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Cash Accounting and Cash Flow Planning with SAP Liquidity Planner

Stephan Kerber, Dirk Warntje

Content Introduction .............................................. 3

Structure of the Book ..................................... Acknowledgments .......................................... 3 4 3.4 Cash Accounting Processes ................... 28 Information Acquisition from Assignment Mechanisms ...................... 28 Information Acquisition from Bank Statement Information ................ 29 Information Acquisition from Financial Accounting ............................ 31 6 7 3.5 8 9 Manual Assignment and Manual Transfer Posting ................................... 36 Analysis Reports ................................... 36 Conclusion ........................................... 37

Business Overview .................................. 5

1.1 1.2 1.3 1.4 1.5 1.6 The Concept of Cash Accounting .......... Tasks of Cash Accounting and Liquidity Planning ................................. Recipients and the Need for Information .......................................... Financial Accounting and Cash Accounting ................................... Differences to Cash Management ......... 5

Conclusion ........................................... 11

SAP Liquidity Planner: Liquidity Planning and Reporting Using SAP BW/SEM ............................... 39
4.1 Modeling in SAP BW/SEM .................... 40 SAP Business Content ......................... 40 Master Data ......................................... 45 Characteristics ..................................... 53 Planning Layout in SAP SEM-BPS/BW-BPS ........................ 54 4.2 4.3 4.4 4.5 The Liquidity Planning Process .............. 63 Extracting Actual Data .......................... 64 Reporting in SAP BW ............................ 67 Conclusion ........................................... 69

Case Scenario: Implementing Cash Accounting and Liquidity Planning .... 13

2.1 Conclusion ........................................... 15

SAP Liquidity Planner: Liquidity Analysis Using SAP Actual Calculation ................................................. 17
3.1 3.2 3.3 Overall Process and System Integration ............................................ 17 Technical Settings in SAP Actual Calculation ........................................... 17 SAP Actual Calculation (Cash Accounting) ................................ 19 Data Model and Master Data ............... 19 FunctionalityOverview ..................... 21 Customizing SAP Actual Calculation ... 21 Tools .................................................... 26 Tables ................................................... 27

Liquidity Planning and Reporting Without SAP BW/SEM .......................... 71

5.1 5.2 5.3 5.4 5.5 5.6 Overview .............................................. 71 Customizing .......................................... 71 Master Data and Actual Data ................ 75 Planning ............................................... 76 Reporting ............................................. 77 Conclusion ........................................... 78


Outlook ...................................................... 79 Appendix .................................................... 81

Lee Iacocca and Cash Flow ............................. 81 Indirect Cash Flow .......................................... 81 Plug-in ........................................................... 81 Case Scenario ................................................. 82

Bibliography .............................................. 83 Index ........................................................... 85

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This book is about money. Where does money come from and where does it go? Because liquidity is one of the critical success factors for a company, it is integral to running a business. The most important aspects of liquidity are the ability to ensure solvency and generate payment surpluses. In this context, companies constantly try to analyze and plan their cash ow. Unfortunately, established applications such as Accounting or Cash Management dont provide the necessary information on cash ow required by companies; however, SAP Liquidity Planner affords you with the much needed relief in this area, as shown by its rst implementations in both nationally and internationally operating companies. The complex requirements placed on a retrograde liquidity analysis, a decentral planning tool, and an efcient reporting were met by the use of SAP Liquidity Planner. SAP Liquidity Planner is a component that consists of two applications: Cash Accounting (SAP R/3) and Liquidity Planning (prior to Release 3.5, it was part of SAP Strategic Enterprise Management (SAP SEM), from SAP Business Information Warehouse (SAP BW) Release 3.5 onwards, it has been included in BW). Cash accounting determines the cash ow either based on an electronic bank statement or data from nancial accounting. Liquidity planning is carried out using the planning functionality in SAP BW. Reporting is performed by SAP BW. In the past, this component was part of Corporate Finance Management (CFM), and since the introduction of mySAP Enterprise Resource Planning (mySAP ERP) in 2004, it has been located in the Cash Management and Liquidity Management area as part of Financial Supply Chain Management (FSCM). This SAP Press Essentials book outlines the concepts of cash accounting and liquidity planning, as well as the resulting requirements that a business software must be able to meet. In this book, the authors demonstrate how

you can meet these requirements using SAP Liquidity Planner and also, how you can implement this product. Readers of this book should have a sound knowledge of the accounting application in SAP R/3 as well as SAP BW and SAP SEM.

