SAP Cash Management Configuration

SAP R/3 ENTERPRISE ECC6

Published by Team of SAP Consultants at SAPTOPJOBS

Visit us at www.sap-topjobs.com

Copyright 2009-11@SAPTOPJOBS

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means electronic or mechanical including photocopying, recording or any information storage and retrieval system without permission in writing from SAPTOPJOBS.

Table of Contents

1 Cash Management (TR-CM)............................................................................... 3

1.1 Activation of Cash management in Co Code........................................ 5 2 Basic Settings......................................................................................................... 7

2.1 Define Value Date Default.......................................................................... 7 2.2 Define Source Symbols ............................................................................... 8 2.3 Master Data .................................................................................................... 9 2.4 Define Planning Level ................................................................................ 10 2.5 Define Planning Group.............................................................................. 12

3 Structuring............................................................................................................ 14 3.1 Define Cash Management Account Name........................................... 15 3.2 Groupings ...................................................................................................... 16 3.3 Define Groupings and Maintain Headers ........................................... 17 3.4 Maintain Structure ..................................................................................... 18 3.5 Define Distribution Function .................................................................. 20

4 Liquidity Forecast: Payment Date Determination/Assignments......... 22 4.1 Maintain Archive Retention Period........................................................ 24 4.2 Manual Planning ......................................................................................... 25

4.2.1 Define Number Ranges...................................................................... 25 4.2.2 Define Planning Types ....................................................................... 27 4.2.3 Define planning levels for Logistics............................................... 29

4.3 Maintain Blocked Levels ........................................................................... 31 4.4 Special G/L Transaction Levels ............................................................. 33 4.5 Define Down Payment Request ( Customer / Vendors) ................. 34 4.6 Define Bills Of Exchange ( Customer / Vendors) ............................. 36 4.7 Define Others ( Customer / Vendors) ................................................. 38 4.8 Define levels in payment requests......................................................... 40

5 Bank Accounting ................................................................................................. 42 6 Cash Concentration ........................................................................................... 43

6.1 Steps for Configuration ............................................................................. 43 6.2 Define Intermediate Account, Clearing Accounts, and Amounts 45 6.3 Specify forms ................................................................................................ 48 6.4 Define Payment Methods for Payment Requests .............................. 49

7 Prepare Production Startup and Data Setup............................................. 50 8 Reorganize Cash Management ....................................................................... 53

1 Cash Management (TR-CM) Cash Management is used to monitor payment flows and safeguard liquidity, so that you can meet your payment commitments

Integration

Cash Management is a subcomponent of Treasury. This means it is closely linked with Treasury Management (TR-TM) and Market Risk Management (MRM). Cash Management offers the functions described above for liquidity analysis purposes while MRM offers methods and processes for assessing risks positions. Treasury Management contains the actual financial translations and the portfolio analysis functions.

Cash Management is integrated with many other SAP application components. For example, the liquidity forecast integrates cash in- and outflows from financial accounting, purchasing, and procurement, with long-term liquidity analysis.

Let us go through the Configuration settings for Cash Management

1.1 Activation of Cash management in Co Code

First step in customizing is activation of cash management in our Co code under Global parameters in IMG path

Menu Path : IMG-> Financial Accounting -> Financial Accounting (New) -> Global Parameters for Company Code -> Enter Global Parameters Transaction Code: SPRO

It is activated here

2 Basic Settings

2.1 Define Value Date Default

Here you specify whether the current date is the default value for the value date when line items are entered. You make this specification for the company codes in which you implement Cash Management.

Menu Path: Financial Supply Chain Management-> Cash Management->Basic Settings->Define Value Date Default Transaction Code: SPRO On screen against the respective Company code Check box for ‘Propose Value date‘ column As ashown in Screenbelow:

2.2 Define Source Symbols

In this step you define source symbols and allocate them either to the liquidity forecast or to the cash position.

The source symbol divides the planning levels according to the sources that supply them with data, for example:

• Bank accounting

• Subledger accounting

• Materials management

• Sales and distribution

Normally source symbols provided by the system can be used.

