LMPLANNING - Liquidity Planning

Liquidity Planning Parameters

The Planning Calendar

tm5 is a Web-based system, available to all companies 24/7. All plans are available to all users at all times, but only current plans are editable. The planning calendar thus provides the option of organising and actively controlling access to plans as well as to each timeframe.

Reconciliation of all IC Payments

To ensure that incoming payments for one company always match outgoing payments for the other, there is a complete, multilateral, intercompany reconciliation for projected figures built into tm5. Even as the plan is being produced, each company can compare data with every other company and reconcile any differences that occur.

Standardized Planning Categories and Individual Planning Structures

So that any plans can be ultimately consolidated, standardized planning categories have to be defined. Depending on their rights, each user can define the display and grouping of these categories.

Projected Exchange Rates

Different plans require different exchange rate projections. A budget will use different projected rates than the current forecast. By changing exchange rates, additional scenarios can be generated. tm5 provides the option of basing the various plans on any rate scenarios, which correspond to the requirements of the plan concerned.

A Variety of Plans

tm5 allows you to create as many plans as you need. Each plan has its own purpose – budget, forecast, scenario – whatever is needed. The plans can also be compared at any time, in order to illustrate and analyze their differences.

Flexibility in the Presentation

Consolidation

Liquidity planning is done on the basis of each single transaction. Consolidation is simply done by selecting the required consolidation group, either in the corporate currency or in the consolidation group currency, as required.

Currencies

Liquidity planning is done in the transaction currency and can be analyzed in various currencies. This is initially done in the corporate currency, of course, to make the consolidation possible, then in the functional currency used by the respective company, and then in the transaction currency.

Time Frames

The liquidity plan can be presented in any time frames. In addition to the option of displaying liquidity by days, weeks, months, quarters and years, every user can choose individual time frames in order to meet their particular needs.

Data Sources

Manual Entry

tm5 supports a very quick and easy manual option to enter data. Aside from planning individual cash flows, functions are available which make it easier to enter repetitive payments as simply as possible, to analyze them at any time and to then be able to process them either singly or collectively. The same applies for payments related to projects, which can be entered for linear and non-linear cycles.

File Upload

Apart from manual entry, tm5 makes it possible to process values from any other system. Depending upon the quality of possible modifications, these permit the processing of data of varying quality via the interfaces intended for this purpose.   

Actual Figures

The actual figures can easily be integrated into the liquidity planning. Using the cash management module, the statement data can automatically be assigned to the various categories by tm5, and can be imported into the corresponding plan. This is a process that saves a lot of work, especially in group companies, and which also significantly increases the acceptance of tm5 in the entire organization. This function makes the actual values and their analysis available on a daily basis across the entire enterprise and is a fundamental prerequisite for the prompt management of liquidity.

Interest, Currency and Commodity Management Payments

To not have to manually plan interest payments, repayments, foreign exchange or any other cash flows, the integration of the modules in tm5 means that these payments can be directly transferred from TTCONTRACT to the respective planning.

Hedge Accounting under IAS39/FAS133

Hedge accounting under IAS39 requires the planning of payment flows which have been hedged by FX transactions. This is done in the liquidity planning. The planning data and the FX transactions are brought together in TTGL. In the end, tm5 determines the effectiveness and prepares the required accounting records.

Hedges and Funding

Hedges and funding establish a bridge between liquidity planning and interest and currency management. The planned payment flows are compared to the corresponding contract management transactions.

Hedges are concerned with the hedged rate in FX management. By planning in transaction currency, the hedge ratio can be determined on the basis of the comparison with the completed FX transactions.

Funding serves to analyze the refinancing ability. Here, the planned liquidity requirements are compared to the credit lines and their use. The combination of these two parameters results in the liquidity buffer or the liquidity gap.