Structure of the Book

Chapter 1 outlines the business principles and provides clear denitions of the terms used in the context of cash accounting and liquidity planning. In addition, the concept of cash accounting is introduced, along with a description of its interdependencies with accounting. In the nal sections of this chapter, we clearly distinguish SAP Liquidity Planner from SAP Cash Management. Chapter 2 describes a case study that is referred to and further developed throughout the book. We use this example to help you understand the functionality and the technical concept of SAP Liquidity Planner, but it should also serve as an aide to you in implementing this component. Chapter 3 and Chapter 4 contain a detailed description of SAP Liquidity Planner. They provide an insightful introduction to the two main areas of the product: Chapter 3 describes Cash Accounting (SAP R/3), while Chapter 4 deals with Liquidity Planning (SAP BW). In both chapters, you will also nd detailed information on customizing and the various functions of the application. Wherever necessary, the case scenario is referred to, enhanced, and completed. Chapter 5 describes a workaround for simplied liquidity planning and reporting in SAP R/3 without using SAP BW. Chapter 6 addresses possible developments and future requirements of SAP Liquidity Planner. The Appendix contains additional information.


SAP is a registered trademark of SAP AG, Dietmar-HoppAllee 16, D-69190 Walldorf. We would like to thank SAP AG for its permission to use the trademark and the materials provided in this book. Note that SAP AG, however, is not the publisher of this book nor is it responsible for the contents of this book. We would like to express our deepest gratitude to our colleague Robert Bieber who supported us with numerous tips and invaluable information.

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1 Business Overview

In this chapter, we will rst dene and differentiate cash accounting and liquidity planning. This is a rather important step in understanding these concepts as they are often used in a multitude of ways. Next, well describe the tasks performed by cash accounting and liquidity planning. Because cash accounting and general accounting are inherently interrelated, we should point out their interrelationships. Lastly, well describe the differences between cash accounting and SAP Cash Management.

Cash accounting records the changes of cash ows, cash ows being incoming and outgoing payments of liquid funds such as cash in hand and bank savings. In accordance with national and international accounting standards such as FASB and IAS, we will use the term cash ow in this book to describe the changes in the means of payment. Liquidity is therefore referred to as a nancial accounting-related concept. Within a certain period, cash accounting records transactions that have a direct inuence on the stock of liquid funds, regardless of the period the payments refer to (see Geuppert 2003, p. 8). This type of recording and displaying of cash ows can be compared to scal accounting, which is used in the public sector. Therefore, cash accounting distinguishes itself from accrual accounting and cost accounting. Figure 1.1 illustrates


The Concept of Cash Accounting

In business literature, youll nd countless discussions about the concept of cash accounting and its denition. In these discussions, youll also encounter the following terms: cash budget management, ow-of-funds analysis, and cash ow statement, as well as cash ow accounting.

Incoming/Outgoing Payments
Expenditure/Revenue Expense/Profit Costs/Benefits
Cash Accounting
Profit and Loss Statement

Data Source (SAP) Cash Accounting Accounting


Cash Basis Accounting

Cost and Activity Accounting

Figure 1.1 Cash Accounting in the Context of General Accounting (according to Baetge 1992, pp. 3)

Business Overview

the basic differences between the various types of accounting. In addition, it is now apparent that in business theory, cash accounting always refers to several periods. This concept is generally adopted by SAP Liquidity Planner. Because the SAP Liquidity Planner component consists of two applications (see Section 3.1), the rst application, SAP Actual Calculation, refers to past and current periods, while the other application, SAP Liquidity Planning (SAP BW/SEM), considers future periods.

up until one year before its insolvency, it wasnt able to meet its payment obligations. However, cash ow had already been negative in earlier years.

