables you to do a comprehensive liquidity analysis and to
project cash shortages or surpluses for a variety of reporting criteria and timelines.
00:15:22 This helps you to optimize your liquidity by cash flow impacting strategies. Next week we
will focus on financial and management accounting.
00:15:30 I will show you the concept of manual postings in accounting, the closing process, and
relevant information to serve your external and internal stakeholders.
00:15:39 Thanks for your attention, and see you again next week.

16
 www.sap.com

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

No part of this publication may be reproduced or transmitted in any form
or for any purpose without the express permission of SAP SE or an SAP
affiliate company.
SAP and other SAP products and services mentioned herein as well as their
respective logos are trademarks or registered trademarks of SAP SE (or an
SAP affiliate company) in Germany and other countries. Please see
http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for
additional trademark information and notices. Some software products
marketed by SAP SE and its distributors contain proprietary software
components of other software vendors.
National product specifications may vary.
These materials are provided by SAP SE or an SAP affiliate company for
informational purposes only, without representation or warranty of any kind,
and SAP SE or its affiliated companies shall not be liable for errors or
omissions with respect to the materials. The only warranties for SAP SE or
SAP affiliate company products and services are those that are set forth in
the express warranty statements accompanying such products and services,
if any. Nothing herein should be construed as constituting an additional
warranty.
In particular, SAP SE or its affiliated companies have no obligation to pursue
any course of business outlined in this document or any related presentation,
or to develop or release any functionality mentioned therein. This document,
or any related presentation, and SAP SE’s or its affiliated companies’
strategy and possible future developments, products, and/or platform
directions and functionality are all subject to change and may be changed by
SAP SE or its affiliated companies at any time for any reason without notice.
The information in this document is not a commitment, promise, or legal
obligation to deliver any material, code, or functionality. All forward-looking
statements are subject to various risks and uncertainties that could cause
actual results to differ materially from expectations. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of their dates, and they should not be relied upon in making
purchasing decisions.