Direct Method- Cash Flow Statement

[chemicala_srimallikarjuna]

Hi Friends,

I would like to develop a cash flow Statement- Direct method. I am aware; this is a cash basis report on three types of financial activities: operating activities, investing activities, and financing activities, with all related items will be captured under each Acitivity.

I am considering the following aspects (in brief) to develop this Statement:

1. Cash flows From Operating Activities: Includes cash received from Customer, Receipts from Government, Payments to suppliers, Payments to vendors.etc.

2. CASH FLOWS FROM INVESTING ACTIVITIES: Includes Proceeds from matured short-term Investments, long-term Investments, Dividends, Interest Received . Etc

3. CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of long-term liabilities, Principal payments of long-term liabilities, obligations etc.

Net cash used in financing activities- (Gain)/loss on foreign exchange = Net decrease in cash and cash equivalents

I got two doubts in achieving this : ( I need to have consolidated cashflow report for r/3 & Non-r/3)

1.Is this correct method to use the Cash Management u2013Treasury Management (TM), to get the cash flow report for individual r/3 Companies, which is used to monitor cash position/payment flows and Liquidity Forecast, where I can configure Planning level ( BSEG-FDLEV) for G/l Accounts ( e.g. related to Bank / cash accounts )/Planning Group ( BSEG-FDGRP) For Subledger accounts ( e.g. Vendor / Customer accounts )

2.Is this right method to capture the activity details like above 1,2,3, like FSI + TType for each of activities, for non r/3 Companies?

Any suggestions on the above will be highly appreciated.

Regards

CSM Reddy

[Former Member · Accepted solution]

Hi Reddy,

At the outset let me tell confess that I have never worked in Cash flow reporting in SAP. But I will just share some of my thoughts.

There is a module within SAP Treasury called Liquidity Planner. This appears under Financial Supply Chain Management -> Cash and Liquidity Management -> Liquidity Planner.

This module is specifically to prepare Cash flow report using the Direct Method.

But as far as I know, you just classify all the transactions in R/3 (cash related transactions like Bank related transactions, FI Transactions, Invoices, others) into various buckets and take them to BI (Business warehouse) and then do the actual reporting in BI.

As I said I am not very familiar with this module but there is a specific book published by SAP Press on this module (Liquidity Planner):

Cash Accounting and Cash Flow Planning with SAP Liquidity Planner

by Stephan Kerber and Dirk Warntje

This might prove useful.

I would be interested in knowing the path you chose.

[chemicala_srimallikarjuna]

Hi Kalyan,

thanks for your suggestions. I am developing this , by doing some configurations the cash management .I will let you know once it is done. I will also check the book you suggested.

Regards

CSM Reddy

[Former Member]

Hi CSM,

We also have a specific requirement on having Cash Flow - Direct method and to have the flows displayed at the income / expense head wise. I know that this would be possible in Liquidity Planner. However, am not able to configure the same.

Were you able to develop the Cash flow, if yes and could you please share the config.

Awaiting your reply.

[Former Member]

To further add to my earlier reply, you can take the cash flow pertaining to non SAP companies into BI and take out a consolidated report.

But as far as SAP companies are concerned you might have some standard report out of Liquidity Planner or may be you can design a report - as the information has already been collated.

[Former Member]

Hi CSM Reddy,

1. If you'll be able to configure the proper financial postions for Cash Flow in the TM - the best option - go for it (it's without any sarcasm, I just do not know if it's possible). -- The worst situation is an adding of the some attributes like FinPosition to the cash related FI documents in order to get this info by manual input.

2. It's also a way out. But, taking into account that on some B/S items (cash ones) you may have already a MoveType, then the transaction type that is going to tell your the type of cash flow item is, IMHO, to be maintained separately, as a new subassignment.

Hope this helps.

[chemicala_srimallikarjuna]

Hi Eugene khusainov,

Thanks for your valuable suggestions. , I will try this CM method -in TM to capture the cash flow movements for Direct Method. Is there going be any cash elimination applied after getting r/3 Cash flow report. My requirement is like this. I need to develop a cash flow report for r/3 companies (around 4) then consolidate this report with non r/3 companies.( around 30). Is there any cash elimination applied during consolidation, as the final cash flow report ison combination of r/3 & non r/3 companies after consolidation? Please advise me on this.

Regards

CSM Reddy

[Former Member]

Hi CSM Reddy,

Of course, there might be I/C cash flows required to be eliminated. First of all, these are intergroup dividends. Then cash flows from interest paid/received, loans, the money paid/get during trading etc.

[chemicala_srimallikarjuna]

Hi Eugene khusainov,

thanks for your inputs , I will get back to forum for any more clarifications/ if I struck in this.

Regards

CSM Reddy