Cash Accounting

Liquidity Planning

t past current period future

Figure 1.3 Comparison of Prot and Cash Flow at W. T. Grant (Source: Largay/Stickney 1980, pp. 15)

The reason for such a discrepancy can be found in the different ways in which information is analyzed by accounting. For example, discrepancies can occur due to an in-

Retrograde Determination

Reciprocal Determination

creased stocking up of a warehouse, an expansion strategy that requires high investments, or by a bad overall economic situation during which extended terms of payment are granted. A classic example that personies this state of affairs, and is therefore frequently cited, is the situation at Chrysler Corporation at the end of the 1970s when Lee Iacocca assumed the position of CEO. At that time, Chrysler had a high stock of automobiles, compounded by a low demand for these vehicles. The cash ow situation was very critical (see also the section in the Appendix, Lee Iacocca and Cash Flow, or Iacocca 1984, pp. 200). These two examples (i.e., W. T. Grant and Chrysler) clearly show that in order to evaluate the degree of solvency, cash ow is a far better indicator than the prot of a company. Usually a companys external nancing potential, for example, by acquiring external capital, is rather limited. Due to the size of the company or its current situation (for example, high debt-equity ratio), external nancing can become increasingly difcult. For this reason, the internal nancing potential plays an increasingly important role within the range of different nancing possibilities for a company (dynamic aspect) (Amen 1999, p. 4). Internal nancing potential means that a company can

Figure 1.2 Time-Based Delimitation of Cash Accounting and Liquidity Planning


Tasks of Cash Accounting and Liquidity Planning

The primary task of cash accounting is to provide information on a companys solvency and internal nancing potential. Apart from that, it serves as a basis for the creation of ow-of-funds analyses and plannings. Compared to the balance sheet and the prot and loss statement, cash accounting enables you to better assess the nancial situation of a company. The ability to generate sufcient liquid funds from its business activities and to secure these funds in future periods is one of the prerequisites for a company to survive (static aspect) (Amen 1999, p. 4). Cash accounting supports a company in evaluating its solvency status as well as its insolvency risk. The comparison of prot and cash ow of the W. T. Grant company, as shown in Figure 1.3, demonstrates the importance of analyzing and determining the cash ow situation. Even though the Grant company was protable

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1.3 Recipients and the Need for Information

generate more revenue than expenditures from its activities. This potential is also referred to as internal nancing strength. If a company can continuously build up liquidity, in addition to conducting its regular business activity, this surplus is called strategic liquidity. To obtain universally valid and comparable information on the degree of solvency of a company, the internal nancing potential and the overall nancial situation, national and international accounting principles require ow-of-funds analyses or cash ow statements as procedures and display formats. Here a distinction is made between indirect and direct procedures. In this book we will only describe the direct procedure since cash accounting doesnt support the indirect procedure. Therefore, direct procedure will be a critical part of this book. You can nd an example of the indirect procedure, which is supported by accounting (SAP FI), in the Indirect Cash Flow section in the Appendix of this book. According to national and international regulations, the ow-of-funds analysis can be divided into three areas:

The total of the three areas represents the total cash ow of the company. The cash ow statement is an essential part of quarterly and annual reports since it meets the information needs of various recipients (see Section 1.3).


Recipients and the Need for Information

According to the Financial Accounting Standards Board (FASB), the major recipients of cash accounting information that is contained in a cash ow statement are the following groups (FASB 1978, para. 25):

Investors, lenders, suppliers, employees To investors, lenders, suppliers, and employees, a business enterprise is a source of cash in the form of dividends or interests , repayment of borrowing, payment for goods or services, or salaries or wages. They invest cash, goods, or services expect to obtain sufcient cash in return

Customers To customers, a business enterprise is a source of goods or service, but only by obtaining sufcient cash to pay for the resources it usesand to meet its other obligations can the enterprise provide those goods or services.

Cash ow from operating activities Cash ow from investing activities Cash ow from nancing activities

Management To managers, the cash ows of a business enterprise are a signicant part of their management responsibilities, including their accountability to directors and owners.

