Cash Cockpit

in SAP

Compiled by

espresso

tutorials

Table of Contents

The Cash Management Situation ................. 2

Disposition Reporting .................................. 11

Forecast of the Subsidiary Companies ....... 15

Interactive Disposition ................................. 21

Monitoring the Financial Status .................. 30

Processing Bank Account Statements ........ 34

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The Cash

Management

Situation

A company that runs out of liquidity becomes

insolvent. This can also happen through the

lack of transparency if, e.g. the company is

doing well from an operational perspective,

however, the expenditures can no longer be

covered by the currently available financial

means. This example already highlights the

importance of a well-functioning cash

management system in a company.

The objective in day-to-day cash management is to organise the

continuously reoccurring cycles from cash investments or

borrowing in a sensible, and thus, profitable or respectively cost-

effective manner.

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Observance of the cut-off times for the payment authorisations to

the banks is critical for the validation to be carried out the same

day successfully. As these cut-off times at the banks are partly –

depending on the currency – in the morning, the related cash

management decisions, depending on which currency is being

managed, must be received by the bank in good time via

payment authorisation.

The decisions on whether an interest yield was achieved by

investing money or whether money is being borrowed must be

made by this point to secure the operational business of the

company. The following image 1 shows the individual stages of

the control cycle of the disposition cycle. The disposition process

starts by importing the electronic bank account statements. This

process will be specified in detail later on. In our illustration, we

would like to start with the central disposition reporting of the

cash cockpit:

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First of all, lets start with a quick overview of the five most

important stages in the day-to-day routine.

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Disposition Reporting

First of all, the Cash Manager requires a quick overview of the

current liquidity situation. In a typical SAP Standard System,

there is a daily cash position and liquidity preview for this. A

structured overview is required for the daily disposition. This

overview will display the current disposition day with its in- and

outflows at a glance and as compact as possible. The process

starts with the current account balances of the current accounts

(after importing the electronic bank account statements). Next,

the scheduled date of the daily disposition is edited in a

structured manner. This includes information from various

sources such as financial accounting, the plan cash flows of

subsidiary companies from the purchase, sales or financial

transactions from the treasury (real time integration from the SAP

Treasury). It must be possible to make decisions based on this

information. In practice, many clients prefer to use the more

flexible EXCEL display tool.

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Forecast of the Subsidiary Companies

A high-quality database is the basis for a well-founded and

informed investment decision. This also means, e.g. that the

liquidity flows of subsidiary companies that participate in the

cash-pooling, are included. If all companies use the same SAP

System and SAP Client this data integration will already have

been carried out. It becomes more time-consuming and costly if

subsidiary companies use their own, different IT systems.

However, the cash forecast of these companies must be included

to be able to get an overall picture of the group’s liquidity.

However, the outdated SAP Standard Transaction used to enter

remittance advice is only partly suitable as it has many input

boxes.

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Disposition

Once all cash-relevant data has been compiled, the Cash

Manager can start making decisions on which financial

transactions would make sense based on the current cash

situation. In larger organisations, the daily disposition is set-up in

the front office of the Treasury Department. Technically, both

borrowing as well as investments belong to the area of

disposition; cash requirements are in general covered through

the availment of the credit limit (drawing via treasury deals on the

financial market). Foreign currency requirements are met through

currency transactions. In this process, functions are carried out in

the SAP Standard at various positions of the treasury module.

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Monitoring the Financial Status

An integral part of monitoring the financial status is to prevent

risks. Having an overview of the current overall external financial

liabilities of a corporate group is a significant decision support in

all disposition and liquidity planning processes. Generally, an

analysis of financial instruments and current accounts is carried

out. Furthermore, external accounts that are e.g. outside the

cash pool organisation, are also included in the processes and

monitored.

Checking the Processing of Bank Account Statements

Before the next steps in the cash management process can be

carried out, the SAP data and thus the information basis are to

be updated. Electronic bank account statements are imported

and

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if possible processed automatically. In the framework of the daily

disposition and the preceding reconciliation process, the cash

flows announced the day before (remittance advice, financial

transactions, cash pool transfers, etc.) must be assigned to the

actual data (cash receipt or respectively cash disbursement).

This process is also very important to be able to make a decision

based on the correct data and to clarify discrepancies in time.

