1.    What is Cash Management?

Cash management is a sub-module of Treasury that may be utilized as a planning tool for cash control and for reliable, up-to-date liquidity analysis of the company.

2.    Name and describe at least two functions of Cash Management.

Bank statements, manual planning, cash position, liquidity forecast

•    Cash concentration = allows companies to maximize their cash pooling strategy with various cash accounts
•    Cash budget management = identifies impending illiquidity or possible budget overshoots and controls payment flows taking account of profitability and liquidity

See others below or in the following chapters.

3.    Describe the differences between Cash  Position and Liquidity Forecast.

Cash position – reproduces the activity in bank accounts, forecasts daily liquidity or cash position in 0-5 days time frame. It receives data on bank accounts and clearing accounts .
The example of data flowing there is
•    Payments from a bank statement and payments from a payment program (FI)
•    Loans, transfers and deposits from TM
•    Manually planned items from CM

Liquidity forecast – reproduces the activity in sub-ledger accounts, projecting cash inflows and outflows in 1-24 weeks time frame. It receives data from AR, AP, FI, MM, SD, TM.
The example of data flowing there is
•    Invoices from FI or MM and SD (including parked documents),
•    Securities related receivables and payables from TM,
•    Down payment requests from FI,
•    Manually planned items from CM, etc.

4.    Define planning levels.

Planning levels explain the origin of the data in Cash management, reflect typical financial transactions (e.g., F0-posting to a bank account in FI, AP-payment advices) and thus enable users to better estimate its reliability

5.    True/False? To be able to use Cash Position and Liquidity Forecast the “CM active” indicator must be selected in the company code global parameters definition.


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