According to IAS 7, the basic structure of a ow-of-funds analysis could look as follows (Ktting/Weber 2001, pp. 467):

Cash ow from operating activities + Incoming payments from customers Outgoing payments to suppliers = Cash ow from operating activities (1)

Figure 1.4 illustrates the major important relationships between a company and its business partners in terms of activities and liquidity. Due to the different kinds of business relationships, each of the involved parties has a specic need for information with regard to cash accounting. The following list contains the most important items (Geuppert 2003, pp. 10, and FASB 1978, para. 24):

Cash ow from investing activities + Incoming payments from asset retirements Outgoing payments for asset acquisitions + Incoming payments from nancial asset retirements Outgoing payments for investments in nancial assets = Cash ow from investing activities (2)

For management

Ensuring solvency by optimizing cash ow based on short-term and long-term liquidity planning Determining the internal nancing potential, building up strategic liquidity, and determining requirements for external nancing

Cash ow from nancing activities + Incoming payments from equity allocations Outgoing payments to company shareholders + Incoming payments from borrowings Outgoing payments for loans = Cash ow from nancing activities (3)

Determining nancing requirements for planned investments and integration in cash accounting and liquidity planning

Business Overview

Investment Loan Dividends and Withdrawals



Amortization and Interest Payments


Payment of Activity

Payment of Activity

Payment of Activity




Cash Flow

Figure 1.4 Cash Inow and Cash Outow from a Companys Perspective (according to Geuppert 2003, p. 10)

Ensuring creditworthiness, particularly with regard to the requirements of rating agencies


Financial Accounting and Cash Accounting

The data source (see Figure 1.1) for cash accounting is the posting material in nancial accounting. In nancial accounting, cash accounts, balance sheet accounts, and prot and loss accounts (P&L accounts) are interrelated; therefore, we can also speak of a threefold accounting system. This account-based integration1, as shown in Table 1.1, enables you to determine the cash ow required in cash accounting.
Chart of accounts Cash accounts Balance sheet accounts P&L accounts

For investors and lenders (equity providers and providers of external capital) Assessing the ability to pay dividends, interest, and amortization

For suppliers Evaluating the creditworthiness and solvency and forecasting the payment behavior based on these evaluations

For employees Evaluating the creditworthiness, solvency, and future existence of the company

For customers Assessing the delivery reliability and the consistency of conditions

Cash accounting

Balance sheet Assets (without liquid funds)

Prot and loss statement

The different recipientsand therefore varying information needsdemonstrate the importance of cash accounting and liquidity planning.






Cash balance

P&L account

Table 1.1 The Three Parts of Accounting

1 Accounting and consequently ERP systems are structured according to the principle of double-entry accounting. A triple-entry accounting system hasnt been implemented yet.

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1.5 Differences to Cash Management

In addition, business transactions related to accounting can be classied as affecting net income and not affecting net income, and as having an effect on liquidity and having no effect on liquidity (Gebhardt 1999, pp. 21). The payment of a dividend, for instance, is a transaction that affects the net income and the liquidity; therefore, it is relevant for both cash accounting and the prot and loss statement. The depreciation of an asset merely affects the net income, but not the liquidity. This distinction makes it easier to determine the source of funds and their application. Figure 1.5 illustrates the relationships between the individual accounts in nancial accounting. Here you can see that there are 14 different account assignment types available to post business transactions in accounting. For each account assignment type, we have provided an example (the following numbers correspond to the posting example used in Figure 1.5): 1. 2. 3. 4. 5. 6. 7. 8. 9. Cash payment for ofce equipment Revenue from cash sales Depreciation of tangible assets Posting of supplier invoice Invoicing of an activity Dissolving of provisions Revenues from invoices Borrowing Payment of supplier invoices

It is apparent that the connection between two account assignment types demonstrates the source or application of funds. This is because the central task of cash accounting is the What for search: What have funds been received or paid for? Lets try to clarify this with another example. In the accounting department of a company, a supplier invoice (1) is posted. The posting displayed in Figure 1.5 affects the net income, but has no effect on liquidity. This is further claried by the posting example in Table 1.2.
Bank $ 100 Vendor (2) (2) $ 100 $ 100 Ofce equipment (1) (1) $ 100

Table 1.2 Vendor Payment

Then the open item is paid (2). According to Figure 1.6, this transaction has an effect on the liquidity, but not on the net income. Only when these two postings haven been linked with each other can you determine the cash ow according to its application. One hundred dollars ($ 100) was used for ofce equipment. This posting is a simple example of the direct determination of a cash ow.

