Describing the Intercompany Process for Cash Concentration (2U8)

This scope item enables the cash manager to establish cash pools, execute cash concentration, and track cash pool concentration logs. Different reports are available to cash manager. Key cash concentration criteria can be defined. The cash manager can also define a profile to filter different planning levels for cash pools.

The key process flows covered by the item include the creation and management of cash pool master data. From this master data setup it is possible to run a intercompany cash concentration.

The item also facilitates the handling of the follow-up transactions.

You can access the Manage Cash Pools app to maintain cash pool master data for a physical cash pool.

With this app, you can create, delete, and display cash pools with the assigned bank accounts. The master data can later be used in the cash pooling feature. As total cash balances are managed centrally rather than locally, it can then help your company to improve its liquidity management. You can also display the whole structure of cash pools in the Cash Flow Analyzer app.

The bank account closing balance is calculated based on the predefined bank account balance profile. With the self-service configuration app Assign Planning Levels to Profiles, you can define the expected closing balance of bank accounts which can then be used in the cash sweeping between the header account and subaccounts. Therefore, make sure you have maintained the Assign Planning Levels to Profiles configuration setting in the Manage Your Solution app.

This app uses the CDS view C_CashPoolMgmtTP.

After cash pools are defined in the Manage Cash Pools app, you can maintain bank account data and other related information for the cash pools in the bank account master data. In the Manage Bank Accounts app, open a bank account record and go to the Cash Pool section. Specify whether the bank account serves as the header account of a cash pool. Additionally, if the cash pool is a physical cash pool, specify the payment method. To do so, after you have maintained the Cash Pool ID field, press Enter to enable the Payment Method field for editing.

The bank account could also act as a subaccount of a cash pool. In this case set the values accordingly for the subaccount area. The following values are only relevant when the cash pool is a physical cash pool:

• Target Balance

• Minimum Transfer Amount

• Payment Method

In the Manage Cash Pools app, the service provider bank can be defined. This way you can now define cash pools that are operated by banks in the app. You cannot perform a cash concentration for cash pools of this type using the Manage Cash Concentration app, as they are operated by banks.

To define a cash pool hierarchy with multi-level cash pools, you assign bank accounts as both the subaccount of a cash pool and the header account of another cash pool. This way, cash pools are associated in a hierarchical order. In a multi-level cash pool hierarchy, you can only assign cash pools whose service provider is bank as child cash pools. For cash pools whose service provider is bank, you must define the pool usage as Both Directions.

In the Manage Cash Concentration app, you can initiate cash concentration in physical pools for the cash sweeping between header accounts and subaccounts. You can realize an automatic simulation of funds transfer, and monitor the status of cash concentration and payment request generation. The cash concentration feature allows your company to maintain cash balances centrally, and thus improve the efficiency of cash management.

Alternatively, you can schedule cash concentration periodically in the Cash Concentration template of the Schedule Cash Management Jobs app.

Simulate the amount of money to be transferred between the assigned header accounts and subaccounts.

The calculation logic is based on the following figures:

• Before Balance:

  The bank account closing balance that is the predefined bank account balance profile.

• Minimum Transfer Amount:

  The amount that is assigned in the bank account in this cash pool, which is defined in the Manage Bank Accounts app.

• Target Balance:

  The balance that is assigned in the bank account in this cash pool, which is defined in the Manage Bank Accounts app.

After the simulation run, the cash concentration for your intercompany setup is in production mode.

The Cash Pool Transfer Report app offers the functionality to get a daily report of concentration amounts in a cash pool. You can then track the transfer of funds between header accounts and subaccounts in a specified period. A prerequisite for the cash pool transfer report to show any data is to perform a cash concentration in the Manage Cash Concentration app. After payments have been made, you are able to see the cash pool transfers in this report.

Key features of the app are as follows:

• View the daily transfer amount by cash pools in a predefined dimension with currency, header account, and subaccount.
• View bank transfers that have been confirmed by bank statements, as well as bank transfers that have been made but not yet confirmed by banks (cash in transit).
• Filter, sort, and explore data according to specific formats.
• Extend the dimension of rows and columns in the Navigation Panel area.
• Navigate to other cash management apps in the Jump To area.

Select the Manage your Solution app in order to get to the Configuration screen.

The task Configure your Solution enables you to maintain certain processes.

The bank account closing balance is calculated based on the predefined Bank Account Balance Profile. With the SSCUI app Assign Planning Levels to Profiles, you can define the expected closing balance of bank accounts which can then used in the cash sweeping between the header account and sub accounts. Therefore make sure you have made the configuration setting of Assign Planning Levels to Profiles.