Getting a Sneak Peak at a New Approach for Liquidity Planning

As an outcome of the recession that began in 2008, companies increasingly plan for sources of funding and other liquidity instruments. Increased hedging against financial risk and a renewed interest by regulators and oversight commissions on the reporting of financial instruments provide even more catalyst for sound liquidity planning. You can use SAP BusinessObjects Planning and Consolidation to include planning and management of liquidity instruments as a part of business planning and forecasting activities by using its starter kit for liquidity planning. The starter kit is available for companies already using SAP BusinessObjects Planning and Consolidation 7.0 at no additional charge.

The starter kit for liquidity planning brings companies using SAP systems best-in-class management capabilities for their liquidity forecasting and observation needs. Liquidity forecasting is currently the top concern for treasurers, with higher funding costs and uncertain revenues due to major uncertainties in the economic outlook. According to a 2009 report by Deloitte, improvement in the cash forecasting capabilities of current treasury IT systems is of the highest priority for treasurers (94% of respondents) because current forecasting features are considered “insufficient.”

There are several advantages to organizations looking to adopt a more comprehensive liquidity planning approach. In a recent FSN study, best-in-class organizations share common characteristics in the area of cash management and liquidity planning. Best-in-class stand out by being much more likely to use technology to enable and support lower days sales outstanding (DSO), with an average of 21 days versus 53 for peers. They also have 84% accuracy in their cash flow reporting — 35% higher than their peers. Best-in-class companies also consider risk management practices, with a 43% use of GRC tools versus a 29% level in other companies surveyed. In addition, 75% of best-in-class companies have the ability to reforecast as market conditions change versus 53% of others surveyed.

You can use SAP BusinessObjects Planning and Consolidation as the foundation for a liquidity planning and cash management solution. Some of the starter kit’s features for liquidity planning include the following:
• Gives organizations a jumpstart in the implementation of a solution for liquidity planning
• Addresses the needs of the treasury department and the CFO
• Enables a faster implementation incorporating best practices that reinforce and improve the liquidity planning process
• Can be implemented as a new installation or incorporated into your existing SAP BusinessObjects Planning and Consolidation application
• Is system independent — can be sourced through flat files and integrated with SAP ERP Financials as well as other ERP systems

The liquidity planning starter kit described in this article is a joint initiative from SAP and Deloitte with both parties bringing it to market based on a tool set and accompanied professional services.

Please visit SAP Insider Financial Experts to view the complete article . Our recent SAP PRESS book Understanding SAP BusinessObjects Enterprise Performance Management covers this and other topics and is available now.


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