10. Cash payment for material purchases 11. Accounting exchange on the assets side 12. Contribution in kind from shareholders 13. Clearing of receivables and payables 14. Accounting exchange on the liabilities side


Differences to Cash Management

In this section, well describe the primary differences between Cash Management and Liquidity Planner. SAP Cash Management is focused on short-term cash manage-

Figure 1.5 Accounting-Relevant Linking of Cash Accounts, Balance Sheet Accounts, and P&L Accounts

Business Overview

Cash Management
Cash Management and Forecast Revenues

Cash Accounting
Opening Balance Revenues

Customer Group X Customer Group Y


Revenue Liquid Tangible Assets Other


Vendor Group X Vendor Group Y

Closing Balance
Figure 1.6 Distinction Between Cash Management and Cash Accounting

Material Personnel Taxes

Closing Balance

ment, whereas SAP Liquidity Planner considers medium to long-term liquidity planning. Cash Management provides information on the current bank account status and it contains a liquidity forecast regarding incoming and outgoing payments from the perspective of payments for accounts receivables and for accounts payables (or write: payments to customer and to vendor). The bank accounts in the general ledger constitute the data basis for the bank account status. If a bank account shows a current status of $ 500, this status is displayed in the bank account status in Cash Management. The liquidity forecast uses accounts receivable and accounts payable as a basis. It evaluates the open items of suppliers and customers, and the terms of payment stored with the respective documents, and displays this information in the liquidity forecast. A cash ow is not determined, because only the open items are evaluated and displayed. In addition, the cash ows to be expected can be displayed only with regard to specic customers and customer groups, or suppliers and supplier groups respectively. The only information that can be deter-

mined is From whom and For whom. What the funds are paid for cannot be identied. Conversely, cash accounting refers to real cash ow and the source and application of funds can be identied. Unlike Cash Management, cash accounting requires all general ledger accounts that have an effect on liquidity, as described in Section 1.4. Moreover, cash accounting is part of an overall process that consists of cash accounting and liquidity planning, which will be described in further detail in Chapters 3 and 4. Table 1.3 contains a list of the most important differences:
Cash Management No consideration of cash ow No identication of source and application of funds Cash Accounting Real cash ow consideration Identication of source and application of funds

Table 1.3 Differences Between Cash Management and Cash Accounting


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1.6 Conclusion

Cash Management Accounting as the data source, but only bank accounts and subledgers Liquidity forecast (based on open items) View: Vendors and customers (groups) and bank account status No integration in planning process

Cash Accounting All relevant accounts of cash accounting chart of accounts as data source Forecast of revenues and expenditures possible (based on open items) View: Revenue and expenditure items Integrated planning process (SAP BW/SEM)

Table 1.3 Differences Between Cash Management and Cash Accounting (cont.)



In the following chapters, we dene the concepts of cash accounting and liquidity planning and introduce them in the context of different accounting types. Moreover, we describe the group of recipients and their need for information regarding cash accounting, and we highlight the interdependencies with accounting by clarifying how you can use the information from accounting to determine your cash ow situation. Finally, we describe the differences between SAP Liquidity Planner and SAP Cash Management to outline the tasks performed by SAP Liquidity Planner within the FSCM product portfolio.


2 Case Scenario: Implementing Cash Accounting and Liquidity Planning

Based on a specic real-life situation that weve encountered several times, we will build up a scenario for implementing SAP Liquidity Planner. In the subsequent chapters, this case scenario will be further developed in parts. This example is used to support your understanding of the functionality and the technical concept of SAP Liquidity Planner, but it will also serve as an aide in helping you to implement this component. The initial situation looks as follows: Well consider an international corporation, the IDES Group, which is structured as follows:

or three years. However, the company expects a decrease in prices in the long run. This means that the revenues from its core business will go down (cash inow reduction). At the same time, the company forecasts a strong increase in raw material prices and rising labor costs at the production sites. This will lead to a situation in which the expenditures in production will increase dramatically (increase in cash outow). Consequently, net cash ow will be strongly reduced in the coming years. Furthermore, company management expects product imitations to enter the market in two or three years, which could lead to price wars and further aggravate the situation. For this scenario, corporate management expects an even stronger reduction of net cash ow.

