Optimized management of final and prospective group liquidity with BW/4HANA / BPC and SAC

Challenge

The growing importance of financial management motivates and pushes companies to continuously invest in technological improvement in order to optimize the reliability and quality of the information produced.

In this context, an integrated information system takes on more and more value by becoming the “central storage” of all heterogeneous and relevant information for monitoring and planning the financial management of a company.

The Client, an important Italian Group in the Chemical & Pharma sector, operating in about twenty countries located all over the world, has decided to start with Qintesi the executive project for the creation of a monitoring system and Liquidity and Balance Sheet Planning. The challenge was to implement a new and innovative Direct Cash Flow Statement solution, in a year and a half of project in the SAP LC, BW/4HANA, BPC Embedded and SAC modules.

Solution

The mission shared with the Client was to create a modular financial planning environment integrated with the other applications of the corporate landscape, to ensure consistency and certify the quality of the information provided by the Treasury function.

The new application area was created through an analysis and design activity culminating in the creation of a prototype, containing the various logics and automatisms to be implemented in the forecasting phase and the different reporting schemes to be used to support the final balance and variance analysis.

Since this is a modular planning solution, the macro-business processes within the project are reported:

• Liquidity Calculation: process of automatic attribution of the financial nature carried out in SAP LC, according to a set of shared and centralized rules. The management information was managed for all levels of certainty of the data: starting from the final balance up to the forecast levels, indicated with the acronym Forecast From Stock which refers to all those liquidity forecasts with a potentially variable level of certainty, deriving from daily operations such as collection and payment forecasts for customer and supplier invoices, cash in transit, goods receipts, purchase and sale orders, intercompany financing…
• Liquidity and Balance Sheet Planning: reporting process and support of operational and strategic analyzes, carried out in the SAP BW/4HANA, BPC Embedded and SAC modules, to support the final balance and operational planning scenarios. The Budgeting & Forecasting forecasting processes were supported by the creation of integrated, centralized and automated projection mechanisms and logics.
• Liquidity Consolidation: management consolidation process of information relating to the Cash Flow Statement to support the final balance and planning scenarios.