Step by Step Process for - Configuration of Cash and Liquidity Management in SAP

S/4HANA

1. Activate Cash and Liquidity Management: Ensure that the Cash Management and Liquidity
Planner functionalities are activated in your SAP S/4HANA system. This can be done using the
Business Function Activation (transaction code SFW5).

2. Define House Banks: Define the house banks that you want to use for cash and liquidity
management. House banks represent the bank accounts that you will manage and reconcile in the
system. Use transaction code FI12_HBANK to create new house banks or modify existing ones.

3. Set up Bank Accounts: Define the bank accounts that you will manage within each house bank.
Use transaction code FI12_BANK to create new bank accounts or modify existing ones.

4. Configure House Bank Accounts: Assign GL accounts to the bank accounts for cash and liquidity
management. This is done through transaction code FI12_FLBK.

5. Define Bank Account ID: Assign a Bank Account ID to each bank account. The Bank Account ID
uniquely identifies a bank account across different company codes and ensures consistency in
reporting and analysis. Use transaction code FI12_IBAN to define Bank Account IDs.

6. Set Up Cash Position: Define the cash position relevant to your organization by specifying the cash
positions relevant for cash concentration and cash pooling. These positions are used to calculate
liquidity forecasts and enable cash management processes. Use transaction code CFM1 for cash
positions.

7. Define Liquidity Groups: Define liquidity groups to group together bank accounts with similar
liquidity management requirements. Liquidity groups can be created based on factors like currency,
business area, or geographical location. Use transaction code CFM5_LGROUP to create liquidity
groups.

8. Configure Cash Pools: If you plan to use cash pooling, define cash pools and assign bank accounts
to them. Cash pooling facilitates centralized cash management and helps optimize cash flows within
the organization. Use transaction code CFM5_CPOOL to configure cash pools.

9. Set Up Payment Program: Configure the payment program to ensure that cash flows are updated
in the cash management system. Use transaction code F111 to set up the payment program.
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 Step by Step Process for - Configuration of Cash and Liquidity Management in SAP
S/4HANA

10. Define Liquidity Planners: Define liquidity planners who will be responsible for forecasting and
managing cash flows. Use transaction code CFM5_PLANNER to create and assign liquidity planners.

11. Set Up Liquidity Forecast: Configure the liquidity forecast based on your organization's
requirements. This includes defining forecasting methods, time profiles, and planning levels. Use
transaction code CFM5_FORECAST to set up the liquidity forecast.

12. Implement Interfaces: If you need to integrate SAP S/4HANA with external systems like banks or
treasury management systems, implement the necessary interfaces. This can involve implementing the
SAP Financial Services Network or using other integration methods.
13. Configure Payment Medium Formats: Define the payment medium formats to generate payment
files in the desired format for bank communication. Use transaction code DMEE to configure payment
medium formats.

14. Set Up Cash Flow Analysis: Configure cash flow analysis to analyze and monitor cash flows in
your organization. This involves defining cash flow categories, cash flow types, and cash flow
indicators. Use transaction code OT83 to set up cash flow analysis.

15. Activate Cash Management Integration with Treasury: If you are using Treasury and Risk
Management in conjunction with Cash and Liquidity Management, activate the integration between the
two modules. This allows for better cash flow forecasting and liquidity planning. Use transaction code
SPRO to access the implementation guide and activate the required settings.

16. Configure Cash and Liquidity Management Reports: Set up the relevant reports and analytics
for cash and liquidity management. SAP S/4HANA provides various standard reports that can be
customized as per your organization's reporting requirements. Use transaction codes such as
S_ALR_87012341 or S_ALR_87012351 to access the standard reports.

17. Perform Testing and Validation: Before going live with the Cash and Liquidity Management
configuration, it is essential to test and validate the setup. This helps ensure that the configuration is
working as expected and meets your organization's requirements. Run test scenarios, perform data
validations, and involve key stakeholders in the testing process.

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18. Train Users: Once the configuration is complete, provide training to the users who will be
responsible for using the Cash and Liquidity Management features. This helps them understand the
system functionalities, input data accurately, and make informed decisions based on the generated
reports and forecasts.