The corporate headquarters is in Germany. The central departments of corporate accounting and global treasury are also located in Germany.

Legally independent production sites exist in Germany and Eastern Europe. The sales and distribution network stretches across Europe and the US, with legally independent sales companies in the respective countries.

In the preceding year, the company acquired a USbased competitor in order to strengthen its market position abroad. This acquisition was nanced with a large bank loan that will be amortized within the next 10 years. So, for a period of 10 years, there will be payments for amortization and interest (increasing cash outow).

Research and development is located at corporate headquarters in Germany. IDES uses SAP as its standard business software with the currently implemented applications:

SAP FI for accounting SAP CO for controlling SAP SD for sales and distribution SAP MM for materials management SAP PP for production Corporate management realizes that a continued pursuit of its existing strategy can quickly lead to a negative cash ow situation; however, since the company is expected to remain sound, the management decides to develop a comprehensive strategy that should include the factors mentioned above:

Concerning ofce applications, IDES uses a standard off-the-shelf ofce software.

Future competitors will be met with a product offensive at an early stage. For this reason, investments should be made for the research and development of new products. At IDES, the development of a product takes two years. To cover R&D for this period, the

The current business situation of the IDES group can be described as follows:

Existing products have been introduced and distributed throughout the markets and will continue to be distributed at the same high level for the next two


Case Scenario: Implementing Cash Accounting and Liquidity Planning

company needs liquid funds (cash outow for research and development in the coming two years).

narios. The tool should also be used as a central reporting platform. SAP Liquidity Planner is precisely the tool that meets the companys requirements (see also Section 3.1). As mentioned in the introduction, SAP Liquidity Planner consists of two components:

The existing range of products will be introduced into new markets, especially in Asia. For this expansion, the company needs additional funds (cash outow for expansion to new markets). At the same time, management expects additional revenues from selling existing products to the new markets (cash inow from selling existing products to new markets).

SAP Actual Calculation (cash accounting) SAP BW/SEM (planning application and reporting)

The company wants to maintain the production sites in Germany. Therefore, corporate management will develop new work and production models with its personnel, which are intended to reduce costs and expenditures (reduction of cash outow in production for the coming years).

Cash accounting enables you to identify and evaluate the cash ows in the company with regard to their value dates. As SAP Actual Calculation accesses the data provided by SAP R/3 Accounting (cf. Section 1.4), management can ensure the quality of the actual data because of this integration. This data forms the basis for qualied plan/actual analyses. Since the planning and reporting functions in SAP Liquidity Planner are based on the functionalities of SAP BW/SEM, the company can optimize the advantages of this product. Corporate management benets from using SAP Liquidity Planner in the following ways:

In addition, the company checks whether the existing bank loan can be converted into a maturity loan. This measure would lead to a reduced cash outow for a period of 10 years (reduction of cash outow by rescheduling the existing loan).

Until now, liquidity planning has been conducted by the global treasury department. The policy unit receives spreadsheets from the individual subsidiaries and integrates them into a central liquidity planning document. This planning process proves to be too complicated, time-consuming, and rigid. A cash accounting based on value-date dependent documents from SAP FI is not carried out because Cash Accounting in SAP Liquidity Planner is currently not being used.2 The corporate accounting department merely performs an indirect analysis of actual data (indirect cash ow statement). The company management wants to use a tool that can measure (actual data) and plan (planned data) the individual cash ows. Based on the new strategy, corporate management realizes that a powerful tool is required for cash accounting and liquidity planning, but also for controlling the corporation in general. In addition, the decentralized planning process will become more efcient and less time-consuming. Furthermore, it must be possible to easily and quickly map the various planning sce2 As already described in Chapter 1, you cannot use the SAP Accounting module to directly determine your cash ow situation.