Menu Path: Financial Supply Chain Management-> Cash Management->Basic Settings->Define Source Symbols Transaction Code: SPRO System settings need not be changed.

2.3 Master Data

Before you can use Cash Management, you must prepare the relevant G/L accounts and Sub ledger (Vendor and Customer) accounts accordingly.

Various steps involved are:

• The necessary Cash / Bank accounts must be created in your chart of accounts and in the company codes using Cash Management.

• Ensure that a separate account group for your cash / bank accounts, which is configured so that the key field Planning Level under “Bank/financial details” is a required field. This ensures that cash flows from all cash accounts are included in Cash Management.

• Ensure that an appropriate field status group has already been created for Cash / Bank accounts, where the ‘Value date’ field under “Payment Transactions” is a required field.

2.4 Define Planning Level

Financial transactions can be broken down into levels that explain the beginning and ending account balances. In the standard system, a planning type is allocated to only one planning level. You can, however, allocate a planning level to several planning types.

To make analysis of the cash position and liquidity forecast easier, the following conventions are laid down in the standard delivery system.

Levels beginning with "F" or "B" are reserved for automatic updating during posting; you enter them in the master record. "F" levels are allocated to bank accounts, customers, and vendors. "B" levels are allocated to bank clearing accounts. Thus, when displaying the cash position, you can see because of the level whether the items are postings in bank accounts or bank clearing accounts, or whether they are payment advices or planned items that are manually entered.

SAP recommends using the following levels: • Level F0 for bank accounts • Level F1 for customers and vendors • Levels B1 to Bn for bank clearing accounts • Level CP, for example, for confirmed payment advice

notes • Level UP, for example, for unconfirmed payment advice

notes • Level NI, for example, for noted items

We can define our own Planning levels if required.

Menu Path: Financial Supply Chain Management-> Cash Management-> Master Data -> G/L Accounts - > Define Planning Levels Transaction Code: SPRO

We are not defining anything here, but will use levels provided by the system

2.5 Define Planning Group

In the master record, you can allocate customers and vendors to a particular planning group for the liquidity forecast. The planning group represents a particular set of Customers or Vendors having similar characteristics, behaviors and risks.

This enables you to categorize incoming and outgoing payments on the basis of the size of the amount, the type of business relation, or the probability of the cash inflow or outflow.

In addition, you allocate your planning groups to a planning level.

Examples of typical planning Groups can be as under:

Planning group Description I1 Direct debit, customers I2 Other domestic customers I3 Foreign customers I4 Customers from affiliated companies O1 Domestic vendors O2 Foreign vendors O3 Vendors from affiliated companies

To differentiate the customer groups from the vendor groups, you should use a naming convention. In the above example, all customer groups begin with "I" for incoming payment, and all vendor groups begin with "O" for outgoing payment.

You define your own planning groups if necessary.

Menu Path: Financial Supply Chain Management-> Cash Management -> Master Data -> Sub-ledger Accounts - > Define Planning Groups

Transaction Code: SPRO

3 Structuring

In the following steps you will make settings that you can use to control the display for and the liquidity forecast according to your requirements.

In addition, you will make preparations for manually entering planning memo records.

3.1 Define Cash Management Account Name

In Cash Management, you can replace the G/L account number with a mnemonic account name. This mnemonic name is used with all functions and reports in Cash Management instead of the account number.

The name is unique within a company code.

Menu Path: Financial Supply Chain Management-> Cash Management-> Structuring -> Define Cash Management Account Name Transaction Code: SPRO

3.2 Groupings

In the next steps you will make settings that affect the: • Display for the cash position and liquidity forecast • Cash concentration

3.3 Define Groupings and Maintain Headers

In this step you define the groupings, and stipulate the main headings and the line headings that the system displays in the cash management position or liquidity forecast. Financial Supply Chain Management -> Cash Management -> Structuring-> Groupings``-> Define Groupings and Maintain Headers Transaction: SPRO

3.4 Maintain Structure

In this step, you specify grouping structures. These stuctures enable you to group together bank and subledger accounts in the or the liquidity forecast.

