In principle, liquidity planning is carried out with the help of a liquidity plan. This plan compares all expected cash flows - i.e. incoming payments and outgoing payments - for a specific planning period.
A liquidity plan is a forecast. It provides companies with an overview of the planned, future course of cash and account balances. A liquidity plan therefore always provides information about the future development of cash flows.
The liquidity plan is based on data and figures from the company. For example, it contains data from the sales plan, the cost plan, the capital requirements plan or the investment plan.
Actual data available in the system is used for liquidity forecasts and refinement. These are for example purchase orders or sales orders.
The individual planning periods of the liquidity plan consist of time periods such as weeks, months or quarters. The total planning period usually does not exceed twelve months.
In times of scarce liquidity, shorter periods than months or quarters are also possible when drawing up the liquidity plan and planning the periods: in times of crisis, for example, it can make sense to plan on a weekly or, in exceptional cases, even daily basis in order to keep a close eye on liquidity.
Automation and real-time solutions such as SAP Central Finance also offer valuable support in this respect, because the data is available directly and does not have to be aggregated in a time-consuming process.
In principle, liquidity planning under SAP S/4HANA (1909 and on-premise) is part of SAP S/4HANA Finance, or more precisely the (Scope Item Group) Treasury Management component.