What is Actual Bank Account Balance in New Cash?

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This essay is to clarify the frequently asked question, what is bank account
balance in new cash reports, like cash position. The question can be answered if we
clarify what the actual bank account balance is, as the forecasted balance is
simply adding forecasted cash flows.

To achieve the goal, we will first clarify several typical misunderstandings (what
is not actual bank account balance in cash position), then what is the logic in new
cash management, finally, what are options you can get the desired bank account
balance in new cash.

Misunderstandings

Misunderstanding#1: actual bank account balance in cash position = corresponding

bank G/L account balance

You probably want to compare the balances between cash position and G/L, because
both are ‘balances’. It is not correct. Simply because G/L account balance is based
on Posting Date while bank account balance in cash position is based on Value Date,
or sometimes, we call the difference between Accounting View Balance and Cash View
Balance.

If you think in your case Value Date is always the same as Posting Date, but the
balances still could be different, because different from classic cash management,
the balance in new cash management is not only from accounting, but also from other
sources, for example, bank statement that is not yet posted. The enhancement can
help Cash Manager to get real-time up-to-date balance as soon as the statement is
imported, instead of waiting for the accounting postings, because posting could
fail.

Misunderstanding#2: actual bank account balance = balance from bank statement

(FEBKO)

It sounds like a reasonable expectation as well. However, it is not 100% correct,

in some cases, bank statement contains items whose value date is not the same as
bank statement date, for instance, several days in future, means, those cash flows
also are listed in bank statement that you can post to your G/L, but in the eye of
cash manager, the money is not yet hit the bank account, the company cannot make
use of it. In this sense, bank statement is more for book keeping instead of
telling you the exact money you are having in bank account.

Briefly speaking, actual bank account balance in cash management is simply the
money that is physically in your bank account that you can make use of right now,
which usually you can request via bank portal.

The Way New Cash Management Calculates Actual Bank Account Balance
The second question is how new Cash Management calculates actual bank account
balance.

We don’t get the available balance directly from bank, which is probably quite
costly and some banks even cannot provide such service (API), thus we get the
information from what is available in SAP S/4HANA system.

As you probably already know, in new cash management, nearly all cash flows are
from one table FQM_FLOW, aka, One Exposure from Operations, and actual bank account
balance is purely from this table. One Exposure from Operations is kind of
container, which integrates information from different source applications, like
Accounting, MM, SD, TRM and so on. And in principle, each entry in FQM_FLOW is a
flow, means, we don’t save balance directly.

This leads to the way how new cash management calculates balance: it aggregates all
actual cash flows from One Exposure from Operations.

Actual Cash Flows can come from different source applications, including:

Day-end Bank Statement, if one bank statement is imported, all items are
integrated to FQM one by one, the value date from bank statement items (FEBEP) is
saved in FQM as well
FI postings on bank G/L accounts, which could be manual posting or integrated
posting from bank statement importing process. And once bank statement items are
posted to FI, the actual flow from bank statement are removed from FQM to avoid
duplications.
Bank account balance uploaded via excel for those bank accounts which are
operated remotely.
Bank account balance available in FQM via initialization tool, after
initializing the bank account balance, the actual balance later on will be the sum
of initialized balance and actual cash flows afterwards.
In multiple system scenarios, you can integrate actual cash flows from remote
system via Distributed Cash Management or Liquidity Planner, those actual cash
flows also contribute the actual bank account balance.

How to Get Desired Bank Account Balance

Now, things become clear how you can impact the balance if you understand how new
cash calculates the balance or what processes will impact balance. You can have
following options/tools to get the balance:

You need to initialize the bank account balance (FQM_INIT_BALANCES – Import

Initial Bank Account Balances) in the very beginning before loading any actual cash
flows from other source applications. This is only required for bank accounts which
are operated centrally (in the same system as cash management), and this is setup
in Bank Account Management master data, Connectivity Path, more specifically.
Import day-end bank statement – this is obvious.
Post FI document on bank G/L accounts, system recognizes bank G/L account with
pre-defined logic, while you can overwrite the rule by assigning flow type to the
G/L account.
For the remote operated bank accounts, you can upload daily balance via excel
in tool FQM21 – Import Bank Cash Balances.
If you have setup the remote system scenario (distributed cash or liquidity
planner), you can push or pull actual cash flows from remote systems. And for
distributed cash management, you can map the G/L accounts to bank account in BAM-
connectivity path. While for liquidity planner, you can only report on G/L accounts
by default.