Architecture Decisions for Cash and Liquidity Management

[Mohammed_Yaseen]

Summary

When planning target architecture based on business capability assessments, the Cash and Liquidity Management (Finance -> Treasury) capability under the SAP RBA (Reference Business Architecture) model has the SAP Analytics Cloud solution in addition to SAP S/4HANA. This leads to the requirement to understand how the products are relevant in terms of capability fulfillment and what is relevant for specific target architecture.

This article provides an overview of related evaluation and decision criteria related to solutions to support these capabilities.

Business Requirements

The Cash and Liquidity Management capability covers the following business requirements.

Bank Account Management: Centrally manage bank account data and signatories with a transparent and auditable process.

Cash Management: Manage short term cash positions with granularity.

Liquidity Forecast: Analysis of cash flow with visibility of mid-term liquidity.

Liquidity Planning: Plan rolling liquidity forecasts on a mid-term horizon.

Working Capital Management: Identify and manage surpluses and deficits in cash flows to better manage current assets and liabilities.

Solution Options

The following solutions are available for the definition of target architecture with the SAP Intelligent Suite.

1. SAP S/4HANA Cash Management
2. SAP Analytics Cloud (SAC)
3. SAP Working Capital Management with Taulia

Item 3 is not listed as a solution option in the RBA solution options but is referred to in standard SAP solution documentation and should therefore be considered when designing target architecture.

Characterization of the Solution Options

1. SAP S/4HANA Cash Management

This is the core solution for the capability and provides bank account management, cash position and liquidity forecasting features.

2. SAP Analytics Cloud (Liquidity Planning)

For customers that require to do liquidity planning, the core SAP S/4HANA Cash Management solution will not suffice, and they will have to include SAC as part of technical architecture.

Specifically, to nail down the solution scope, customers that have a need for solution process scope item 3L5 – Liquidity Planning will need SAC.

3. SAP Working Capital Management with Taulia

Customers that require a solution for active working capital management beyond the monitoring and analytics offered by Cash Management can benefit from the inclusion of SAP Working Capital Management with Taulia in their target architecture. The solution provides capabilities to support dynamic discounting and supply chain finance with access to funders, manage DSO and DPO and leverage AI-powered prediction models. The below graphic illustrates the key solution capabilities.

Criteria to determine the most suitable target solution

Determination of target architecture requires breaking up the capability of Cash and Liquidity management into further business requirements or capabilities that were listed earlier.

Bank Account Management --> SAP S/4HANA Cash Management

Cash Management --> SAP S/4HANA Cash Management

Liquidity Forecast --> SAP S/4HANA Cash Management

Liquidity Planning --> SAP Analytics Cloud

Working Capital Management --> SAP Working Capital Management with Taulia

Conclusion

While the SAP S/4HANA Cash Management is the core solution for the capability Cash and Liquidity Management, the target architecture can benefit from detailing the capability and mapping to the additional solutions that contribute to specific sub-capabilities as listed in the previous sections.