Cash Cockpit in SAP

The Cash Cockpit was created in close cooperation with the

specialist department at an SAP Client based on these five

process steps. The starting point for this was the SAP Standard

which was already outdated in many areas and no longer

provided the ideal support for day-to-day business. The objective

is to make all relevant data available from one central location

(Cockpit) and

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to be able to directly carry out interactions (financial transactions)

or transactions.

Demo 1: Overview of the Cash Cockpit

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Disposition Reporting

In the Cash Cockpit, the disposition reporting

serves as a database for daily planning. This

view summarises all cash-relevant processed

in SAP ERP in a reasonable manner.

Contrary to individual, independent assessments such as the

cash management position, the Cockpit combines a central

access point for the front, middle and back office. The liquidity of

Friday 27.05 and Monday 30.05 are displayed at a glance, see

image 2. A drilldown makes the analysis of all individual values of

the respective figures right down to the last level, the individual

receipt, remittance advice or financial transaction possible. In

addition to multi-level cash pool, the forecasts of the subsidiary

companies as well as the future incoming funds / expenditures

based on sales or purchases can be displayed. P a g e | 11

The image was developed together with the Cash Management

Department and based on the SAP Standard-Customising (by

means of disposition groups), it can be adapted to the

requirements of the respective company and to the treasury

strategies.

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Contrary to a report that purely serves to provide you with data,

in the Cash Cockpit you can check the available database, in

which you can e.g. look at the status of the cash forecast reports

of the subsidiary companies in detail. If only a few companies

within the corporate group have reported the daily forecast, the

database should respectively only be used with restrictions to

make decisions regarding borrowing or respectively financial

investments.

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Forecast of the

Subsidiary

Companies

Cash-relevant data of the subsidiary

companies are indispensible for a central

cash management.

If subsidiary companies are included in an SAP System as an

operational company code, a uniform database will already be

available. If subsidiaries are managed outside of SAP, only

replacement technical company codes are required. The

“missing” operational data must be delivered correspondingly.

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Maintain Forecast Profiles

Equipped with a SAP GUI, the subsidiary companies are given

central access to the Cash Cockpit. The SAP companies also log

on to the central ERP. This process should be made as easy as

possible. In the example in image 3, you can see a simple

transaction which is used to maintain the forecast values.

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Image 3: Maintain the Forecast Profile

Here, a cash requirement of EUR 10,000 on the account at

Deutsche Bank is anticipated for the next working day after the

disposition day (30.05). The abbreviation t (thousand) or m

(millions) is a standard form in the treasury. In the Standard of

the SAP Cash Management, this form is unfortunately completely

unknown.

This makes it possible for the Cash Cockpit to enter the data

error-free and in a quick manner. This ensures that the right

amount of zeros is entered.

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Technically, a SAP Standard Remittance Advice is generated with

this transaction. Contrary to the SAP Standard Screen for the

compilation of a remittance advice, the new input option is

reduced to only a few absolutely required boxes. This reduces the

complexity for the subsidiary company and increases the

acceptance of the users to enter the data into a SAP system.

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Release Forecast Profiles

Four eyes are better than two. True to this motto, a release

process for the forecast data is possible. This is managed via

two new reporting objects. Only once the forecast has been

entered and released will the green light in the Cash Cockpit

appear, as shown in image 4.

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Image 4: Cash Forecast Status Overview

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Interactive Disposition

The interactive disposition can build on a

solid database planning for the current

disposition day. Through this a shortcut to the

SAP Treasury and the SAP Monetary

Transactions is created. The scheduled

closing balances after the disposition in the

Cash Cockpit, are a central, standard starting

point.

From this view, there are various function options through which

the SAP Treasury can be accessed, e.g., to make a financial

investment. In the “limit” column to the left, image 5 shows the

currently available financial scope of the individual banks. The

other columns indicate the loans due today, new drawings and

the new total loan balance.

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Image 5: Interactive Disposition

Without having to exit the Cash Cockpit, you can quickly and

efficiently run through a complete process in three simple steps.

Demo 3 shows how a credit limit is extended through drawing.

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Step 1 – New drawing

Once you have selected a row (that corresponds to a bank), a

drawing transaction can be carried out via the icon “new drawing”.

Again, a SAP Standard Transaction in the treasury is created in

the background without having to run through the complex input

screen in the SAP Standard. Image 6 shows an example of such

a simplified input.

