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Anand Raichura
July 7, 2022 | 11 minute read

SAP S/4HANA Cash and Liquidity

Management – Important aspects
 5  13  6,735

Introduction
I always like to explore available content before initiating any write-up and ask these
questions what type of audience/reader I am addressing? and what benefit they can
achieve? After reading through the available content, I am convinced that this new
write-up should be helpful for people looking for below content: –

What are main functionalities of SAP cash management?

What are important configuration steps?
What should be considered while testing SAP cash management?
What are cutover tasks for deployment of SAP cash management?

Kindly note content in this blog is relevant for SAP S/4HANA Finance for cash
management (Full Scope) for version 2020.

Main functionalities of SAP Cash

Management
 SAP Cash management in S/4H has undergone multiple change in terms of its scope
and availability, kindly go through details in SAP Note #2270400 (S4TWL – Cash
Follow Management – General). Cash management in SAP S/4H has been bifurcated as
‘The basic cash management’ and ‘SAP S/4HANA Finance for cash management or
Full Scope’. Let us name them as ‘Basic scope’ and ‘Full Scope’ for simplicity in this
 Like blog.

Below table will help you to understand the as main functionalities as well difference
 RSS Feed between ‘Basic scope’ and ‘Full Scope’ of cash management in brief: –

Main Differences Basic Scope Full Scope

Business Business function need not Business function needs to

function: be activated be activated. Kindly note,
FIN_FSCM_CLM this business function
require license for SAP
S/4HANA Finance for cash
management.

Manage banks Basic Scope is included with

Define (and manage)
and house banks addition to below:
bank accounts and
house bank accounts
for enabling payment
process.
Display bank accounts
in a list view
Import and export bank
accounts
Replicate house banks,
house bank accounts,
and bank accounts by
using IDoc
(Intermediate
Document)
Define payment
approvers and overdraft
limits for bank accounts
Display bank accounts in
the bank hierarchy view,
the list view, and user-
defined views based on
bank account groups
Implement workflow or
dual control processes
for opening, modifying,
closing, reopening, and
reviewing bank accounts
Import and monitor bank
fee data
Initiate bank account
reviews and monitor the
review status
Keep track of foreign
bank accounts
 Main Differences Basic Scope Full Scope

Follow
Monitor cash Cash position help to perform short to medium term
positions and forecast and Liquidity forecast helps with medium to long
 Like liquidity forecasts term forecast. I have detailed this functionality as a subtopic
within this blog.

 RSS Feed Manage memo Manage memo records using the app or transactions FF63
records and FF65

Cash Not available

Create cash pools based
concentration
on bank account groups
and perform cash
concentration
Perform cash operation
tasks such as monitoring
cash positions, making
bank transfers, and
approving payments

Liquidity item Not available

Liquidity item helps to
and snapshot
trace origin of the cash
function
flow
Forecast the liquidity
trend and analyze the
actual cash flows using
various dimensions
Develop and analyze
liquidity plans to ensure
payment obligations and
assist funding decisions
Use predefined local BI
Content to extract cash
management data for
analytical purposes
Enable the snapshot
functionality to filter cash
flows by the snapshot
time
 Main Differences Basic Scope Full Scope

Follow
Integration Integration with details in
Memo Records
Basic Scope column and
Financial Operations below:
 Like
Treasury and Risk
Management (FIN- Bank Communication
 RSS Feed FSCM-TRM) Management (FIN-
Consumer and FSCM-BNK)
Mortgage Loans (FS- Flexible Real Estate
CLM) Management (RE-FX)
Contract Accounts Initial Balance via Excel
Receivable and Payable Classic Cash
(FI-CA) Management
Sales and Distribution Manual Entry of Bank
(SD) Cash Balances
Materials Management SAP Liquidity Planner
(MM)
Inbound SOAP
Webservice for Cash
Flows

For further details on difference between Basic and Full scope, kindly visit refer
content at SAP help portal Business Function: Cash and Liquidity Management.

In below sub-section, I have tried to elaborate functionality of cash position, liquidity

forecast and liquidity item.

Monitor cash positions and liquidity forecasts

Businesses or in particularly treasury department will always in need to know current

cash position and future liquidity needs, to take timely investment decision. Hence, it
 is not surprising to confirm that monitoring of cash position and forecast are one of
the important reports for business.
Follow
Cash management relevant details are stored in One Exposure table (FQM_FLOW) as
a single source of truth with a certainty level. All cash management relevant
 Like information is stored for operational activities (e.g., purchase order creation, sales
order creation, finance postings, etc.). This table is then used by Fiori apps for
reporting in real time. Let us look at examples with a screen shot for better
 RSS Feed understanding.