19. Go Live: After completing the testing, validation, and training phases, you can go live with Cash
and Liquidity Management in SAP S/4HANA. Ensure that proper documentation, procedures, and
support channels are in place to assist users during the transition.

Certainly! Here are a few more steps to continue the configuration process for Cash and Liquidity
Management in SAP S/4HANA:

20. Define Cash Management Groupings: Configure cash management groupings to categorize and
organize your cash management data. This allows for easier analysis and reporting. Use transaction
code CFM1_GRP to define cash management groupings.

21. Set Up Liquidity Planner Profiles: Create liquidity planner profiles to define the roles and
responsibilities of each liquidity planner within the organization. You can assign specific permissions
and authorizations to each profile. Use transaction code CFM3 to configure liquidity planner profiles.

22. Configure Cash Accounting: Set up cash accounting to track cash flows in your organization. This
involves defining cash journals, cash postings, and cash positions. Use transaction codes such as
FBCJ and FBCB to configure cash accounting settings.

23. Define Bank Statement Processing: Configure bank statement processing to automate the
reconciliation of bank statements with your cash management data. This involves defining posting
rules, bank statement codes, and reconciliation keys. Use transaction codes such as FF67 and FF68
to set up bank statement processing.

24. Activate Liquidity Planner: Activate the liquidity planner functionality to enable cash flow forecasting
and liquidity planning. Use transaction code CFM3 to activate the liquidity planner.

25. Set Up Cash Concentration: If your organization utilizes cash concentration, configure the settings
for cash pooling and cash concentration. This involves defining concentration rules, target accounts,

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and concentration limits. Use transaction codes such as CFM5_CPOOL and CFM5_ CCONC to
configure cash concentration.

26. Implement Cash Forecasting Strategies: Set up cash forecasting strategies to determine how cash
flows are predicted and consolidated within the system. This involves defining forecasting methods,
time horizons, and forecasting profiles. Use transaction code CFM5_FORECAST to configure cash
forecasting strategies.

27. Configure Notifications and Alerts: Set up notifications and alerts to proactively monitor cash and
liquidity positions. This can include setting up thresholds for cash flows, liquidity positions, or bank
account balances and defining alert triggers. Use transaction code CFM5_ALERT to configure
notifications and alerts.

28. Monitor and Fine-tune Configurations: After the initial configuration, continuously monitor and fine-
tune the Cash and Liquidity Management settings based on your organization's evolving needs.
Regularly review cash flow forecasts, liquidity positions, and reports to ensure accuracy and efficiency.
.
END USER TRANSACTION
Certainly! Here is an example of an end-user transaction for Cash and Liquidity Management in SAP
S/4HANA, along with a test case:

Transaction Code: FIORI Tile: Manage Liquidity Items - Cash Management (App ID: F1919)

Example:
Suppose an end-user needs to create a cash flow item for forecasting in the liquidity management
system. They would use the Manage Liquidity Items - Cash Management transaction accessible
through the FIORI tile.

Test Case:
Test Case Name: Create Cash Flow Item for Forecasting

Steps:
1. Log in to the SAP Fiori Launchpad.
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 Step by Step Process for - Configuration of Cash and Liquidity Management in SAP
S/4HANA

2. Search and open the "Manage Liquidity Items - Cash Management" app (App ID: F1919).
3. On the Manage Liquidity Items - Cash Management screen, click on the "New Cash Flow Item"
button.
4. Provide the following details in the required fields:
- Company Code: Select the relevant company code.
- Cash Pool: Select the appropriate cash pool for which you want to create the item.
- Cash Position ID: Enter the cash position ID.
- Cash Flow Type: Select the appropriate cash flow type for the item.
- Amount: Enter the forecasted amount for the cash flow item.
- Due Date: Enter the due date for the cash flow item.
- Currency: Select the currency for the cash flow item.
- Additional Details: Enter any additional information related to the item.
5. Click on the "Save" button to save the cash flow item.
6. If the cash flow item passes all validations, it will be successfully created in the liquidity management
system.
7. Verify that the cash flow item is created and visible in the relevant reports and forecasting scenarios.

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