October 2008

SAP BI concepts, technology, and best practices Volume 6 | Number 9

Balance-Sheet and Cash-Flow

Planning with SAP NetWeaver BI
by Rajasekhar Gummapadu, Manager, Deloitte Consulting LLP
>>inside
Balance-sheet and cash-flow planning helps you get your cash picture under control. Learn how to
How to Create a
design a solid, flexible SAP NetWeaver BI data model for balance-sheet planning. Examine the five key
steps required to create balance-sheet planning and cash-flow planning.
10 Generic Retractor
in Integrated Planning

Although global and larger organizations are >> Key Concept Quick Tip

15
interested in knowing their consolidated short-
Balance-sheet and cash-flow planning Avoid the SID Generation
term and long-term cash positions (based on
using SAP NetWeaver BI Integrated Error While Activating
their operational income statement and capital
Planning enable you to look to your Data in a DSO
planning), its even more important for SAP
NetWeaver BI planning resources to know companys financial future, such as key SAP NetWeaver BI 7.0

these positions. They need to understand how
to implement balance-sheet and cash-flow
planning by using SAP NetWeaver BI func-
tionality. The main objective of building the
balance-sheet planning application is to gener-
ate a long-term cash-flow plan. You can use
SAP NetWeaver BI Integrated Planning to
implement a global, integrated planning solu-
tion for balance-sheet and cash-flow planning.
18
financial ratios, accounts payable,
Improve Query
accounts receivable, sales projections
Performance and
and costs, future earnings, and short-
Visibility with BI Statistics
term and long-term cash positions.
These financial projections arent just
for global organizations anymore.

Its common to implement income statement planning to monitor operational efficiency and to
project an organizations future earnings. However, in todays global and more competitive
business environment, you also need to know the effect that this operational plan will have on
future balance sheet items and cash flow.

Why would you want to implement balance-sheet and cash-flow planning? For any of a variety
of reasons including: projecting your key financial ratios; estimating your accounts payable and
accounts receivable positions based on sales projections and cost of sales; estimating the inter- search
the online knowledgebase
est income and expenses for the planning period and seeing how they will affect your future www.BI-expertOnline.com
earnings; determining the cash-flow structure to verify the organizations borrowing and paying or www.SAPexperts.com

capability; effectively managing your cash; maximizing the returns on your short-term cash
investments; and effectively managing your balance sheet.

These benefits arent free, however. You must meet some business and technical challenges to
achieve this implementation. The biggest challenge is simulating the double-entry system in the

>>continued on page 4
 >>continued from cover
planning solution. Transaction processing
in SAP Financial Accounting (FI) and
SAP Strategic Enterprise Management
Business Consolidation (SAP SEM-BCS)
uses the double-entry method when
posting journal entries. Income statement
planning uses the single-entry concept.
For example, to increase the expense
amount, you adjust the amount for any
expense account without specifying
whether to pay that expense increase in
cash or credit.
Another challenge is creating an iterative
balancing functionality to calculate the
balance sheet assets and liabilities. Like
account determination rules that handle
the double-entry system for credit transac-
tions, cash balancing evens out the assets
and liabilities and then posts the differ-
ence to the cash account, assuming that all
other transactions are cash.
Other challenges include the assumptions
used to calculate accounts payable and
accounts receivable, a complex payment
structure for the interest payment on each
debt instrument, and the establishment of
other calculations, such as interest, divi-
dends, and re-classifying short-term
payments on long-term debt to current
liabilities.
The Data Model
Since no robust standard content is avail-
able for balance-sheet and cash-flow
planning, its important to design a solid,
flexible, SAP NetWeaver BI data model
for balance-sheet planning. Here are some
things for you to consider while designing
the data model:
Align the data model with the SAP
SEM-BCS data model for real-time
reporting
Include objects such as version (0BCS_
VERSION) and the reporting value
type (0VTYPE) for flexibility in multi-
ple scenarios and versions of planning
data
2008 BI EXPERT Reproduction prohibited. All rights reserved.
Use the navigational attributes of reporting
instead of including the InfoObjects in an
InfoProvider (for example, region details)
Include the balance-sheet and cash-flow
planning InfoProvider in SAP SEM-
BCS to give you multi-provider real-
time reporting with actual data
Partition the balance-sheet and cash-
flow planning InfoProvider for faster
performance in the planning application.
To achieve the functionality you need, you
must create a real-time InfoProvider to
host the data for balance-sheet-planning
and cash-flow planning. Depending on
your requirements, you might also need to
create some custom InfoObjects, such as
ZFP_BSML and ZCS_ITEM. Since
these objects wont be available in the
source systems, you must maintain master
data for them in the SAP NetWeaver BI
system. The following points further
explain the custom objects used in the
model:
Balance sheet manual line items (ZFP_
BSML): In balance-sheet planning, you
need to plan one level below the con-
solidated item (0CS_ITEM) so you can
set up multiple lines for each account
Reference consolidated item (ZCS_
ITEM): This InfoObject establishes the
account determination rules that map
income statement accounts to balance
sheet accounts
Timing fiscal year/period (ZFP_
CTFIP): This is the InfoObject that is
the reference for the fiscal year/period
(0FISCPER). You use it to establish
timing rules for paying accrued interest
on departmental instruments.
Cash-flow item (ZCASHITEM): Cash-
flow accounts are the solution for cash-
From account To account
501010 201020
Table 1 Example of an account determination rule
flow planning. This item holds the master
data for all of the different cash-flow
categories.
Planning rates (ZFP_RATE): This is the
key figure that is used to maintain such
planning rates as interest rates, swap rates,
and account determination multipliers
In addition to these custom objects, the fol-
lowing InfoObjects can be helpful:
ZPLANYEAR provides the capability to
plan multiple years; ZROUND lets you
create scenario capability; and 0VERSION
enables you to keep track of budget, fore-
cast, and prior forecast data.
The Five Key Steps
Now that youre aware of the data model,
I will go over the five key steps required
to create balance-sheet planning and cash-
flow planning:
Step 1. Integration with SAP SEM-BCS.
This step extracts the opening balances for
SAP SEM-BCS. First, you need to deter-
mine the integration existing between the
balance-sheet planning application and SAP
SEM-BCS to get your opening balances. I
recommend that you physically move your
opening balances to the balance-sheet and
cash-flow planning InfoProvider because
you use them extensively in the functions
that help you enhance performance. To do
this, you create a simple copy-planning
function in the Planning Modeler of SAP
NetWeaver BI Integrated Planning.
Step 2. Account determination rules.
This step finalizes the account determina-
tion rules that map the balance sheet
accounts to the profit and loss accounts. It
also sets up the planning function that cal-
culates the balance sheet amounts to
simulate the double-entry system. Using the
account determination rules, you estimate
Rule January
0.5
 October 2008 www.SAPexperts.com