Cash Position will provide details of current financial situation based on bank
balance in main bank account and bank clearing account. It also contains the
certainty level for the provided balance for example bank clearing account will be
marked as ‘SI_CIT – Self Initiated Cash in Transit’ and main bank account balance
will be shown as ‘Actual’. In addition, it contains liquidity item which we will further
discuss in subsequent section. Below is the screen shot for the same: –

Further drilldown will help to check on details behind the balance, please find below
screen shot for the same:

Liquidity Forecast helps in medium to long term forecast and details are based on
the applicable sub-ledgers and memo records. With liquidity forecast details,
business will be able to get details on the future receivable and payable which will
help in timely decision on surplus fund (by investing of liquid fund for better
return, negotiating with supplier to get early payment discount, etc.) or deficit
fund (by requesting customer for early payment, engaging early on bank for
overdraft to get better deal, etc.). I am sure business will have more usage then
specified here. Please find below screen shot as an example: –
 Follow

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Liquidity item
Liquidity item functionality is one of the pivotal functions with ‘Full Scope’ of cash
and liquidity management. As of drafting this blog, liquidity item is only supported in
the full scope of cash management capability. Liquidity item helps to track the origin
of the actual cash flow or project cash flow. For e.g., for vendor payment, liquidity
items help to trace back origin from invoice line items. One of the alternatives which
multiple clients uses in my experience was referring to offsetting account in vendor
line-item report, example drawbacks of this alternative are, it does not give accurate
information for invoice with multiple line item, it is time consuming, etc.

Cash flow analyzer report provide liquidity item and let you format report using
desired hierarchy which give user flexibility to have multiple views as required. Let us
look at the example from tracing of vendor invoice to payment and how it is reflected
in cash flow (projected as well as actual): –

1. Vendor Non-PO invoice posting

2. Projected cash flow

Kindly note standard configuration options are provided for derivation of liquidity
item. Below screen shot is referred as projected cash flow because invoice item is
 unpaid. If required, layout can be changed to add certainty level which showcase the
current status of the line item.
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 RSS Feed

3. Vendor outgoing payment

4. Projected cash flow

Even though invoice is paid but it still considered as projected cash flow till amount is
reflected in main bank account. You can see invoice break up at liquidity item is still
reflected after performing vendor outgoing payment.
 Follow

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 RSS Feed

5. Clearing with Bank statement or manual clearing

As part of bank reconciliation or statement posting, outgoing payment GL account is

cleared with main bank GL account.

6. Actual cash flow

After bank reconciliation is performed cash flow analyzer report show liquidity items
show with certainty level actual in ‘Actual Cash Flow’ report. You can still see the
breakdown of line as per liquidity item which is tracing back to the origin (in this
example from invoice).

Below are the details with accounting entries for better summarization: –
 Event Accounting Entry Liquidity item Projected/Actual
with amount (example) with Cash Flow
Follow
amount

 Like Invoice Dr. Expense: 23 – Rental expense: Projected

Posting 15,929.21 15,929.21

 RSS Feed Dr. Tax: 2,070.79 26 – Tax: 2,070.79

Cr. Vendor: 18,000

Payment Dr. Vendor: 18,000 23 – Rental expense: Projected (origin

15,929.21 invoice)
Cr. Bank outgoing:
18,000 26 – Tax: 2,070.79

Bank Dr. Bank outgoing: 23 – Rental expense: Actual (origin

Statement 18,000 15,929.21 invoice)

Cr. Main Bank: 26 – Tax: 2,070.79

18,000

Important configuration steps

SAP cash management is subcomponent of SAP Financial Supply Chain
Management (FSCM). Below are important configuration steps for cash position,
liquidity forecast and liquidity item. Kindly note configuration steps and values will
change based on individual requirement (and below is not an exhaustive list): –

# Configuration step and path Remarks (if

any)

1 General Setting for Cash Management

(SPRO > Financial Supply Chain Management > Cash

and Liquidity Management > General Settings > Define
Basic Settings)
 # Configuration step and path Remarks (if
any)
Follow

2 Create Planning Levels

 Like
(SPRO > Financial Supply Chain Management > Cash
and Liquidity Management > Cash Management >
 RSS Feed Planning Levels and Planning Groups > Define Planning
Levels)

3 Create Planning Groups

(SPRO > Financial Supply Chain Management > Cash

and Liquidity Management > Cash Management >
Planning Levels and Planning Groups >Define Planning
Groups)

4 Assign planning levels to special G/L transactions

(SPRO > Financial Supply Chain Management > Cash

and Liquidity Management > Cash Management >
Planning Levels and Planning Groups > Special G/L
Transaction Levels > Customer (or Vendor)..)