Direct determination of cash ows Quality of actual data by integrating SAP R/3 Accounting Extraction from the SAP R/3 systems into SAP BW Flexible planning functionalities to map different planning scenarios in SAP BW/SEM Successful implementation of an efcient corporatewide planning process due to the use of SAP BW/ SEM as a central planning platform (this is particularly efcient for decentrally organized companies)

Central reporting tool for all parts of the company Use of SAP BW/SEM for the planning aspects of SAP Liquidity Planner; this enables you to establish a relationship with other plannings (for example, sales and distribution plans, investment plans) and an integration with liquidity planning.

In various implementation projects, weve seen many companies struggling to survive with ever-changing market environments, similar to the initial situation described above. The companies need reliable and up-to-date information, as well as the ability to run through various


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2.1 Conclusion

planning scenarios. Often, the focus was on improving the planning process. Our experience has shown that these or similar situations, carrying out cash accounting and liquidity planning with SAP Liquidity Planner can be very useful. In the remainder of the book, well describe the functionality of SAP Liquidity Planner and how you can implement it. In the next two chapters, well only marginally refer to the above example and provide a detailed description of the technology and functionalities of SAP Liquidity Planner. When working in Chapters 3 and 4, you should use the IDES system provided by SAP with the following data:

Use the general ledger account, 100000 cash as an additional cash account. You should use the information and assignments provided in the following table (see Table 2.1).



SAP Liquidity Planner is the ideal tool for analyzing and planning cash ows. By using this tool, you can identify imminent bankruptcies due to insolvency and counteract them with the appropriate measures.

Company code 1000 for IDES AG, company code 2200 for IDES France, and company code 2600 for IDES Italia.

Use the international chart of accounts, INT.

Liquidity item (LI) Summarization item LI LI LI Summarization item LI LI LI LI LI Summarization item LI LI LI LI Summarization item LI LI LI LI 100000 110000 120000 130000 140000 141000 142000 150000 160000 170000 200000 210000 220000 230000 240000 300000 310000 320000 330000 340000 Cash ow from operating activities Revenues from product sales Revenues from services sales Raw materials Personnel Payments of wages and salaries Payments of social insurance contributions Payments for rents Payments for materials Payments for raw materials Cash ow from investing activities Expenditures for nancial assets Expenditures for tangible assets Revenues from enterprise transfers Capital gains Cash ow from nancing activities Revenues from borrowing Expenditures for loan amortization Revenues from interest Expenditures for interest payments

Account number -----------800002 800001 170000 -----------449000 and 430000 440000 471000 476100; 476000 300000 -----------133000 11000 11000 133000 -----------62110 62110 273100 220000

Table 2.1 Case Scenario: Liquidity Item and Account Numbers



ABAP editor 19 ABAP report 28 Account-based integration 8 Accounting 8, 11 Accounts receivable and accounts payable accounting 26 Account assignment type 9 Accrual accounting 5 Actual account 22, 23 Actual Calculation 14, 17, 19, 21, 27, 35 Actual data 14, 41, 64, 75, 76 Administrator Workbench 41, 64 Allocating assignments from FI information 22 Analysis report 36 Application menu 28 Application of funds 9 Assignment 23 from FI information 24 mechanism 21, 23, 28

Cash account 15 Cash accounting 3, 5, 6, 8, 10, 14, 19, 22, 28, 75, 79 Cash Budget Management 5, 71, 72, 75, 77 Cash inflow 8, 13 Cash Management 5, 9, 10 Cash outflow 8, 13, 14 Characteristic 49, 50, 52, 53, 54, 56, 73 value 73 Chart of accounts 8 Clearing document 21, 28 Clearing transaction 25 Commitment item 72, 73, 74, 75, 76 Communications structure 51, 64 Company code 19, 72 Company structure 71, 76 Consistency check 37 Corporate accounting 13 Corporate Finance Management 28 Cost accounting 5 Creditworthiness 8 Crystal Reports 40 Customizing 18, 19, 21, 22, 24, 71

Document update 75 Drilldown report 78

Electronic bank statement 21 Element definition 73 External capital 6 Extraction 64, 66 Extractor 17