• For the cash position and the liquidity forecast, you specify:

• The accounts you want to see in the grouping and those you want to exclude

• The summarization term under which you want to group together the lines for levels and the lines for groups in the display

• The line type, whereby “E” stands for level and “G” for the account or planning group.

• For cash concentration, you specify • The account in which clearing account balances are

summarized during cash concentration. Recommendation

If you want the display to be as detailed as possible, SAP

recommends selecting all levels for each grouping. To do this, mask your entry with ++. Make sure you always enter account numbers with leading zeros.

Example 1: Grouping for bank account activity Grouping Type Selection Summ. term. Summ. acct BANKS E ++ ** BANKS G 00001131++ CITI BANKS G 0000113109 X Example 2: Grouping for subledger account activity Grouping Type Selection Summ. term SUBLEDG E ++ ** SUBLEDG G 0000113109 Clearing SUBLEDG G 0000113209 Clearing

SUBLEDG G E+ Expenses SUBLEDG G R+ Revenues

Financial Supply Chain Management -> Cash Management -> Structuring-> Groupings-> Maintain Structure Transaction: SPRO

3.5 Define Distribution Function

In this step, you can specify, in percentages, how much of an amount planned within a certain period is to be listed in the display for the cash position or liquidity forecast. Thus, you include the uncertainty which cannot be excluded for some items because of the expected date of payment. Example:

In the cash position, you want to include and display an unconfirmed payment advice according to this distribution:

• 50% on the expected day • 30% one day later • 20% one day earlier

Financial Supply Chain Management -> Cash Management -> Structuring-> Define Distribution Function Transaction: SPRO

4 Liquidity Forecast: Payment Date Determination/Assignments

In the liquidity forecast you can assign the planning amounts to the expected payment dates for planning groups and levels. The payment dates can be determined regularly or explicitly set when starting the liquidity forecast. In the liquidity forecast you can no longer display the amounts on the planning date but are displayed on the corresponding payment date. Financial Supply Chain Management -> Cash Management -> Structuring-> Liquidity Forecast: Payment Date Determination/Assignments Transaction: SPRO

4.1 Maintain Archive Retention Period In this step you specify for each archiving category how many months an archived memo record is to remain in the system before it can be deleted in a reorganization run. You can create your own archiving categories. Financial Supply Chain Management -> Cash Management -> Structuring-> Maintain Archive Retention Period Transaction: SPRO

4.2 Manual Planning Cash Management, reports like Cash Position or Liquidity forecast allows you to create your own record for future cash inflows or outflows which are known as Memo records. These Memo records are not backed by financial transactions and do not affect actual account balances but are helpful in displaying realistic Cash Flow position / forecast as they are entered for probable cash flows

In the following steps you will make preparations for manually entering planning memo records. For manual planning, you must

• create a separate number range, and • Create planning types.

4.2.1 Define Number Ranges

In the “Number ranges” step, you specify one or more

number ranges for manual planning. The system allocates a number from the appropriate interval to each memo record entered manually. Financial Supply Chain Management -> Cash Management -> Structuring-> Manual Planning-> Define Number Ranges Transaction: OT20

4.2.2 Define Planning Types

In this step you define the respective planning types for manual planning. Using the planning type, you control the manual entry of planned memo records. For each planning type, you specify

• the level to which the planning type is allocated • the archiving category in which a memo record is stored

after it becomes invalid

• whether memo records expire automatically

• the number range to which the planning type is allocated

• Which fields are displayed for the respective planning type, and whether an entry is required or optional in the fields.

In addition, you specify a mnemonic name that is also displayed when memo records are created. Financial Supply Chain Management -> Cash Management -> Structuring-> Manual Planning-> Define Planning Types Transaction: SPRO

4.2.3 Define planning levels for Logistics

In this step, you allocate the transactions from Materials

Management (MM) and Sales and Distribution (SD) to the planning levels you have defined for updating this data.

This allocation is necessary since the system cannot determine the planning level by using the master record fields, as it does to access data from Financial Accounting (FI).