Figure 1 Balance sheet rules

the balances for the balance sheet accounts.

DATA FITM TYPE 0CS_ITEM. For example, if the fuel expenses (profit
DATA TITM TYPE ZCS_ITEM. and loss account: 501010) are $10,000 for
DATA XITM TYPE 0CS_ITEM. the month of January, half of it ($5,000) is
DATA YITM TYPE ZCS_ITEM. on credit (credit account: 201020), and the
DATA RATE TYPE F. other half ($5,000) is paid in cash, then
DATA AMT TYPE F. the account determination rule is as shown
DATA REG TYPE ZREGION. in Table 1.
DATA RREG TYPE ZREGION. This model uses the Balance Sheet Rules
DATA MADJ TYPE ZFP_BSML. input-ready report, as shown in Figure 1,
DATA RMADJ TYPE ZFP_BSML. to maintain the account determination
DATA SLICE TYPE ZSLICE. rules using the InfoObjects, the consoli-
DATA BSDT TYPE ZFP_BSDT. dated item (0CS_ITEM) as To Account,
DATA RFTM TYPE ZCS_ITEM. the reference item (ZCS_ITEM) as From
Account, and the ZFP_RATE key figure
FOREACH FITM,TITM,MADJ. to partially or fully allocate this amount to
XITM = TITM. one or more balance sheet accounts. These
YITM = FITM. rules map the income statement accounts
RATE = {ZPL_RATE, FITM, TITM, 200000,MADJ,#}. to the balance sheet accounts to create
IF RATE <> 0. the double-entry system in the planning
FOREACH RMADJ, SLICE,BSDT,RFTM IN REFDATA. environment for credit and accrued trans-
AMT = AMT + {0CS_TRN_LC, FITM,RFTM,BSDT,RMADJ,SL actions. Using this methodology, you can
ICE}. also allocate the amounts on one balance
ENDFOR. sheet to another balance sheet account (e.
{0CS_TRN_LC, XITM, YITM, 200000,MADJ,1} = AMT* RATE. g., by reducing the depreciation of the
ENDIF. property, plant, and equipment, and in-
AMT = 0. creasing the depreciation reserve section
RATE = 0. by the same amount).
ENDFOR.
The planning function in Figure 2 reads
the income statement planning informa-
Figure 2 Code for the planning function
tion to create the balance sheet amounts

