October 2008

Volume 6 | Number 9

SAP BI concepts, technology, and best practices

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
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.

Although global and larger organizations are

interested in knowing their consolidated shortterm and long-term cash positions (based on
their operational income statement and capital
planning), its even more important for SAP
NetWeaver BI planning resources to know
these positions. They need to understand how
to implement balance-sheet and cash-flow
planning by using SAP NetWeaver BI functionality. The main objective of building the
balance-sheet planning application is to generate a long-term cash-flow plan. You can use
SAP NetWeaver BI Integrated Planning to
implement a global, integrated planning solution for balance-sheet and cash-flow planning.

>> Key Concept

Balance-sheet and cash-flow planning
using SAP NetWeaver BI Integrated
Planning enable you to look to your
companys financial future, such as key
financial ratios, accounts payable,
accounts receivable, sales projections
and costs, future earnings, and shortterm and long-term cash positions.
These financial projections arent just
for global organizations anymore.

10

How to Create a
Generic Retractor
in Integrated Planning

15

Quick Tip
Avoid the SID Generation
Error While Activating
Data in a DSO

18

SAP NetWeaver BI 7.0

Improve Query
Performance and
Visibility with BI Statistics

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 interest income and expenses for the planning period and seeing how they will affect your future
earnings; determining the cash-flow structure to verify the organizations borrowing and paying
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

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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 transactions, cash balancing evens out the assets
and liabilities and then posts the difference 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, dividends, and re-classifying short-term
payments on long-term debt to current
liabilities.

The Data Model

Since no robust standard content is available 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 multiple scenarios and versions of planning
data

Use the navigational attributes of reporting

instead of including the InfoObjects in an
InfoProvider (for example, region details)

flow planning. This item holds the master

data for all of the different cash-flow
categories.

Include the balance-sheet and cash-flow

planning InfoProvider in SAP SEMBCS to give you multi-provider realtime reporting with actual data

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

Partition the balance-sheet and cashflow planning InfoProvider for faster

performance in the planning application.

In addition to these custom objects, the following 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, forecast, and prior forecast data.

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 consolidated 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): Cashflow accounts are the solution for cash-

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 cashflow planning:
Step 1. Integration with SAP SEM-BCS.
This step extracts the opening balances for
SAP SEM-BCS. First, you need to determine 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 determination rules that map the balance sheet
accounts to the profit and loss accounts. It
also sets up the planning function that calculates the balance sheet amounts to
simulate the double-entry system. Using the
account determination rules, you estimate

From account

To account

Rule January

501010

201020

0.5

Table 1

Example of an account determination rule

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Figure 1 Balance sheet rules

the balances for the balance sheet accounts.

For example, if the fuel expenses (profit
and loss account: 501010) are $10,000 for
the month of January, half of it ($5,000) is
on credit (credit account: 201020), and the
other half ($5,000) is paid in cash, then
the account determination rule is as shown
in Table 1.

DATA FITM TYPE 0CS_ITEM.

DATA TITM TYPE ZCS_ITEM.
DATA XITM TYPE 0CS_ITEM.
DATA YITM TYPE ZCS_ITEM.
DATA RATE TYPE F.
DATA AMT TYPE F.
DATA REG TYPE ZREGION.
DATA RREG TYPE ZREGION.
DATA MADJ TYPE ZFP_BSML.
DATA RMADJ TYPE ZFP_BSML.
DATA SLICE TYPE ZSLICE.
DATA BSDT TYPE ZFP_BSDT.
DATA RFTM TYPE ZCS_ITEM.
FOREACH FITM,TITM,MADJ.
XITM = TITM.
YITM = FITM.
RATE = {ZPL_RATE, FITM, TITM, 200000,MADJ,#}.
IF RATE <> 0.
FOREACH RMADJ, SLICE,BSDT,RFTM IN REFDATA.
AMT = AMT + {0CS_TRN_LC, FITM,RFTM,BSDT,RMADJ,SL
ICE}.
ENDFOR.
{0CS_TRN_LC, XITM, YITM, 200000,MADJ,1} = AMT* RATE.
ENDIF.
AMT = 0.
RATE = 0.

This model uses the Balance Sheet Rules

input-ready report, as shown in Figure 1,
to maintain the account determination
rules using the InfoObjects, the consolidated item (0CS_ITEM) as To Account,
the reference item (ZCS_ITEM) as From
Account, and the ZFP_RATE key figure
to partially or fully allocate this amount to
one or more balance sheet accounts. These
rules map the income statement accounts
to the balance sheet accounts to create
the double-entry system in the planning
environment for credit and accrued transactions. Using this methodology, you can
also allocate the amounts on one balance
sheet to another balance sheet account (e.
g., by reducing the depreciation of the
property, plant, and equipment, and increasing the depreciation reserve section
by the same amount).

ENDFOR.