In FI, the planning level for G/L accounts is specified in the master record. The specification for subledger accounts is made using the planning group with which the level for FI postings can be determined.

However, a business transaction in Logistics is represented by an internal ID:

• 1 = purchase requisition • 2 = purchase order • 3 = scheduling agreement • 101 = order

You must assign these transactions to a planning level so

that you can distinguish them in Cash Management.

Financial Supply Chain Management -> Cash Management -> Structuring-> Define planning levels for Logistics Transaction: SPRO

4.3 Maintain Blocked Levels

In this step, you can allocate blocked levels for the levels of the liquidity forecast. When you post with a payment blocking indicator, the system then takes the blocked level instead of the standard level of the corresponding planning group. Example:

For level F1, you specify that when you post with payment

blocking indicator A, level XA should be displayed instead.

When displaying the liquidity forecast, you can then see

because of the blocked level that the displayed amounts are postings with payment blocking indicators.

Financial Supply Chain Management -> Cash Management -> Structuring-> Maintain Blocked Levels Transaction: SPRO

4.4 Special G/L Transaction Levels In the following steps, you assign to special G/L transactions a planning level under which you want to see the cash flows in the liquidity forecast. Various Special G/L transactions can be selected like Down payment Requests, Bills of exchange, Security Deposits or others which can affect Cash flows

4.5 Define Down Payment Request ( Customer / Vendors) In this step you can freely choose the planning levels for the down payment requests you want to use for controlling in Cash Management. In doing this, you must, however, take note of specific naming conventions.

Use levels beginning with F, since these are FI postings. The special G/L indicator is useful for the second letter, for example, FF for down payment request.

Financial Supply Chain Management -> Cash Management -> Structuring-> Special G/L Transaction Levels-> Customer-> Define Down Payment Request Transaction: OBXR

Financial Supply Chain Management -> Cash Management -> Structuring-> Special G/L Transaction Levels-> Vendor-> Define Down Payment Request Transaction: OBYR

4.6 Define Bills Of Exchange ( Customer / Vendors) Similar to defining Down payment request Financial Supply Chain Management -> Cash Management -> Structuring-> Special G/L Transaction Levels-> Customer-> Define Bill of Exchange Transaction: OBYN

Financial Supply Chain Management -> Cash Management -> Structuring-> Special G/L Transaction Levels-> Vendor-> Define Bill of Exchange Transaction: OBYM

4.7 Define Others ( Customer / Vendors) Similar to Down Payment request or Bills Of Exchanges Financial Supply Chain Management -> Cash Management -> Structuring-> Special G/L Transaction Levels-> Customer-> Define Other Transaction: OBXY

Financial Supply Chain Management -> Cash Management -> Structuring-> Special G/L Transaction Levels-> Vendor-> Define Other Transaction: OBXT

4.8 Define levels in payment requests In this step you define separate Cash Management planning levels for payment requests. If the Cash Management update writes the flows to a bank account, you must define a separate planning level for payment requests. Otherwise, the payment requests are displayed at the same level as the bank statement postings when you call up the cash position. This setting is optional if the Cash Management update writes the flows to a bank clearing account. Financial Supply Chain Management -> Cash Management -> Structuring-> Define levels in payment requests Transaction: SPRO

5 Bank Accounting

All banking-related accounting activities in Customizing for ‘Financial Accounting’. are explained in the corresponding IMG.

Following are the different activities

• check deposit bill of exchange presentation • returned bills of exchange payable manual bank

statement • electronic bank statement

• lockbox

• preparing POR procedure (Payment order with ref. no.)

• account balance interest calculation

6 Cash Concentration

In cash concentration, balances from a number of accounts are concentrated in one target account, leaving only a minimum balance you have specified in the source account(s).

After comparing the bank accounts and establishing conditions for financial planning, you can carry out your cash planning. Where there are excessive cash balances, you can invest these in overnight or time deposits.

All accounts you plan to concentrate are linked together in a grouping structure. You can define various groupings for different cash concentrating procedures accordingly.

The system generates a proposal for concentrating cash based on your grouping. This proposal contains the ending balance for the day and the cash planning results, that is, the expected account transfers. You can correct the proposal at any stage.