Financial accounting 8, 9, 19, 21, 31 Financial accounting-related liquidity 5 Financial management area 71, 72 Financing requirement 7 Fiscal year variant 72 FI Document Chains 37 Flow-of-funds analysis 5, 6, 7 Flow-of-funds planning 6 Flow data 26, 27 FM area 72, 75 From Bank Statement 23, 30 From Bank Statement Information 23, 29 From FI Information 24, 26, 27, 33, 34, 35, 37 From Invoices 26, 35

Bank account 23 Bank statement 23, 30, 31 item 29 Basic InfoCube 44 Buffer item 35 Business Area 22 Business Content 40, 41, 42 Business transaction code 30 Business Transaction Events 18

DataSource 40 Data flow 45, 51 Data model 19, 28, 36 Data target 40 Default item 19, 22 Defining actual accounts 21 query-relevant G/L accounts 22 query sequences 22, 26 Deletion process 26 Determinability 20 Direct determination 9 Document chain 21, 24, 31

G/L account 26, 32 G/L accounts list 37 Global treasury 13, 14 GR/IR clearing account 25

Case scenario 13, 15, 18, 19, 20, 21, 23, 26, 31, 34, 36, 45, 52, 54, 55, 56, 59 Cash flow 5, 6, 7, 10 accounting 5 statement 5, 7, 81

Having an effect on liquidity 9 Having no effect on liquidity 9



Hierarchy 52 House bank 22, 30

N:M Treatment 24 Net cash flow 13 New Formula 68 Number range 19, 36 object 20

Rebuild 27 Recipients 20 Release status 17 Reporting 14, 40, 43, 71, 77 platform 14 Report Painter 73 Retrograde determination 21

IAS 5 IDES 13 IDES system 15 Implementing SAP Liquidity Planner 13 Indirect cash flow statement 14 InfoCube 43, 44, 48, 52, 66 InfoObject 40, 43 InfoProvider 43 Information System 28, 36, 71 InfoSource 40, 64, 65 Insolvency 81 risk 6 Installing assignment mechanisms 22 Internal financing potential 6, 7

ODS object 43 Online update 27, 28, 32 Overall process 21

SAP Actual Calculation see Actual Calculation SAP Business Content see Business Content SAP BW 14, 17, 39 SAP BW-BPS 54 SAP Liquidity Planner 6, 17, 39 SAP R/3 3, 14, 17, 65 SAP R/3 Enterprise 71 SAP SEM 3, 14, 17, 39 SAP SEM-BPS 48, 53, 54 Scheduler 66 Solvency 6, 7 Source of funds 9 Source symbol 36 Storing global data 21, 22 Strategic liquidity 7 System integration 17 System table 19

Partial reassignment 24 Plan/actual analysis 14, 20 comparison 17, 71, 72 deviation 69 Planability 20 Planned data 14 Planning 76, 79 area 54, 55, 56, 61, 74 data 41, 44, 60 depth 20 function 54, 55, 61, 76 functionality 17 interval 53 layout 48, 53, 54, 59, 60, 73, 74 level 55, 56, 57 package 55, 58, 61 process 14, 15, 79 profile 74 screen 61 unit 53 value 74 workbench 55 Plan version 74, 75 Plug-in 17, 81 Posting data 25 Posting transaction 31 Profit 6

Key figure 57

Layout Builder 54 Lead column 73 structure 74 Line item 28 Line items table 27, 29, 36 Liquidity analysis 25 forecast 10 item 15, 19, 20, 25, 30, 31, 32, 35 planning 3, 5, 6, 14, 39, 63, 71, 77 relationship 7

Test run 28 Tools 26 Totals list 37 Totals table 27, 31, 36, 71 Total cash flow 7 Transactional InfoCube 44 Transaction Events 18 Transfer posting 36 Transfer rule 65 Transfer structure 51, 65 Treasury 71, 72, 73, 74, 76, 77

Manual transfer posting 19 Master data 19, 45, 46, 47, 49, 75 Modeling 40 Multi-planning area 54 MultiCube 41, 45 MultiProviders 43 mySAP ERP 71

Query 32, 40, 67, 68, 69 sequence 23, 30, 37

Update rule 50


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