Online documentation for SAP Corporate Finance Management 1.0 (based on the standard 4.6C documentation).

SAP Corporate Finance Management is based on a series of solutions, whose main task is to analyze and optimize business processes in the financial area of a company.

In an age of global competition and value-oriented management strategies, financial planning plays an increasingly important role in the management of a company. The key aim is to recognize liquidity deficits or surpluses in plenty of time and to identify expected foreign currency positions in the planning period. Recording planning data on a timely basis and adapting it as soon as circumstances change, as well as decentralized processes for capturing data all contribute to the problems facing financial planning activities that aim to indicate future trends.

The Liquidity Planner provides tools for entering and adjusting, aggregating and evaluating planned cash flows, and for determining actual values. Easy-to-use tools provide the decision-makers in a company with all the information they need as and when it is available and this can be used to continue analyzing and optimizing the financial resources. You can therefore use the Liquidity Planner to extend your planning horizon and have a greater active influence on the expected cash flows. This ranges from the classical use of financial budgeting values through to their inclusion in more detailed risk analyses.

The Liquidity Planner is not yet released as of Release CFM 1.0.

The In-House Cash component enables internationally active companies to manage their internal and external payments efficiently. This is achieved by setting up an In-House Cash Center at the group headquarters, which is then used to process all the payments between the individual corporate entities and the external business partners. The In-House Cash Center corresponds to a virtual bank at which the current accounts of the subsidiaries are maintained. This enables you to keep cash resources within the group and optimized how they are applied. At the same time, this means you need fewer external bank accounts and stand to make considerable savings when you process international payments. The In-House Cash solution enables increased flexibility for processing netted payment transactions.

A core task in many finance departments is concluding financial transactions. Depending on the company policy, the emphasis can either be on providing an internal service for the affiliated group companies, or participating actively in the financial markets in order to invest liquid assets, finance planned investment, or hedge existing risks. To do this, the Transaction Manager provides the instruments for processing the related financial transactions from entering them through to transferring the relevant data to Financial Accounting. The system supports both traditional treasury departments that focus on trading and asset management departments. The advantage of this is that you can process all types of transactions on the same platform - from short-term finance to strategic longer-term investments.

Given that the funds available for investment are usually limited, and that there are numerous investment options to choose from, the crucial question for investment policy decisions is how well the investments have actually performed. The Portfolio Analyzer is designed to provide the answers to this question. It measures the exact return on investments, compares the results to prescribed targets, and breaks down the overall performance into its component parts by attributing the individual portfolio positions to the total result. The basis for these evaluations is the portfolio structure, which lets you group investments into different categories. You can run evaluations for portfolios at different levels in the portfolio hierarchy, or for an asset category across several portfolios.

The Portfolio Analyzer is not yet released as of Release CFM 1.0.

Alongside traditional finance management tasks, such as cash management and liquidity assurance, effective market risk management is a decisive factor in securing your company’s competitive position. In this field, the Market Risk Analyzer offers extensive position evaluations, such as mark-to-market valuations of financial transactions. It also includes tools for calculating risk and return figures, including exposure, future values, sensitivities and value at risk. When you run these reports, you can incorporate both contracted positions and fictitious financial transactions in the calculations. The valuations can be based on both real and simulated market prices. Together with a high degree of flexibility for creating reports, the Market Risk Analyzer provides a reliable basis for evaluating market risk controlling.

The Credit Risk Analyzer focuses on measuring, analyzing and controlling counterparty default risk. The first phase aims to cover the specific risks associated with financial transactions in a company. In order to ensure effective controlling for counterparty risks, the Credit Risk Analyzer provides risk controlling using limits and flexible limit management with online monitoring as well as extensive reporting options. As a result, managers will be in a position to identify credit risks as they occur and act accordingly.

SAP Corporate Finance Management is an integrated solution, whose various components are closely linked with each other. The financial transactions managed in the Transaction Manager can be evaluated and monitored using the analyzer components. Besides the connection to the CFM analyzer components, Market Risk Analyzer, Portfolio Analyzer and Credit Risk Analyzer you can also connect the Transaction Manager to Cash Management.

You go to the Customizing for SAP Corporate Finance Management in the SAP Reference IMG by choosing Corporate Finance Management.

The Liquidity Planner and the Portfolio Analyzer are not yet released as of Release CFM 1.0.

With Release CFM 2.0 a ‘Controlled availability’ is planned for the Liquidity Planner and Portfolio Analyzer solutions. This means that they will also not be generally available as of CFM 2.0, but you may be able to implement the solutions by arrangement with SAP.