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More efficiently designed finance processes


In the area of cash and liquidity management, SAP's standard FI license for financial accounting offers ways to simplify and automate workflows. This is particularly true with regard to the processes used for day-to-day cash management, short-term liquidity forecasts and liquidity planning. Yet many users simply aren't familiar enough with the product and its capabilities.




SAP is Europe's undisputed platform for accounting, planning and business processes. Where does this dominance come from, at least within Europe ?
Jochen Stiebe: SAP's dominance stems from the fact that up until the early 1990s there was no well-established standard software designed to handle companies' financial management and accounting. SAP seized the opportunity and developed a standard accounting application which caught on and has remained prevalent until today. From the very beginning, one key advantage of SAP Accounting was that SAP wasn't simply an accounting system - it's always been a financial management system. This interplay between accounting and financial management has stood the test of time and even become increasingly important over the past few years. If you look at it that way, SAP can also be called the vital link between the accounting and operational management divisions.

Do users even take advantage of the comprehensive capabilities offered by SAP ?
There's a clear answer to that question: "NO.” SAP is inadequately used by the majority of companies. Of course there are many enterprises which make very intense, targeted use of SAP's special application modules (SAP Materials Management, SAP Sales Order Management, SAP Real Estate, SAP Production Management). Essentially it's the basic modules, in other words the standard modules delivered to all SAP customers such as FI (Financial Accounting), which aren't used to their full capabilities. I think this is due to the historical gap between accounting and operational management. Because of this, SAP Financial Accounting was and is sold as accounting software and used by the Accounting department. Since those departments aren't as interested in multidisciplinary functions and evaluation capabilities, they are forgotten or simply not really mentioned during acquisition or later training. Their main focus is on the accounting feature.

What are the biggest "sins” when it comes to inadequate use of SAP or, in other words, which functions are neglected even though they've been available within the software package for some time already ?
I wouldn't talk about "sins” but rather the fortunate coincidences faced by SAP users. Each company with an SAP Financial Accounting license for SAP R/3 release 4.6c, for instance, also has a free license for the SAP Cash & Liquidity Management module. Besides comprehensive cash management software this module also features an integrated liquidity analysis and planning tool, the SAP Liquidity Planner. The SAP Liquidity Planner helps bring transparency to company-specific liquidity drivers and uses a function integrated into the SAP system to search through the company's financial accounting data and allocate all daily operational cash flows (bank statement) according to the source and use of funds. Irrespective of the industry they work in, this puts businesses in a position to display and evaluate liquidity with regard to a specific product, project, object, service, etc.

Does SAP offer practical advantages to any specific industries or business segments and is use of the tool you just mentioned similar across all industries and sectors ?
During its early years SAP had already begun concentrating on developing special industry-specific solutions within the SAP standard such as those for banks, insurance companies and industrial companies. The SAP Liquidity Planner tool, on the other hand, is industry independent since it constitutes an additional analysis and evaluation tool of SAP Financial Accounting which uses existing accounting information for the purpose of boosting efficiency and the transparency of ongoing operational business processes.

Which specific challenges do cash flow statement processes present to SAP ?
Actually that question should really be reversed to ask: Would you like to continue facing the specific challenges of drawing up a cash flow statement or would you rather rely on SAP's automatically generated statements? Most companies still draw up cash flow statements indirectly, in other words they take existing information from balance sheets and business results to derive the figures. That process entails a massive amount of manual work every year. The SAP Liquidity Planner makes it possible for companies to have a cash flow statement generated directly by the system which is based on actual cash flows. Since it's based on the cash flow statement, or the actual flow of cash, the SAP Liquidity Planner prevents discrepancies in calculated figures and incorrect interpretations.

One of financial management's daily tasks is to manage liquidity within the company. Particularly during an economic slump or, as we've just experienced, during a major economic and financial crisis, cash management becomes a matter of survival. What tools does SAP offer for handling cash flows ?
Over the course of the last few years and particularly in the past months, greater priority has been given to cash and liquidity management within the scope of financial management work. In this context, cash flow transparency is where companies have problems since this can usually only be achieved by devoting a large number of man hours to manual research work in financial accounting. This cost, both in terms of time and staff, as well as daily uncertainty regarding future cash flow trends and dependency on external banks are increasingly prompting companies to analyze their financial processes, design them more efficiently and evaluate them on a continuous basis. The SAP Liquidity Planner was developed precisely for this function and is thus a suitable tool for financial management.

The big advantage of a comprehensive software application is the central integration of data without redundancies and interfaces to outside systems and tools. Yet how can other applications which already exist within the company be linked to SAP ?
SAP is an open system. None of the companies I advise has the same SAP environment. As a result, we need to link a variety of different systems and applications to SAP. This is mainly done by taking the classical approach which involves sophisticated interfaces and, where data storage is concerned, through the use of the internal SAP database SAP Business Warehouse. Here SAP offers a web-based portal, the SAP Netweaver, which makes it possible to bundle all company data from SAP and non-SAP systems throughout the group and make these available for processing and evaluation purposes.

Jochen Stiebe
Jochen Stiebe is employed by KPMG AG in Switzerland as a manager in the area of Financial Risk Management. He has over 12 years of experience in system-based cash, treasury and risk management. His current advisory activities focus on recording, analyzing and designing more efficient cash and liquidity management processes as well as implementing these both from a specialist and system-oriented perspective.

Interview by KPMG (CH)

Lundi 12 Juillet 2010
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