5 Create Liquidity Items

(SPRO > Financial Supply Chain Management > Cash

and Liquidity Management > Cash Management >
Liquidity Items > Edit Liquidity Items)

6 Define Queries for Liquidity Item Derivation The

configuration in
(SPRO > Financial Supply Chain Management > Cash this
and Liquidity Management > Cash Management > Customizing
Liquidity Items > Derivation Rules for Liquidity Items > activity cannot
Define Queries for Liquidity Item Derivation) be transported
to other clients.

7 Define Query Sequences

(SPRO > Financial Supply Chain Management > Cash

and Liquidity Management > Cash Management >
Liquidity Items > Derivation Rules for Liquidity Items >
Define Query Sequences)
 # Configuration step and path Remarks (if
any)
Follow

8 Assign Queries to Query Sequences The

 Like configuration in
(SPRO > Financial Supply Chain Management > Cash this
and Liquidity Management > Cash Management > Customizing
 RSS Feed Liquidity Items > Derivation Rules for Liquidity Items > activity cannot
Assign Queries to Query Sequences) be transported
to other clients.

9 Define Liquidity Item Derivation Settings for Company The derivation

Codes rules that you
define here only
(SPRO > Financial Supply Chain Management > Cash work for new
and Liquidity Management > Cash Management > postings. To
Liquidity Items > Derivation Rules for Liquidity Items > generate
Define Liquidity Item Derivation Settings for Company liquidity items
Codes) against existing
posting data,
you must run
the rebuild
program.

10 Define Default Liquidity Items for G/L Accounts The

configuration in
(SPRO > Financial Supply Chain Management > Cash this
and Liquidity Management > Cash Management > Customizing
Liquidity Items > Derivation Rules for Liquidity Items > activity cannot
Define Default Liquidity Items for G/L Accounts) be transported
to other clients.
If the query
sequence
configured
above fails to
determine a
liquidity item,
default liquidity
item defined in
this step is used
and recorded in
accounting
document line
item table.
 # Configuration step and path Remarks (if
any)
Follow

11 Regenerate Condition Strings

 Like
(SPRO > Financial Supply Chain Management > Cash
and Liquidity Management > Cash Management >
 RSS Feed Liquidity Items > Derivation Rules for Liquidity Items >
Regenerate Condition Strings)

12 Activate Individual Source Applications

(SPRO > Financial Supply Chain Management > Cash

and Liquidity Management > Cash Management >
Data Setup > Activate Individual Source Applications)

13 Generate and Assign Loading Class Helpful SAP

notes:
(SPRO > Financial Supply Chain Management > Cash
and Liquidity Management > Cash Management > 2369432 –
Data Setup > Customize the Flow Builder) Flow Builder:
Generate
and Assign
Loading
Class
2530138 –
FAQ: S/4
Hana Cash
Management
and data
setup
 # Configuration step and path Remarks (if
any)
Follow

14 Activation of Scope-Dependent Background Job Helpful blog:

 Like Definitions
Flow Builder:
(SPRO > SAP Netweaver > Application Server > Understand the
 RSS Feed System Administration> Activation of Scope- difference in
Dependent Background Job Definitions) trigger
mechanisms:
manually
created job,
event based job
and technical
job

Alternatively, refer SAP Best Practices Explorer (Link) for scope items Advanced
Cash Operations (J78) and Basic Cash Operations (‫‏‬BFB‫ )‏‬to get further details.

General testing scope

All projects are different and likewise its scope of testing. Based on the business
requirement solutions are designed and need to be tested accordingly. SAP cash
management is integrated with multiple business processes (considering the scope
activation, as well depend upon basic and full scope). In general testing should
involve below and tester should check impact of each transaction on cash
management reports/apps: –

Creation/update of Master data with planning level and planning group

New house bank master creation
Bank statement and reconciliation
Post Memo Records
Procure to Pay process
Order to Cash process
Other integrated business process example below
Treasury and Risk Management (FIN-FSCM-TRM)
Contract Accounts Receivable and Payable (FI-CA)
Flexible Real Estate Management (RE-FX)

Special consideration should be given to different type of payments for example

creation of supplier down payment using outgoing vendor payment of note item.
 This is important as incorrect configuration will stop the payment processing to
vendors.
Follow