For group rates on electronic access, call 1-781-751-8799 5

based on the account determination rules.
You create this planning function using
the formula extension functionality in
SAP NetWeaver BI Integrated Planning.
In the example in Table 1, the rule func-
tion reads the profit and loss account
information for account 501010, which is
$10,000, and multiplies it by 0.5 from the
rule number for January. Then, the rule
function posts the calculated amount to
balance sheet account 201020. An
example of a posted record is shown in
Table 2.
Step 3. Establish cash balancing. This
step finalizes the planning calculations for
interest, dividends, accounts receivable,
accounts payable, and the cash-balancing
functions. The basic accounting rule
for the balance sheet is that assets and
liabilities must balance. You can set up
transaction systems to perform this bal-
ancing automatically, but during planning,
you have to manually estimate the accrued
balances based on income statement activ-
ity, assuming that the activity used cash.
In other words, you need to balance your
assets and liabilities and then post the dif-
ference to the cash account.
For example, in the account determination
rule section, the balance of $5,000 paid in
cash creates the difference between the
assets and the liabilities on the balance
sheet. When the cash-balancing function
executes, it makes the adjustment in the
cash account.
However, in most complex organizations
its not that simple because cash balances
have many restrictions. For example, if you
assume that an organization wants to have a
minimum cash balance of $5 million on
hand at all times and its cash balance goes
below this amount, you need to borrow
from credit lines. Conversely, if the
company accumlates excessive cash beyond
$5 million, then the system should invest
that cash in high interest-yielding sources.
Cash-balancing involves the following
activities:
2008 BI EXPERT Reproduction prohibited. All rights reserved.
Balance your assets and liabilities and functions for accounts receivable,
post the difference to cash accounts payable, interest, dividends, or
any other specific calculations that your
Verify whether your minimum cash organization might want to incorporate
requirements are met, and then borrow into its balance sheet planning. The
if you have a deficit or move cash to formula extension functionality in SAP
investment accounts if you have an NetWeaver BI Integrated Planning is very
excess flexible, allowing you to create these
kinds of calculations. Figure 4 shows
Calculate your interest expense for
sample formula code for the calculation of
additional loans or your interest income
the accounts receivable amount based on
on any new investments
sales and the days-sales-outstanding
Calculate your retained earnings and assumptions.
adjust your balance-sheet planning
Step 4. Cash-flow rules layout and cal-
culation function. This step finalizes the
Cash balancing is an iterative process. It
cash-flow rules layout and the calculation
needs to run multiple times to equalize the
functions. Since generating long-term
assets and liabilities on the balance sheet
cash-flow planning is the key reason for
for all the planning periods. For some
using a balance-sheet planning applica-
examples of the formula for retained earn-
tion, cash-flow planning requires going
ings calculation, see Figure 3, which was
through the following stages.
created using the formula extension func-
tionality in SAP NetWeaver BI Integrated
First, you define the relevant master data
Planning.
for ZCASHITEM, including its hierar-
In addition to the cash-balancing func- chy. ZCASHITEM plays an important
tions, you also need to define the role in building cash-flow planning
Account Reference account Amount
201020 501010 5000
Table 2 Example of posted record with account determination rules function
DATA CSTM TYPE 0CS_ITEM.
DATA BSML TYPE ZFP_BSML.
DATA SUM TYPE F.
DATA SUM1 TYPE F. FOREACH
CSTM,BSML.
SUM={0CS_TRN_LC,CSTM,BSML}.
IF CSTM >= 0000300000 AND CSTM <= 0000899999.
SUM1=SUM1+SUM.
ENDIF.
ENDFOR.
{0CS_TRN_LC,0000251200,100009}=SUM1
Figure 3 Example formulas for retained earnings calculations
 October 2008 www.SAPexperts.com

because it hosts master data for the cash

DATA CSTM TYPE 0CS_ITEM. items required to present cash flow.
DATA BSDT TYPE ZFP_BSDT.
Some examples of cash-flow items are
DATA SUM TYPE F.
DATA FYP TYPE 0FISCPER. depreciation net profit, property, plant,
DATA MD TYPE F. and equipment.
DATA AMT TYPE F.
DATA DSO TYPE F. After you create all of the relevant cash
DATA BSML TYPE ZFP_BSML. items in master data, you establish the
DATA PER TYPE 0FISCPER3.
cash-flow hierarchy, which depicts the
DATA PC TYPE 0PROFIT_CTR.
organizations cash-flow structure. Look
at the example of hierarchy with master
FOREACH FYP. data in Figure 5. You can create the hier-
archy using transaction RSH1 (edit
PER = SUBSTR(FYP,4,3).
hierarchy initial screen) in SAP
IF PER <> 014. NetWeaver BI.

