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Excerpt from the book Implementing SAP S/4HANA Finance by @anupmaheshwari. Used with permission of SAP PRESS. All rights reserved.

 

This blog gives an overview of the Customizing activities for liquidity planning in SAP Cash Management.

To configure the planning units and planning unit hierarchy, you need to configure the Customizing activities under Financial Supply Chain Management > Cash and Liquidity Management > Cash Management > Liquidity Planning, as shown below.

 

1 Specify an SAP BPC Configuration Set

In this Customizing activity, you specify an SAP BPC configuration set that you want to use for liquidity planning, as shown in below. If you want to customize and use your own configuration set, you need to define the following objects in SAP BPC, version for SAP NetWeaver:

  • Environment
  • Model
  • Process template
  • InfoProviders

 

2 Create Planning Units

In this Customizing activity, you configure planning units and their related attribute description, aggregation currency, planner, reviewer, and company code to be used in liquidity planning. Planning units are organizational units that need to provide liquidity plan data input. Each planning unit is assigned to one company code.

You can define multiple planning currencies for each planning unit. A particular planning currency must be specified to enter plan amounts into the liquidity plans for the selected planning unit, as shown below.

 

3 Activate Planning Unit Hierarchy

You use this Customizing activity to activate a planning unit hierarchy (see next figure) that is used for all liquidity planning activities. Follow these steps:

1. Start SAP BW modeling using Transaction RSA1.

2. Double-click the InfoObject /ERP/ORG_UNIT, which can be found under Modeling > InfoObjects > Financial Management & Controlling > Cash & Liquidity Management > Characteristics.

3. On the Hierarchy tab, choose the Maintain Hierarchies button.

4. Create a new planning unit hierarchy by clicking the Create button in the Initial Screen Hierarchy Maintenance, and specify the hierarchy name and a short description.

5. Add nodes to the hierarchy by using the Planning Unit button.

6. After the planning unit hierarchy has been defined, check the Planner and Reviewer of planning under the Customizing activity Maintain Planning Unit Settings, as shown below. This will make the reviewer of the subsidiary planning unit and the planner of the parent planning unit consistent, which, in turn, will allow you to modify the status of SAP BPC.

7. Activate the planning unit hierarchy that will be used for all liquidity planning activities. Once activated, you’ll receive the following message:

During the activation process, if you get any error messages, then you need to analyze the description of the message and correct the planning unit master data to resolve the issue. Two of the typical errors you might come across include the following:

  • The planning currency can’t be assigned to the planning unit without a company code.
  • Planners and reviewers aren’t assigned correctly.

4 Currency Conversion Rules

To mitigate the risks of possible exchange rate fluctuations, you may want to hedge your foreign currency exposure by converting your cash surplus into another currency. To do so, you must first define the rules for currency conversion using the Customizing activity under Financial Supply Chain Management > Cash and Liquidity Management > Liquidity Planning > Define Currency Conversion Rules, as shown below.

You define a currency conversion rule for each currency that you want to convert. To define a rule, you create a new entry and specify the following:

  • Outflow Liquidity Item (cash outflow liquidity item): LP_EXI.
  • Inflow Liquidity Item (cash inflow liquidity item): LP_EXF.
  • Source Planning Unit: The planning unit that is purchasing the currency.
  • Target Planning Unit: The planning unit that is selling the currency.
  • Src. Curr.: The currency to be sold.
  • Tar. Curr.: The currency to be purchased.

 

5 Reference Data Sources

There might be business rationale to define reference data sources other than the standard Key 001 to 004 that are provided by SAP (figure below). This can be done in the Customizing activity so that the standard SAP BW modeling provided by SAP can be reused.

 

6 Exclude Liquidity Items Representing Balance Values

Liquidity items can be represented to reflect both the cash flows and balance values. Liquidity planning computes its calculation from the liquidity items that represent only the cash flows. Thus, the liquidity items that represent balance values need to be removed from the liquidity planning calculation using the Customizing activity so that the plan data are calculated correctly.

7 Liquidity Planning Types

The planning type is used to classify the different kinds of planning data. SAP provides two predefined planning types, as shown in the below figure.

  • Monthly rolling plan: Liquidity plans of this type are updated every month based on the updated data as posted in the system. The plan is saved as a separate version from each planning cycle.
  • Non-rolling plan: Liquidity plans of this type are constant and not updated on a periodic basis.

 

Excerpt from the book Implementing SAP S/4HANA Finance by @anupmaheshwari. Used with permission of SAP PRESS. All rights reserved.

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5 Comments

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      1. Renan Ceguinato

        Hi Sean,

         

        I confirmed in the material BPC for S/4 Hana and the answer is YES, before start setup liquidity planner you have to setup BPC embedded.

        Pay attention with the license, to setup BPC in S/4 Hana is necessary license of BPC for Netweaver.

         

        Renan Ceguinato.

        (0) 

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