From Visibility to Value: Rethinking Working Capital Management with SAP S/4HANA

Anjana Parwal-Somani

Many organizations have the data they need to manage cash, but not the visibility to act on it. We explore how SAP S/4HANA helps finance teams turn fragmented information into real-time insight — and unlock liquidity across the business.

Fragmented systems, manual reconciliations, and delayed reporting make it difficult for finance teams to see the full picture of their liquidity. As a result, valuable cash remains tied up in receivables, payables, or inventory — limiting flexibility and slowing growth.

Recording and tracking working capital solutions within the ERP system ensures transparency, auditability, and control over liquidity. Clear records of financing activities enable better cash flow monitoring, compliance, and financial reporting, while supporting informed decisions and stakeholder trust.

With SAP S/4HANA, organizations can turn visibility into action. By bringing financial, operational, and supply chain data onto a single digital platform, S/4HANA delivers real-time insight into how cash moves through the business. Finance and treasury teams gain the clarity to forecast more accurately, act faster, and unlock liquidity that was once tied up in day-to-day operations. The result is stronger cash flow, lower funding costs, and a more agile, financially resilient organization.

How ECC handled working capital management processes

In ECC, recording working capital management functions relied on limited solutions such as the “Pledging Indicator” in Accounts Receivable, which offered tracking but little automation. This often led to manual workarounds and reduced transparency. The Contract Accounts Receivable and Payable (FI-CA) module offered a factoring solution to sell approved receivables to a factor bank with full accounting integration and automated postings for transfers, payments, and settlements. However, its use was largely restricted to industries such as insurance with high-volume customer billing. SAP S/4HANA changes that by embedding working capital processes directly into the digital core — enabling real-time liquidity visibility, automated settlements, and integrated accounting for financing activities.

Solution options in S/4HANA

Optimizing Working Capital with SAP S/4HANA empowers organizations to strengthen liquidity, reduce funding costs, and enhance operational agility through an integrated digital core. Built on the SAP HANA in-memory platform, it delivers real-time visibility, predictive insights, and automation across financial and operational processes that directly influence working capital performance.

S/4HANA Settlements Management is one such solution that brings together a wide range of financial and commercial settlement processes to streamline how organizations manage payables, receivables, rebates, commissions, and cost allocations. Its functionalities—covering financial settlements, rebates, commissions, freight and cost allocations, factoring, intercompany charges, and chargebacks—come together in one unified system that reduces scattered processes and cuts down manual work across departments. Integration with Accounts Receivable, Accounts Payable, and Treasury enables real-time insight into financial exposure, helping finance teams make informed decisions on funding and liquidity. By consolidating transactions, automating complex calculations, and enabling transparent, rules-based settlements, the solution accelerates cash cycles, improves forecasting accuracy, and enhances liquidity. Among its many capabilities, the factoring functionality is significantly enhanced in S/4HANA compared to ECC, offering a far more integrated and automated approach to managing receivables financing.

Factoring in SAP S/4HANA Settlements Management: An integrated approach

S/4HANA provides an enhanced factoring solution within Settlements Management (for private cloud), that allows organizations to manage factoring agreements with banks in a structured, automated, and auditable way. It brings transparency to the end-to-end process while improving liquidity on short notice. Below steps highlight the overall process under Factoring solution:

SAP’s future innovation strategy for working capital management focuses on delivering integrated solutions like SAP Taulia Working Capital Management which is an embedded solution within SAP’s Treasury and Working Capital portfolio that helps buyers and suppliers optimize cash flow across payables, receivables, and inventory. Built into SAP ERP and Business Network, it enables seamless integration, real-time insights, and scalable liquidity management to unlock cash, reduce costs, and strengthen supplier relationships. Taulia-based factoring capabilities are offered since 2508 for S/4HANA Private and Public Cloud customers.

Building on these operational capabilities, SAP also enables organizations to gain deeper analytical visibility across the entire working capital cycle. To support this, SAP offers Working Capital Insights — a pre-built intelligent application in SAP Business Data Cloud that consolidates data from receivables, payables, inventory, and cash to deliver unified working-capital KPIs, trends, and forecasts. It gives finance teams rapid visibility, liquidity insights, and actionable optimization opportunities with minimal setup.

Choosing the right Working Capital Solution: Drivers for selecting the appropriate option

When comparing different solution options for working capital optimization, the key difference lies in managing financing relationships and the automation that is provided out of the box. Settlements Management provides the customer with a toolset to configure the handling of predefined finance providers, making it suitable for organizations with stable funding arrangements and long-term partners. In contrast, Taulia offers a fully embedded digital marketplace that connects businesses with multiple funders through one platform, enabling flexible, transparent, and competitive financing. This makes it ideal for organizations seeking dynamic or global funding options. For any new S/4HANA Private or Public Cloud customer, selected entitlements from Taulia are included as part of the ERP entitlements at no additional subscription cost. These cover key capabilities such as Factoring, Virtual Cards and Dynamic Discounting. However, organizations that need broader or more advanced Taulia capabilities can unlock the full feature set by opting for the premium version.

Beyond cost and system integration, the choice between the two solutions should be guided by business drivers, such as:

Business Driver	Considerations
Stability of existing funding arrangements	Assess if current financing options are stable and already meet liquidity goals.
Choice of funders and financing structures	Evaluate the need for flexibility and visibility in selecting funders or dynamic funding models.
Cash Conversion Cycle (CCC)	Review the organization’s CCC and determine if further optimization is required.
Agility to external pressures	Assess how quickly the organization needs to adapt to market or liquidity changes.
Supplier and buyer onboarding and adoption	Evaluate how easily suppliers and buyers can be onboarded to the chosen platform.
Implementation complexity and time	Compare expected implementation effort, timelines, and traceability features.
Scalability and geographic reach	Determine if the solution supports multi-country operations and varying business volumes.
Integration with existing SAP landscape	Assess how well the solution fits within the current SAP environment and data flows.

Ultimately, the decision should align with the organization’s strategic liquidity objectives, operational maturity, and supplier ecosystem, ensuring that the selected platform not only optimizes working capital but also enhances transparency and control.

From Insight to Action: Guiding Your Working Capital Strategy with expertise

Choosing the right working capital solution is not just a technical decision — it’s a strategic one. Turning insights into action requires time, focus, and a clear understanding of both business and treasury priorities. Many organizations find it challenging to balance day-to-day operations with the strategic effort needed to evaluate and implement the right solution.

We supporst organizations in navigating this complexity by combining deep treasury expertise with in-depth SAP knowledge. Our consultants take an objective and structured approach; assessing business drivers, current processes, and operational requirements to identify the solution that best aligns with your strategic goals. Beyond technical evaluation, Zanders acts as a strategic partner, ensuring that your chosen solution supports broader liquidity, financing, and operational objectives.