Figure 2 Code for the planning function

The planning function in Figure 2 reads

the income statement planning information to create the balance sheet amounts

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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 function 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 balancing automatically, but during planning,
you have to manually estimate the accrued
balances based on income statement activity, assuming that the activity used cash.
In other words, you need to balance your
assets and liabilities and then post the difference 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.

Balance your assets and liabilities and

post the difference to cash
Verify whether your minimum cash
requirements are met, and then borrow
if you have a deficit or move cash to
investment accounts if you have an
excess
Calculate your interest expense for
additional loans or your interest income
on any new investments
Calculate your retained earnings and
adjust your balance-sheet planning
Cash balancing is an iterative process. It
needs to run multiple times to equalize the
assets and liabilities on the balance sheet
for all the planning periods. For some
examples of the formula for retained earnings calculation, see Figure 3, which was
created using the formula extension functionality in SAP NetWeaver BI Integrated
Planning.
In addition to the cash-balancing functions, you also need to define the

Account

Reference account

Amount

201020

501010

5000

Table 2

DATA
DATA
DATA
DATA

functions for accounts receivable,

accounts payable, interest, dividends, or
any other specific calculations that your
organization might want to incorporate
into its balance sheet planning. The
formula extension functionality in SAP
NetWeaver BI Integrated Planning is very
flexible, allowing you to create these
kinds of calculations. Figure 4 shows
sample formula code for the calculation of
the accounts receivable amount based on
sales and the days-sales-outstanding
assumptions.
Step 4. Cash-flow rules layout and calculation function. This step finalizes the
cash-flow rules layout and the calculation
functions. Since generating long-term
cash-flow planning is the key reason for
using a balance-sheet planning application, cash-flow planning requires going
through the following stages.
First, you define the relevant master data
for ZCASHITEM, including its hierarchy. ZCASHITEM plays an important
role in building cash-flow planning

Example of posted record with account determination rules function

CSTM TYPE 0CS_ITEM.

BSML TYPE ZFP_BSML.
SUM TYPE F.
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

Cash-balancing involves the following

activities:

Figure 3 Example formulas for retained earnings calculations

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DATA
DATA
DATA
DATA
DATA
DATA
DATA
DATA
DATA
DATA

because it hosts master data for the cash

items required to present cash flow.
Some examples of cash-flow items are
depreciation net profit, property, plant,
and equipment.

CSTM TYPE 0CS_ITEM.

BSDT TYPE ZFP_BSDT.
SUM TYPE F.
FYP TYPE 0FISCPER.
MD TYPE F.
AMT TYPE F.
DSO TYPE F.
BSML TYPE ZFP_BSML.
PER TYPE 0FISCPER3.
PC TYPE 0PROFIT_CTR.

After you create all of the relevant cash

items in master data, you establish the
cash-flow hierarchy, which depicts the
organizations cash-flow structure. Look
at the example of hierarchy with master
data in Figure 5. You can create the hierarchy using transaction RSH1 (edit
hierarchy initial screen) in SAP
NetWeaver BI.

FOREACH FYP.
PER = SUBSTR(FYP,4,3).
IF PER <> 014.
SUM=0.

Next, define the cash-flow rules (Figure

6 on the next page). These rules map the
balance sheet accounts to the cash-flow
items, establishing a relationship between the two. Therefore, changes in a
particular balance sheet item also represent the cash effect on the cash-flow
item to which it is mapped. These cashflow rules are maintained in the system
using the input-ready report shown in
Figure 6. This report is created using
SAP NetWeaver BI Integrated Planning.

FOREACH CSTM,BSDT,BSML,PC.
IF CSTM >= 0000300000 AND CSTM <= 0000303999.
AMT = {0CS_TRN_LC,CSTM,FYP,PC,BSDT,BSML}.
SUM = SUM + AMT.
ENDIF.
ENDFOR.
DSO = {ZPL_RATE,#,FYP,#,100005,#}.
MD = ATRV (0NUMDAY,FYP).
*MESSAGE W001 (/MSG0) WITH SUM FYP MD.
{ZFP_BLNLC,0000121100,FYP,#,#,100010} =((SUM/MD)*DSO*-1).
ENDIF.
ENDFOR.
Figure

Accounts receivable calculation

Then, you create the planning function

to generate the cash-flow amount. This
cash-flow rules function calculates the
cash amount. You can use the formula
extension function in SAP NetWeaver
BI Integrated Planning to generate the
cash flow (Figure 7 on the next page).
This function calculates the change in
the balance sheet account for a particular 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 hierarchy in BEx Query Designer (Figure 8
on page 9). You can create various versions of this report to display the cash
flow by year, month, and quarter.

Figure 5 Cash-flow hierarchy on ZCASHITEM InfoObject

Step 5. Create an integrated application. The final step is to create an

>>continued on page 9

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Figure

DATA
DATA
DATA
DATA
DATA
DATA
DATA
DATA

Cash-flow rules

XITM TYPE 0CS_ITEM.

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

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Figure 8 Cash-flow report

>>continued from page 7

integrated application using the inputready 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, dropdown 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 workbook 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 application (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