Cash & Liquidity Management with IHC (In-House Cash)

[ajaycwa1981]

Hi All

I have this scenario that I want to take some guidance on, since I could not find anything in Standard SAP Documentation.

The core Q is does S/4 HANA CLM work with IHC and do the reports such as Cash Flow Analyzer, Cash Position Analysis and Liquidity Forecast work when IHC is there

Scenario: There are, lets say, 6 Company Codes. But only one of them have a Central Bank Account which is used to pay to vendors as well as to receive money from the customers.. In this case, how will the reports like Cash Flow Analyzer, Cash Position Analysis and Liquidity Forecast work

In this scenario, Company Code A makes payment on behalf of Company Codes B to E..

- So, in Company Codes B to E there is no actual bank account. These Co. Codes will only have Sales orders, purchase orders, open invoices and all other data in One Exposure. But they dont have a bank account.

- In Co. Code A, you have In and Out bank flows but these are for Self as well as on behalf of Co. Codes B to E. In addition, Co. Code A will have its own flows from Sales Orders, Purchase Orders, Invoices, etc..

So how will my reports work at each Co. Code level ? Will they work out of the box ? Or do we get the bank statement from IHC per Co. Code and create memo records for the cash position and then run reports at Co. Code level?

Regards

AJ

hongjun.qian ignacio.kristof martin.schmidt2 lawrence.liang

[ankish]

Hi Ajay,

As per my understanding, your ask is to get cash position at the company code level. When you work on IHC scenario, you create IHC current account for each participant (in your case, company code B, E and others) at IHC center (company code A). You also create a virtual house bank and bank account in the respective participant company codes. Whenever you make a payment to an external vendor or intercompany payment, you hit your virtual account which will create a payment order (via PAYEXT IDOC) and company code A will make the payment. At the end of day, Company code A will send a bank statement (FINSTA) which will knock off your IHC clearing account. so, entire IHC process works just like your external bank so that you will have same reporting as you have with your external bank. Your cash position in classic cash management (FF7A) or in Cash flow analyzer will appear based on virtual bank accounts. There will be no impact on liquidity forecast. I do not see any need to create a memo record unless there is any specific requirement by the client. I hope this clarifies.

Thanks,

Ankish

[Ravi_Ramamurthy]

Hi AJ,

This is a really good question. For Cash position, primarily we do it at a bank account level and we would consider the external bank accounts cash flow. So when a POBO payment order is posted in IHC, it creates a payment request in the IHC company code/real bank account and will reflect in cash position in CFA.

For liquidity forecast, we have to be a little careful - the invoices will show up in liquidity forecast, however there is an inherent challenge in liquidity forecast that we cant do it at a bank account level (even without using IHC we cant do forecast at bank account level) - so in our forecast, we have to include all the company codes and look at a layout in CFA not at the bank account level.

The basic cash position or forecast based on planning levels/planning groups will work. The challenge what wont work is doing the same using liquidity items. We cannot derive liquidity items across company codes, hence if we want to view cash position or liquidity forecast or past cash flow analysis it is a challenge and needs to be designed carefully looking at all possible liquidity item derivation. This is definitely an area SAP can potentially look into - there is a big challenge on liquidity item based cash position/forecast and forecast vs actual comparison.

Regards,

Ravi