Uncovering the dark art of SAP Treasury

3 August 2011

Mark Chalfen

Mark Chalfen

Former SAP S/4HANA Global Lead

To some the Treasury team within a Finance department are seen as a discreet service. Large Organisations have many legal entities using a variety of different currencies spanning various bank accounts and the Treasury team need to ensure the processes of cash moving in and out of these accounts and currencies are performed in an efficient way. Where an Organisation uses SAP to manage its Financial processes it would make sense for the Treasury module to be utilised as well, however this is not the case. This blog will look to the reasons why that decision might have been made and validate them against SAP's current solutions and the core objectives of the Treasury team.

What are the core objectives for a Treasury team?

I believe there are three core objectives for a Treasury Team. They could be migrated to other Finance teams, however I believe they are critical to ensure a well run Treasury process.

  • Accuracy of data
  • Make better decisions
  • Improve process

Accuracy of data:

I believe this is the area that is the perceived Achilles heel of past SAP Treasury solutions. Within Finance all of the core sub ledger postings are recorded in SAP. All Accounts Receivable Open Items have a due date, and the same can be said for Accounts Payable Open Items. The Cash Management tool within SAP Treasury can be used to provide short terms cash positions and forecasts. However the reasons I believe it is not widely used, is that the reports with ERP as seen as clunky and not user friendly. Further to this, the reports show a position per Company Code, where some Organisations would like this to achieve a lower level such as Profit Center. One thing that cannot be argued is the fact that the data is within the SAP Financial modules, the perceived issue is that the ease of getting the data out in a simple fashion is not achievable.

If we look at the position today, the Cash Management tool can now be run at lower Organisational levels and works very well with Companies that have implemented the document splitting process within the new GL, to achieve Profit Center level reports, after activating functionality within Enhancement Package 5. The reporting with ERP 6 is not great, however BI and Business Objects can be used to create more user friendly reports.

Make better decisions:

The core business process is to ensure the correct level of cash is available in the correct bank account. This will be complicated by Organisations having to work with a range of currencies and bank accounts. Further to this, not all "House Banks" will be with the same provider, so the sweeping function that most providers offer needs to be performed for the group. The easiest way to make better decisions is to have accurate data provided in a timely manner. Sub ledger processes need to be reviewed to ensure that large movements are known in advance. An example could be the Accounts Payable department ensuring all supplier invoices are entered and approved 15 days prior to payment (where possible). Where this process is performed well the Treasury team will be able to forecast the short term outgoing cash leading to the Treasury team ensuring the correct cash is available to make these payments. However, if the process is not followed and supplier invoices are entered on the same day as the payment run, the Treasury team will not be aware of the extra outgoing cash, leading to bank accounts being short of available cash which in turn will result in overdraft and interest costs.

The Treasury team will also need to ensure that it has bought the correct value of foreign currency based on future outlay. Treasury teams will plan when to purchase foreign currency based on known commitments. Where a Purchase Order is raised for a large amount in a foreign currency, the Treasury team will purchase the foreign currency to be available on an agreed date. The Treasury team need to be made aware of high value Foreign currency spend to protect the Organisation against currency fluctuations.

Improve its processes

The Treasury team is a fairly reactive team in terms of process. It is reliant on other teams to perform their tasks in an efficient manner and receipt of accurate data. Once both of these have been achieved the Treasury team need to ensure that they use the data provided to perform its day to day activities.

The Treasury module within SAP should be used as a tool to achieve this. Data should be generated in SAP and reporting should be automated, so manual processing should be removed. Where Organisations do not currently use SAP Treasury they will either use a 3rd party tool which will require interfacing with the core SAP Finance modules, or downloading key data into Spreadsheets and doing short term cash forecasts there. Moving a process away from core SAP Finance will lead to a sub industry of 3rd party systems, reports and processing, or offline spreadsheets that need volumes of effort to feed them and the data is not real time.


The Treasury team is very similar to that of the other Finance teams. They need to work in the same way and to achieve this use a common platform, in this case SAP Treasury, will make their day to day activities easier and more efficient. Whilst SAP Treasury might not have been considered a good fit during an implementation, recent changes along with wider use of SAP BI will provide the benefit that you could be looking for.

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About the author

Mark Chalfen

Former SAP S/4HANA Global Lead

Mark tells it straight - as an ex-boxer, what else would you expect?  Both his knowledge and experience of SAP products allow him to cut to the chase dispelling myths and hearsay.

As a result of working closely with various SAP Finance Product Management teams on product development, Mark understands these products inside out. This depth of understanding has led to him become a ‘thought leader’ in his field; after all, it is not often SAP consultants have helped shape and develop the very product they are selling.

Having such a strong relationship with SAP alongside being an SAP Mentor and Moderator means that Mark has an extensive network within SAP. For clients, this relationship proves to be a huge advantage and leads to configuration issues being resolved rapidly.

Mark has worked on short proof of concepts through to year-long multi-million pound global roll-outs. However, no matter how large or small the project, the true value Mark brings to his work is in the guidance he provides to senior stakeholders. In essence, he assists them to implement more effective processes and drive better behaviours within their finance teams.

Helping organisations transform their business with SAP S/4HANA is Mark’s current focus. The benefits of S/4HANA are numerous, including the simplification of tasks, embedded analytics and improved user engagement. Whilst the eventual move from SAP Business Suite into S/4HANA is inevitable, the journey to it is not always clear. Mark’s ability to understand an organisation’s needs coupled with his deep understanding of S/4HANA provides clarity and eases their transition.

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