Significant cutover tasks

 Like
Below are some of the significant cutover tasks for deployment of SAP cash
management, please note some tasks are relevant when cash management is
 RSS Feed activated in already live system: –

# Description

1 Import transport request

2 Define liquidity item queries

3 Assign queries to query sequences

4 Define default liquidity items for G/L accounts

5 Import liquidity item hierarchy

6 Assign planning levels in G/L accounts

7 Assign planning groups to business partners

8 Rebuild planning levels, groups, dates in accounting documents

9 Rebuild flow types in accounting documents

10 Load trans. data from source appl. into one exposure from operations hub

11 Build cash flows from operations

12 Check Fiori reports

Link to important information/source

Below are some useful links for further study: –
 Description Source Link

Follow Cash and Liquidity SAP Help https://help.sap.com/docs/SAP_S4HAN

Management A_ON-
PREMISE/ac319d8fa4ea4624b40a58d23
 Like e3c4627/e7d3a052c3ad224fe10000000
a445394.html

 RSS Feed

Business Function: SAP Help https://help.sap.com/docs/SAP_S4HAN

Cash and Liquidity A_ON-
Management PREMISE/ac319d8fa4ea4624b40a58d23
e3c4627/c7999f525c5b224fe10000000
a445394.html?version=2020.latest

Basic Cash SAP Blogs https://blogs.sap.com/2021/04/12/basi

Management (by Luisa c-cash-management-versus-full-scope-
versus full scope for Albarran- for-sap-s-4hana-finance-for-cash-
SAP S/4HANA Morocho) management/
Finance for cash
management

Flow Builder to SAP Blogs https://blogs.sap.com/2017/03/27/flow-

Integrate FI and MM (by builder-to-integrate-fi-and-mm-in-new-
in New Cash Lawrence cash-management-overview/
Management – Liang)
Overview

Flow Builder: SAP Blogs https://blogs.sap.com/2018/09/03/flow

Understand the (by -builder-understand-the-difference-in-
difference in trigger Hongjun trigger-mechanism-manually-created-
mechanisms: Qian) job-event-based-job-and-technical-job/
manually created
job, event based job
and technical job

Below are some useful SAP’s notes for reference: –

2270400 – S4TWL – Cash Management – General

2461437 – House bank (HBKID) and Account Id (HKTID) is not updated in table
FQM_FLOW (One Exposure)
 2530138 – FAQ: S/4 Hana Cash Management and data setup
2580031 – FAQ: Liquidity item assignment into one Exposure (FQM_FLOW) in S4
Follow Hana Cash management
2369432 – Flow Builder: Generate and Assign Loading Class

 Like
Conclusion
 RSS Feed Hope after reading this blog, you got information on main functionalities, difference
of basic and full scope, working of cash position, liquidity forecast and liquidity item,
general testing scope, important cutover tasks, and some links to other important
information/source.

Disclaimer/Closure
Contents in this blog are based on my view and experience, I have tried to justify the
content with help of reliable sources. All screen shots are from test systems and any
resemblance is purely coincidence. While writing this blog I am truly convinced with
T.S. Eliot observation:

“We shall not cease from exploration and the end of all our exploring will be to arrive
where we started and know the place for the first time.”

Alert Moderator

Assigned Tags

FIN Cash Management

SAP Financial Supply Chain Management

SAP S/4HANA
SAP S/4HANA Finance

#Cash Position
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#Liquidity Forecast

#Liquidity Item
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5 Comments

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 Helen Geraldine Salas galvez
September 12, 2022 at 4:58 pm
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Hi, do you have more information about CLM (cash liquid management), can you share with me please

Like 0| Like

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Anand Raichura | Blog Post Author

 RSS Feed
September 13, 2022 at 12:12 am

Hi Helen,

Kindly go through SAP Best Practices Explorer, SAP Help Link, SAP notes and other links suggest in
this blog. I am sure you will get ample information on CLM.

Regards,

Anand Raichura

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Helen Geraldine Salas galvez

September 13, 2022 at 2:51 pm

Thanks

Like 0 | Share

Hajaratsab Tahaseeladar
December 1, 2022 at 1:53 pm

Hi Anand,

Do we have T factors and for SAP S/4HANA for Cash Management ??

Like 0 | Share

Anand Raichura | Blog Post Author

December 1, 2022 at 2:33 pm

Hi Hajaratsab,
 Kindly elobrate your question.

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Regards,
 Like
Anand

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