Generate Your Cash Flow Report Automatically Using SAP ECC and SAP BusinessObjects Planning and Consolidation

  • by Dr. Marco Sisfontes-Monge, Managing Partner, Arellius Enterprises, Inc.
  • February 3, 2011
The cash flow and shareholders’ equity reports are two of the most challenging reports in any legal consolidation project. Generating them on a monthly basis is even more difficult if the right configuration or design is not in place. Follow a real-world procedure used to generate and calculate the statement of cash flows and shareholders’ equity reports on a monthly basis using SAP ERP Central Component (SAP ECC) and legacy data as the source systems and SAP BusinessObjects Planning and Consolidation as the target environment.
Key Concept
An important component in considering the cash flow report in your SAP systems is transparency. Even though the real value of these reports is highly confidential, the access of the information and the business rules that control the generation of this report cannot be hidden from the implementation team, which needs to guarantee that the design complies with legal regulations. The logic behind the development must be clear to both internal and external auditors, and in the end it must be available in a document for their review, if required. When talking about financial transactions, flexibility means being able to identify the value changes that affect a particular account in SAP ECC; however, its analysis and configuration might require extensive work depending on the complexity of the SAP FI/CO configuration and the level of detail required.

The generation of a correct cash flow report for any organization is one of the most important and difficult tasks, so much so that many companies generate it only at the end of the year when all final values are available for the balance sheet and profit and loss (P&L) statements.

However, SAP ERP Central Component (SAP ECC) can provide the information required by SAP BusinessObjects Planning and Consolidation to generate the cash flow report for each period, thus improving the closing process and the availability of information on a monthly basis. Even though the process sounds simple and very flexible, the challenge resides in being able to track all the changes associated with one particular account that are related to the cash flow report, and how cash flow changes during the month from the opening balance until the closing balance at period end.

You can generate a monthly cash flow report using a combination of out-of-the-box functionality in SAP ECC and new capabilities in SAP BusinessObjects Planning and Consolidation. However, if your systems are a combination of SAP ECC and legacy environments, the generation of a cash flow report might also be a more difficult task because adjustments and monthly account movements are handled in two different environments in a different way.

In addition, it is a challenge for IT managers, business analysts, and financial functional users and consultants to understand what cash flow is, how it differs from balance sheet and P&L statement data, and most important of all, how to calculate this report automatically. However, making changes to SAP ECC and evaluating the flexibility of your legacy system might not be well received by the finance and IT teams. This can generate friction between the finance and IT departments when they find out that the cash flow report cannot be generated automatically without the required adjustments to your SAP ECC environment. I’ll show you how to generate the cash flow report automatically using standard functionality from SAP ECC and the capabilities available in SAP BusinessObjects Planning and Consolidation in a precise way and with a considerable reduction in data manipulation. The system can then accept the adjustments to the cash flow report instead of you having to wait until the end of the year for the CFO to review this information, which is in many cases manually calculated.

It is very possible that an SAP FI/CO team lead will say that this concept is impossible before even considering the idea and will be reluctant to perform any work to resolve this major dilemma for a corporation. For this reason, the logic behind this article focuses on how the data can be separated or identified in SAP ECC. It explains what kind of data is needed from the legacy system to standardize the data with data from SAP ECC and to upload it in SAP BusinessObjects Planning and Consolidation. You then can use it to generate your cash flow report and shareholders’ equity statements automatically every month after the period-end close. 

Dr. Marco Sisfontes-Monge

Dr. Marco Sisfontes-Monge is managing partner of Arellius Enterprises based in New York City and for more than 15 years has supported SAP implementers, direct clients, and other customers in Europe, North America, Latin America, Asia, and Africa in the following industries automotive, insurance, pharmaceutical, logistics, software, utilities, chemical, oil and gas, exploration and natural resources, discrete and process manufacturing, retail, and financial services. His background includes project management and performance measurement, product- and activity-based costing, design optimization, discrete and process simulation, system dynamics, and structural equations modeling. He also has finance specializations from the London Business School and Said Business School from Oxford University. He wrote the SAP PRESS books CPM and Balanced Scorecard with SAP, Controlling-Profitability Analysis (CO-PA) with SAP, Implementing SAP Business Objects Planning and Consolidation (SAP BPC): Volume I: Foundations, and Implementing SAP BusinessObjects Planning and Consolidation (SAP BPC) Volume 2: Advanced Concepts.

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