The system prints the outcome of the cash concentration in the form of payment orders to banks. It also creates the payment advices needed for determining the new bank account balances.

6.1 Steps for Configuration In the following steps you make the settings that affect cash concentration. These include

• specifying • a planning balance • tolerance shortage/excess (related to the planning

balance) • a minimum balance (credit limit or base amount)

• a planning minimum • an intermediate account • minimum amount for payment advice creation • clearing accounts

• Specifying a form for printing the payment orders. • specifying a payment methods for creating payment

requests for account transfers

6.2 Define Intermediate Account, Clearing Accounts, and Amounts

In this step, you make the following settings for each bank account in regard to cash concentration :

• Maintain the planned balance • Specify the planning minimum • Specify the minimum advice amount

• Define the intermediate account (if you want to concentrate cash using an intermediate account)

• Define clearing accounts for the update

Financial Supply Chain Management -> Cash Management -> Business Transactions-> Cash Concentration-> Define Intermediate Account, Clearing Accounts, and Amounts Transaction: SPRO

6.3 Specify forms

In this step, you specify the forms needed for correspondence.

1. Define the forms for each company code. 2. Allocate them to the appropriate program.

Financial Supply Chain Management -> Cash Management -> Business Transactions-> Cash Concentration-> Specify forms Transaction: SPRO

6.4 Define Payment Methods for Payment Requests

Here you can specify the payment methods for creating payment requests. The currency field is optional. If no currency is entered, the entry is valid for all currencies.

Financial Supply Chain Management -> Cash Management -> Business Transactions-> Cash Concentration-> Define Payment Methods for Payment Requests Transaction: SPRO

7 Prepare Production Startup and Data Setup

This menu supports you when you are implementing the cash management and forecast (CM&F). You can activate company codes for the CM&F update: table settings are checked in the process. The management groups needed for the CM&F update can be entered in the customer and vendor master records and partial or total reconstruction of the totals records is now much easier.

The program has six areas, which you can reach by means of the status buttons:

• Activate company code • Cust/vend data • Data setup • Data reconciliation • Data correction • Check Customizing

Financial Supply Chain Management -> Cash Management -> Tools -> Prepare Production Startup and Data Setup Transaction: FDFD

• Activate company code When a company code is activated for CM&F, the first effect

is that CM &F data can be updated when CM&F-relevant funds movements or planning takes place. To update from the logistical applications MM and SD, there are further indicators which must be set if data is to get from logistics into cash management.

During activation, all the necessary table settings are checked and, made, if necessary.

• Cust /Vend Data

You can use this function to enter planning groups in vendor and customer master records. Planning groups must be in place for open items to be updated in CM&F

• Data Setup

Under data setup, you can copy the existing documents, open items, planning records, and account balances into CM&F.

Here, you can stipulate whether the data setup is to cover the data from the logistical modules SD and MM, along with agency deals or data from Treasury Management.

• Date Reconciliation

A report is available with which you can schedule data reconciliation as a batch job. report documentation .

• Data Correction If an inconsistency should occur between the data in CM&F and the actual data, this option allows you to circumvent the need for a complete data reconstruction. Depending on the origin of the inconsistency, the reconstruction can be limited to particular areas.

• Check Customizing

This function allows you to check the Customizing of the CM&F. It is, for example, checked if a level is used in several applications or if a planning group is used in customer master records as well as vendor master records. (Both are not allowed and will produce errors.)

8 Reorganize Cash Management In this step, you reorganize the tables in Cash Management. Due to storage reasons and for improving access time, reorganization must be carried out regularly so that

• all expired memo records and summary records are deleted, and

• All summary records can be stored in condensed form.

SAP Cash Management Configuration

SAP R/3 ENTERPRISE ECC6

Published by Team of SAP Consultants at SAPTOPJOBS

Visit us at www.sap-topjobs.com

Copyright 2009-11@SAPTOPJOBS

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means electronic or mechanical including photocopying, recording or any information storage and retrieval system without permission in writing from SAPTOPJOBS.