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r& Anlegen/Ändern einer Ziehung zur

Kredittnie

Image 6: Drawing a Credit Limit

Planned drawings can first be simulated by clicking on “Note”.

I.e. the impact of a note on the disposition is immediately visible

in the Disposition Reporting of the Cash Cockpit.

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The easy forwards navigation with the “FI post” icon, see image

5, will immediately navigate you to the second step in which the

posting run is carried out.

Step 2 – Carry out posting run

The drawing of the credit limit is immediately invested as a

treasury deal. The drawing can now be transferred to FI and

result in one or multiple postings in the general ledger. The

posting log in image 7 shows detailed data. A SAP Standard Log

gives information on the whole process. Now, the foundation has

been laid to carry out the payment authorisations to the banks

directly.

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Again, the third step can be access via forwards navigation by clicking on the “Pay” icon.

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Image 7: Posting Log

Step 3 – Monetary Transactions and Payment

Request

The SAP Transaction F111 MONETARY TRANSACTION FOR

PAYMENT REQUESTS is automatically accessed via a shortcut

from the Cash Cockpit, directly provided with the required

selection parameters and, if desired, carried out immediately

(see image 8). Provided that an automated bank communication

has been set up in the background, this could be considered

“straight-through-processing”. Here, a payment run is very

efficiently initiated and a payment request is created.

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□ Parameter wurden erfasst

9 Zahlungsvorschlag wurde erstellt

□ Zahlungslauf wurde ausgeführt

Buchungsauftrage: 2 erzeugt, 2

eriedigt

Image 8: Monetary Transactions

If direct connections to your banks have been carried out via

SWIFT or EBICs, once the produced data carrier has been

released, data can be directly sent to your main bank. The SAP

Bank Communication Management can support you in this

process. P a g e | 28

Status

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Monitoring the Financial Status

Monitoring of the financial status takes place

in the context of the market risk analyser,

external accounts outside the cash pool

organisation and financial instruments.

With the aim of supporting the process, a compact overview of

the current external financial liabilities is provided. The origin of

the financial liabilities is displayed on an interface according to

grouping criteria that are to be defined. As an example in

image 9, the current accounts of the whole corporate group are

grouped according to countries with the current daily balance.

Furthermore, the financial instruments are grouped according

to financing instruments, foreign currency and derivatives.

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Image 9: External account, summarised according to

countries

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Image 10: Drill down external bank accounts

To obtain detailed information, individual bank accounts can be accessed via this overview. This also applies for the financial instruments of the treasury: the individual deals with their cash flows and current market values can be access (see image 10 for external bank accounts and image 11 for financing instruments).

Image 11: Drill down financing instruments

The compacted display of the complete financial status can also

be viewed in the disposition reporting (first tab of the Cash

Cockpit).

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Processing Bank Account Statements

The information cycle in the cash

management starts every morning by

retrieving and processing the electronic bank

account statements

Every morning between 7 and 8 o’clock, the banks make new

bank account statements available to the companies for retrieval.

Technically, this happens via a scheduled background job at your

end. Alternatively, the Cash Manager can carry out the process

step manually (pull process). If you have a connection to the

SWIFT network, you can reverse this method by your bank

sending you the files directly after the files were compiled (push

process).

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Importing Bank Account Statements

To date, in the SAP Standard only the Bank Communication

Management is able to track whether a bank account statement

has been imported or respectively processed. With the Elko-

Cockpit you have another alternative. As seen in image 12, the

Elko-Cockpit also offers a good overview of which bank account

statement of the corresponding bank accounts were imported

and processed.

Image 12: Overview of the imported bank account statements

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Demo 4: Monitoring Bank Account Stataments

Monitoring Matching

Remittance advices and treasury transactions created the day before are now

reflected in the actual data. The plan records compiled the day before should be

removed via matching (ACTUAL/PLAN), see image 13. The Cash Cockpit also

offers an easy and efficient solution for this.

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Demo 5: Matching retrieval

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Further Information

Consultants

bdf Consultants GmbH

Zollhof 6

40221 Duesseldorf

Deutschland /

Germany

Contact Details:

Dr. Ralf Huber

+49 171 / 3363 449

r.huber@bdf-consultants.de

Thomas Dohmen

+49 172 / 2566 907

t.dohmen@bdf-

consultants.de

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