Improve the Accuracy of Cash Management Reporting

  • by Kees van Westerop, Senior SAP Consultant, Kwest Consulting
  • January 22, 2015
Cash management reporting automatically shows a company’s cash and liquidity position during a specific time period. To be able to report the data, the SAP Cash Management module gathers its payment data from several SAP modules such as AR, AP, bank accounting, sales, and purchasing. This means that any future financial transaction not recorded in the SAP system, such as salary payments, is not reported in SAP Cash Management. Also, the value of purchase orders would not be reported correctly. The use of memo records and distribution functionality can help you to achieve more accurate cash management reporting.
Learning Objectives

After reading this article, you will know how to:

  • Use memo records for manual registration of future financial business events and understand the life cycle of these records
  • Use distribution functionality to get a more realistic value of the purchase orders

Key Concept

SAP Cash Management is a sub-component of SAP Receivables Management that helps you maintain the liquidity and monitor the cash position of a company on a day-to-day basis. It collects payment-related data from other SAP ERP Central Component (ECC) modules to be able to report the cash position on any required day.

Within SAP Cash Management, the focus is often on the payment-related data coming from other modules; however, SAP Cash Management offers more than just that. It also has functionality of its own that may be useful for a better cash management and liquidity forecast.

I focus on two subjects related to functionality within SAP Cash Management itself. The first is the fact that the materials management (MM) interface does not always transfer the correct values. The value of the purchase orders are transferred without purchasing taxes such as value-added tax (VAT) and Goods and Services Tax (GST). This means, for example, that within Europe, local purchase orders are valuated 20 to 25 percent too low. Export purchases have a correct value because in that case purchase taxes are zero rated. The subject is discussed in the section titled “Purchase Orders Without Tax (VAT).”

The second subject is that future events are not recorded in the SAP system. Examples of future events are salary payments, tax payments, and large expenditures not yet transformed into purchase orders. I explain how to use memo records for this process.  This subject is discussed in the section titled “Memo Records.”

I assume that you are familiar with cash management or at least have read the Financials Expert article “How Implementing SAP Cash Management Helps in Monitoring Your Working Capital” by Gyanendra Mishra. This article provides you with an extensive overview of cash management.

Kees van Westerop

Kees van Westerop has been working as an SAP consultant for more than 25 years. He has an MBA degree in mathematics and a degree in finance. Kees has been concentrating on the financial modules, especially in general ledger accounting, cost center accounting, and consolidation. He also has a great deal of experience with rollouts of kernel systems and integrating finance and logistics.

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