Cash Management with SAP S/4HANA

Dirk Neumann, Lawrence Liang

• Publisher: SAP PRESS
• Year: 2020
• Print ISBN: 9781493220144
• eBook ISBN: 9781493220151
• Edition: 2
• Topic: Computer Science
• Subtopic: Computer Science General
• Index: Computer Science

Managing your cash is critical—so master cash management in SAP S/4HANA! Follow step-by-step instructions to run bank relationship management, cash positioning and operations, and liquidity management, and then tailor each process to your system. Walk through the One Exposure from Operations data model, including integration scenarios, transactions, and configuration. Discover extensibility options for bank relationship management and key SAP Fiori apps. Get equipped for cash management! In this book, you'll learn about: a. Bank Relationship Management
Manage your accounts in SAP S/4HANA. Maintain your banks, house banks, and bank account master data with key SAP Fiori apps. Use new features such as the Monitor Bank Fees App and the treasury executive dashboard. Configure settings to suit your requirements. b. Cash Positioning and Operations
Analyze your cash position, transfer and concentrate cash, and integrate bank statements for cash flow reconciliation. Get insight into new features and SAP Fiori apps for bank statements, reporting, configuration, and more. c. Liquidity Management
Forecast liquidity and analyze actual cash flow with SAP S/4HANA; then develop liquidity plans with SAP Analytics Cloud. Tailor your settings for each process based on your needs. Highlights include:
1) Master data
2) Configuration
3) Bank relationship management
4) Cash positioning
5) Cash operations
6) Liquidity management
7) One Exposure from Operations hub
8) Extensibility
9) Migration

1 Introduction to Cash Management

When you hear the common saying “cash is king,” you probably think about the importance of cash in your daily life. Cash is the lifeblood of business. Keeping cash flowing at the right pressure is a vital health concern, and cash managers are the personal fitness advisors for businesses.

This chapter emphasizes the importance of cash management and the need for real-time control (Section 1.1), explains how cash management has historically been handled by separate modules and nonreal-time solutions, outlines related limitations, and finally introduces the new solution (Section 1.2). We’ll provide a general overview of SAP S/4HANA Finance for cash management, starting with an explanation of what SAP S/4HANA is and what it means for you as a customer and user (Section 1.2.1). Then, we’ll briefly explain the different versions and editions of SAP S/4HANA, and consequently of cash management in SAP S/4HANA, that are available (Section 1.2.2). This information is relevant because we’ll refer to these versions and editions, throughout the book and explain the specific functionalities you’ll get with each.

In the following sections, we’ll give you an overview of the functional areas in cash management in SAP S/4HANA, starting with bank relationship management (BRM) in Section 1.3.2. We’ll then move on to introduce you to daily cash operations (Section 1.3.3) and liquidity management (Section 1.3.4). In Section 1.3.5, we’ll introduce One Exposure from Operations, which is the central repository for exposures in SAP S/4HANA, where all cash-relevant financial transactions or flows are stored.

Finally, we’ll end this chapter with a general overview of SAP Fiori apps and the SAP Fiori launchpad (Section 1.4). This information will be generally useful throughout the book.

1.1 Cash Management as a Business Imperative

Many definitions and explanations are used to describe what cash management really is; however, all somehow revolve around the fact that a cash manager is responsible for optimizing cash flows and investing excess cash. Some call cash management an art, and others call it a science, but all agree this is an increasingly complex task. As a cash manager, you must ensure your company has the sufficient short-term resources available to sustain its ongoing activities, and if you see a need to intervene, you can mobilize funds to cover cash deficits or invest excess. Your objective is to optimize liquidity.

The role of cash management has changed drastically over the past 60 years and has shifted away from being a simple controller of bank account balances and cash flows to bearing broader responsibilities for managing short-term interest and foreign currency risks. Today’s cash management is one of the fundamental parts of how a company manages working capital. You’ll execute tasks related to working capital alongside your regular duties, such as the daily management of account balances and the conclusion of transactions in financial markets.

From the corporate perspective, managing corporate cash effectively is an integral part of your company’s success. A cash manager works directly with the treasurer and closely with the chief financial officer (CFO) to make sure the overall objectives of the company are supported by adequate and cost-effective liquidity.

To achieve this goal, a cash manager is often responsible for a variety of tasks and activities that range from collections and disbursements to risk management and strategic advising.

In some organizations, the following tasks may be handled by different team members but must be coordinated by a cash manager:

• Collection of inflows
  Accelerating the collection processes and making them as efficient as possible, ideally by concentrating cash flows in a few accounts by allowing certain accounts to collect on behalf of your subsidiaries.
• Disbursements
  Controlling the timing of cash outflows to maintain constant and accurate control (insight) into the disbursement flows for the entire group.
• Management of daily cash flows
  Controlling bank account balances across all banks, monitoring incoming and outgoing cash flows, and initiating funds transfers and payments.
• Liquidity forecasting
  Gaining insight into the short- and medium-term liquidity of your company by collecting timely and accurate information from your subsidiaries across the globe to gain an insight into your expected liquidity.
• Short-term funding
  Securing adequate short-term financing and credit lines in the relevant currencies.
• Short-term investments
  Making optimal use of your temporary cash surpluses.
• Infrastructure
  Implementing a cash management infrastructure for the company that allows you and your team to get your job done and that enables you to accuratel...

Table of contents

• Dear Reader
• Notes on Usage
• Table of Contents
•   Preface
•   Foreword by Russ Holland
• 1   Introduction to Cash Management
• 2   Bank Relationship Management
• 3   Cash Positioning and Cash Operations
• 4   Liquidity Management
• 5   One Exposure from Operations
• 6   Extending Cash Management
• 7   Migrating Your Cash Data
• A   Cash Management in Previous SAP S/4HANA Versions
• B   Choosing a Deployment Model
• C   Additional Resources
• D   The Authors
• Index
• Service Pages
• Legal Notes