SUM=0. Next, define the cash-flow rules (Figure

6 on the next page). These rules map the
FOREACH CSTM,BSDT,BSML,PC.
balance sheet accounts to the cash-flow
IF CSTM >= 0000300000 AND CSTM <= 0000303999. items, establishing a relationship be-
tween the two. Therefore, changes in a
AMT = {0CS_TRN_LC,CSTM,FYP,PC,BSDT,BSML}. particular balance sheet item also repre-
sent the cash effect on the cash-flow
SUM = SUM + AMT.
item to which it is mapped. These cash-
ENDIF. flow rules are maintained in the system
using the input-ready report shown in
ENDFOR. Figure 6. This report is created using
DSO = {ZPL_RATE,#,FYP,#,100005,#}.
SAP NetWeaver BI Integrated Planning.
MD = ATRV (0NUMDAY,FYP).
Then, you create the planning function
*MESSAGE W001 (/MSG0) WITH SUM FYP MD. to generate the cash-flow amount. This
cash-flow rules function calculates the
{ZFP_BLNLC,0000121100,FYP,#,#,100010} =((SUM/MD)*DSO*-1).
cash amount. You can use the formula
ENDIF. extension function in SAP NetWeaver
BI Integrated Planning to generate the
ENDFOR. cash flow (Figure 7 on the next page).
Figure Accounts receivable calculation This function calculates the change in
the balance sheet account for a particu-
lar fiscal year period and then posts it to
the cash item to which it is mapped.

Next, you need to build the cash-flow

report to present the cash flow. The
cash-flow report is created using
ZCASHITEM and the cash-flow hierar-
chy in BEx Query Designer (Figure 8
on page 9). You can create various ver-
sions of this report to display the cash
flow by year, month, and quarter.

Step 5. Create an integrated applica-

Figure 5 Cash-flow hierarchy on ZCASHITEM InfoObject
tion. The final step is to create an
>>continued on page 9

For group rates on electronic access, call 1-781-751-8799

Figure Cash-flow rules

DATA XITM TYPE 0CS_ITEM.

DATA CITM TYPE ZCASHITEM.
DATA RATE TYPE F.
DATA AMT TYPE F.
DATA MADJ TYPE ZFP_BSML.
DATA SLICE TYPE ZSLICE.
DATA BSDT TYPE ZFP_BSDT.
DATA MADJ1 TYPE ZFP_BSML.

FOREACH FITM, CITM, MADJ.

RATE = {ZPL_RATE, FITM, CITM, 999997,MADJ,#}.

IF RATE <> 0.

IF MADJ <> #.

FOREACH SLICE,BSDT IN REFDATA.

AMT = AMT + {0CS_TRN_LC, FITM,#,BSDT,MADJ,SLICE}.

ENDFOR.

{0CS_TRN_LC, FITM, CITM, 999997,MADJ,1} = AMT* RATE * -1.

AMT = 0.

ENDIF.

RATE = 0.

ENDFOR.

Figure Cash-flow amount calculation planning function

8 2008 BI EXPERT Reproduction prohibited. All rights reserved.

 October 2008 www.SAPexperts.com

Figure 8 Cash-flow report

>>continued from page 7

integrated application using the input-
ready report-planning functions that I
discussed in the earlier steps. SAP
NetWeaver BI Integrated Planning has
two ways of putting together the planning
application: a Microsoft Excel-based
application using BEx Analyzer, or a
Web application using the BEx Web
Application Designer. As you saw in
Figures 1, 6, and 8, you can use various
standard Web items such as tab pages, drop-
down boxes, and button groups in BEx
Web Application Designer to create the
Web-based application following
the requirements of your user group
and business logic. You use the work-
book functionality in BEx Analyzer to
create the Excel-based planning
applications. You can integrate these
applications with SAP NetWeaver Portal
to provide role-based access to the
users. It is very important to consider
the users requirements and skill sets
before you decide which type of appli-
cation (Excel- or Web-based) is right
for your balance-sheet and cash-flow
planning system. n

Rajasekhar Gummapadu is an SAP practitioner with more than eight years of cross-functional experience, more than half of which
is focused in SAP implementation. He has strong technology and functional experience with SAP ERP solutions in the area of
Business Planning and Simulation (BPS), SAP NetWeaver BI, SAP NetWeaver BI Integrated Planning, Business Consolidation
(SAP SEM-BCS), Business Planning and Consolidation (SAP BPC) and FI/CO. Raj serves as the functional and technical lead in
the area of financial planning and reporting-related implementations. He has successfully completed multiple implementations as
project manager by using his knowledge to bridge the gaps between the business and IT goals. Raj is a qualified Chartered
Accountant (India) and a Certified Public Accountant (USA). You may contact him via email at raj_g@techwavenet.com.

For group rates on electronic access, call 1-781-751-8799