Cashflow planning with xP&A

Are you tired of managing separate financial plans for every department across your company? Extended planning and analysis (xP&A) goes much further than traditional financial planning and analysis; it breaks down the barrier between finance and other departments by synchronizing plans across the entire organization. It extends planning and analysis across the enterprise by providing functions such as continuous planning, forecasting, advanced analytics, and performance monitoring. Based on live and accurate data from the SAP Cash Management application you can plan with accelerated deployments for your line of business by extending your planning and analysis processes. xP&A promotes collaboration across your team by creating aligned plans that are tightly integrated with SAP S/4HANA, SAP SuccessFactors solutions, and more through the SAP Analytics Cloud solution.

Some of the benefits of xP&A include:

  • Live, holistic business visibility to understand the impact of decisions on each department
  • Reliable source of data
  • Full business alignment
  • Greater agility

In a traditional business setting, the marketing team creates campaigns and promotions, HR creates future workforce requirements, and supply chain teams create plans for production and inventory in separate processes. All these plans are created in silos, with separate planning tools and different spreadsheets, which leaves room for communication errors. However, Brussels Business Support Agency (hub.brussels) is unifying planning and analysis processes to gain real-time business intelligence for improved decision-making and more flexible planning. “SAP Analytics Cloud enables us to unify planning and analysis processes with ease and empower our users to accelerate decision-making through better insights and more flexible planning,” says Sophie Stefano, a financial analyst and project manager at hub.brussels. After hub.brussels implemented xP&A, it was able to successfully adopt the solution due to extensive change management efforts and training workshops:

  • Empowerment of users, with improved access to project information and weekly plan updates for a better understanding of and faster response to new business requirements
  • More flexibility to proactively think about business opportunities
  • Ability to quickly adopt new financial reporting processes in compliance with legal requirements for public agencies

Cash flow planning manages cash inflows and outflows from your business and detects surplus or shortfalls. Controlling cash flow can help you manage receivables and payables and analyze cash from operating and other business processes. It can also help you create a loan repayment blueprint, which helps to maximize your lender relationship. Cash flow shows the change in cash balances over a period of time. For example, hub.brussels can forecast months ahead to guarantee that it has enough cash on hand to handle day-to-day business expenses and can pay its employees on time. It can detect when there is a surplus or deficit, and it helps hub.brussels to plan accordingly.

Some of the benefits of SAP Cash Management include the ability to:

  • Better optimize receivables and payables
  • Forecast cash from sales and overhead management by having a reliable estimate of working capital every month

With xP&A, you can produce cash flow planning insights from your predictions and use this information to simulate scenarios for better outcomes, which can drive agile decision-making. It allows a simplified and comprehensive planning process by bringing together different departments such as financial, supply chain, and workforce planning. From the outside looking in, businesses may appear profitable but might be having difficulty in managing payments to various stakeholders, such as employees and suppliers. This is because of inadequate cash flow planning. The timing of receipts would not coincide with the timing of payments, so it is crucial to plan cash flows and make provisions to get the shortfalls funded, a process that is made more intuitive with the help of xP&A. In certain businesses, there could be surplus cash that needs to be appropriately utilized. Failing to plan cash flow can cause debt or even close your door for business. Negative cash flow can have a domino effect on your business. With constant change being a new industry standard, xP&A helps companies become more agile and adaptable across the organization and provides cash flow planning insights that help set companies in the right financial direction.

Learn more about starting your xP&A process today with SAP.

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