Many companies who own SAP BPC have a need to streamline their cash flow process. If a company uses SAP BPC for Consolidations, it already has balance sheet and income statement data, at a minimum, that comprise a good portion of what’s needed to create a cash flow. SandPoint has helped many companies create cash flows in BPC via various methods to help improve their process.
Report-Only Method
The first method we’ve implemented for cash flow is a method that is solely based on using a cash flow report matrix. This method uses report values only (no logic) to calculate changes in balances in balance sheet accounts, and apply those values to cash flow line items for the Operating, Financing and Investing sections. It also uses report values to apply income statement and statistical/roll-forward data into cash flow line items. The benefits of using this method is that it’s the quickest to implement and gives the most user flexibility to drive values and format of the cash flow report in a variety of ways. The downside of this method is that any Excel-driven method is prone to errors and it can also become a very large spreadsheet if a company is trying to calculate FX Impact in a report.
Report Method including FX Impact Logic
The second method is very similar to the first method. The cash flow calculations are primarily report driven. The additional aspect for this method is that the hardest part of multi-currency cash flow creation (FX Impact) is created via business rule logic. FX Impact is the difference between the Year-to-date USD change and the Year-to-date Activity Change, translated at AVG Rate, in the Cash account. But this same value can be calculated by taking the same calculation on all the other balance sheet accounts other than cash. Clients with FX Impact logic in BPC really enjoy this aspect because then every balance sheet account, by entity and time period, has an FX Impact value and clients can therefore find exactly what accounts and entities are creating a large FX Impact value for cash flow in a given month.
Logic-Driven Method
The logic-driven method is similar to the above two methods except that logic is used as much as possible to drive the cash flow report for just External cash flow or Internal and External purposes. This logic is normally created to run on an entity-level as well as a consolidated basis, which is different than the above two methods which normally are setup only on a consolidated basis. In business rules, the activity of all the balance sheet, income statement, and statistical values are mapped to cash flow accounts in the operating, financing, and investing sections. Logic for FX Impact is also created. Logic is run on a month (which on average takes five minutes to run). Cash Flow Reports by entity are setup to show that cash is explained for every entity to give the client the ability to feel like no data is being missed in the cash flow setup. Finally, a consolidated cash flow report can be put together to show the various sections and allow adjustments to be made for one-time items into a final cash flow.
Implementation
Clients tend to choose one of the methods above based on time, cost, and flexibility needed in cash flow. The first two methods normally take between one to three weeks to implement, whereas the last method can take several more weeks to finalize. Overall, though, cash flow provides a lot of value to be implemented in SAP BPC. For more information regarding any of the cash flow implementation option presented here, please email us at info@sandpointc.com.
