Overview

In this blog, I’d like to provide an overview of the cash and liquidity management setup. Understanding the necessary configuration stages, the process architecture, and a sample key data structure (KDS) for your implementation will be made easier for you. It aids companies in making financial management decisions. By examining the Cash and Liquidity management reports, the Treasury Department can decide whether to manage its finances internally or by obtaining a working capital loan from a bank.

A) Initialization

Financial Supply Chain Management is divided into two subcomponents: Cash Management and Liquidity Management (FSCM). Liquidity management is used to verify the liquidity situation of the sub-ledgers, such as Accounts payable and Accounts receivable, while cash management is used to verify the cash position of all bank accounts. To confirm the Cash and Liquidity status, we can additionally employ Memo records, Payment requests, and Parked documents. The Treasury division and the Cash Management operations team both use it. In order to confirm the cash and liquidity position report, we employ the T-codes “FF7A /FF7B.” This document was created with SAP ECC 6.0. I would like to give a quick summary of the configuration followed in the document.

The S4HANA system has more functionality while keeping the fundamental idea the same.

Arrangement levels

We must establish planning tiers. Before conducting the configuration, it is crucial to comprehend key data structure (KDS). For defining a) Planning levels for cash position (Bank G/L accounts), I have used the KDS listed below. b) Liquidity position planning levels (sub-ledgers AP/AR) and c) Memo records planning levels.

Organizing Teams

The planning levels must be assigned to the planning groups. During reporting, it is used to group planning levels. The customer or vendor group’s traits, tendencies, or dangers are represented by the planning group. So, you can categorise incoming and outgoing payments based on the sum, the likelihood of a cash inflow or outflow, the nature of the business relationship, and other factors.

Planning Format

Planning types that are utilised manually. For the creation of Memo records, the planning type regulates the planning level, number ranges, archiving category, auto expiration, and field status (Memo records are valid for a certain period)

(B) Configuration 

1) Establish the Default Value Date

Define Default value date in SPRO-FSCM- Cash and Liquidity Management-Cash Management-Basic Settings

Activate proposal value date for your company code to default the current date as value date for cash-relevant transactions and Save it.

2) Explain source symbols:

Define source symbols in SPRO-FSCM-Cash and Liquidity Management-Cash Management-Basic Settings

Note: Although SAP has already provided source symbols, you are free to specify your own source symbols if you so choose. I’m solely using BNK & PSK in this document.

3) Allow planning level to be entered as an input for GL Master (OBD4)

You must activate it for your chart of accounts’ groups for cash and bank accounts. To make the planning level a required or optional field, double-click on the relevant account group in the chart of accounts.

4) Allow Sub-Ledger Master record (OBD3/OBD2) to accept input from Cash Management Group (Planning Group).

For Vendor/Customer Master Records, it is necessary. Making the cash management group an optional or mandatory field under the “company code” segment requires you to click on the appropriate vendor/customer account groups.

5) Specify the level of planning

Define planning level with SPRO-FSCM-Cash and Liquidity Management-Cash Management-Master Data-G/L Accounts

To create all the necessary planning levels for the Cash position, Liquidity position, and memo records, click on New Entries, then create them all, saving them after each.

6) Identify Planning Teams

Define planning groups using SPRO-FSCM-Cash and Liquidity Management-Cash Management-Master Data-Subledger Accounts

Here, we will define planning.

Groups and Planning level assigning (This step only applies to PSK (connected to sub-ledgers/Memo records))

To define or save new entries, simply click on them.

7) Keep Blocked Levels Up

Maintain Blocked levels with SPRO-FSCM-Cash and Liquidity Management-Cash Management-Structuring

Click on New entries, then enter your definitions and save them.

Note:

• As soon as the invoice is submitted for the customer/vendor, the system will update planning level Y1/Y2 if the invoice is denied for payment. The vendor/customer line items reports (FBL1N/FBL5N) allow you to confirm this.
• The system will update planning level K1/D1 (unconfirmed vendor/unconfirmed customer) in the FBl1N/FBL5N report if the invoice is not blocked, up until the user makes a change to a confirmed vendor/customer.
• The status of the item will change from Unconfirmed to Confirmed if the user manually removes the payment block. Once this has happened, the system will update the planning level in the invoice from K1/D1 to K2/D2, which you can confirm in the vendor/customer line item reports included in the FBl1N and FBL5N reports.
• From the planning groups that are designated in the business partner/vendor/customer master data, the system will produce planning levels.

8) In the payment request, provide levels.

Define levels in payment requests using SPRO-Cash FSCM’s and Liquidity Management, Cash Management, and Structuring

Click on New entries, then enter your definitions and save them. Mostly, bank-to-bank transfers are done via it. In the business-to-business procedure, we first create a payment request before we authorise it.

9) Establish ranges of numbers for manual planning

Define number ranges for manual planning using SPRO-Cash FSCM’s and Liquidity Management, Cash Management, Structure, and Manual Planning

Set up and store the number ranges for your company code. Planning categories will be allocated to it.

10) Describe the many kinds of planning

Define the different types of planning in SPRO-FSCM-Cash and Liquidity Management-Cash Management-Structuring

A generation of Memo Records with a set expiration date are controlled by the planning type, which also determines the planning Level, Number ranges, archiving category, Auto expiry, and field status.

Add planning types to plan levels and number ranges, then save the changes.

11) Describe the name of the cash management account

Define the Cash Management Account Name in SPRO-FSCM-Cash and Liquidity Management-Cash Management-Structuring

Name your bank accounts’ cash management accounts and save them.

12) Create groupings and keep headings up to date

SPRO-FSCM: Define Groupings, Maintain Headers, Cash and Liquidity Management, Structuring, and Cash Management

Various groups can be defined based on reporting requirements. You can set up separate groups for checking the liquidity position and the cash position, or You can construct a single group to verify both the cash and liquid position.

Select New Entries, specify the groupings below, and save your changes.

13) Keep things organised

SPRO-FSCM- Cash and Liquidity Management-Cash Management – Structuring – Groupings – Maintain Structure

For each grouping, there are two types. (Groups for bank accounts and planning) E-level and G-group. Make careful to specify a structure for each group and level of planning.

To create a structure for your cash position (ZTESTCASH) and liquidity situation (ZTESTAPAR), click on New entries, then specify it and save it.

14) Turn on your company’s code (OBY6) for cash and liquidity management (OT22)

The firm code level controls the activation of cash management. For every company code, you must activate it. If you don’t activate the system, no planning levels will be updated.

Conclusion

You should now have a better understanding of the configuration stages, business process scenarios, and sample critical data structure thanks to this blog. In order to show you the end-user steps, I’d like to create another blog. It will offer you a general concept of the cash & liquidity management reports and business process situations. In my following blog, I will update the end-user steps. I appreciate your time.