Top SAP FSCM (Financial Supply Chain Management) Interview Questions and Answers-(2024)

1 .

What is SAP Financial Supply Chain Management (FSCM)?

SAP FSCM (Financial Supply Chain Management) is a group of applications that can optimizes process of order to cash cycle of an organizaton. The applications are modular in design that enables to configure and deploy individual components to meet requirements.

2 .

Explain some SAP FSCM (Financial Supply Chain Management) components.

SAP Financial Supply Chain Management (FIN-FSCM) optimizes the financial and information flows within a company and between business partners. SAP Financial Supply Chain Management contains the following components :

* SAP Treasury and Risk Management (FIN-FSCM-TRM)

* SAP Biller Direct (FIN-FSCM-BD)

* SAP Cash and Liquidity Management (FIN-FSCM-CLM)

* SAP Collections Management (FIN-FSCM-COL)

* SAP Credit Management (FIN-FSCM-CR)

* SAP Dispute Management (FIN-FSCM-DM)

* SAP In-House Cash (FIN-FSCM-IHC)

3 .

What is SAP Treasury and Risk Management (TRM)?

SAP Treasury and Risk Management is a series of solutions that are geared towards analyzing and optimizing business processes in the finance area of a company.

Transaction Manager : A core task in many finance departments is concluding financial transactions. Depending on the company policy, the emphasis can either be on providing an internal service for the affiliated group companies, or participating actively in the financial markets in order to invest liquid assets, finance planned investment, or hedge existing risks. The Transaction Manager provides the instruments for processing the related financial transactions, from deal capture through to transferring the relevant data to Financial Accounting. The system supports both traditional treasury departments that focus on trading as well as asset management departments. This enables you to use the same platform for various types of transaction - from short-term finance to longer-term strategic investments.

Market Risk Analyzer : Alongside traditional finance management tasks, such as cash management and liquidity assurance, effective market risk management is a decisive factor in securing your company’s competitive position. In this field, the Market Risk Analyzer offers extensive position evaluations, such as mark-to-market valuations of financial transactions. It also includes tools for calculating risk and return figures, including exposure, future values, sensitivities and value at risk. When you run these reports, you can incorporate both contracted positions and fictitious financial transactions in the calculations.

Credit Risk Analyzer : The Credit Risk Analyzer focuses on measuring, analyzing and controlling counterparty default risk. The first phase aims to cover the specific risks associated with financial transactions in a company. The Credit Risk Analyzer enables you to control risks actively by setting limits.

Integration : SAP Treasury and Risk Management is an integrated solution, in which the various components are closely linked. The financial transactions managed in the Transaction Manager can be evaluated and monitored using the analyzer components. In addition to the TRM analyzer components Market Risk Analyzer , Portfolio Analyzer, and Credit Risk Analyzer , the Transaction Manager is also linked to SAP Cash Management .

4 .

What is SAP Biller Direct?

Application for electronic issue of bills and payment, as part of electronic payment processing, Electronic Bill Presentment and Payment (EBPP) supports you in presenting bills in the Web, and offers your customers the option of paying their bills online.

* Release credit cards

* Edit payment methods

* Set account determination for credit cards

* Assign text id

* Define partial payment and currency

* Define payment block for release process

* Define reference user

5 .

What is SAP Cash and Liquidity Management (FIN-FSCM-CLM)?

SAP Cash and Liquidity Management is a subcomponent of SAP Financial Supply Chain Management.

SAP Cash Management : SAP Cash Management is used to monitor cash flows and to ensure that you have sufficient liquidity to cover your payment obligations.

Integration :

SAP Cash Management is a subcomponent of SAP Financial Supply Chain Management.

SAP Cash Management is integrated with a range of other SAP components. For example, the liquidity forecast - in a medium to long term liquidity trend - integrates expected incoming and outgoing payments in financial accounting, purchase and sales.

SAP Liquidity Planner : The Liquidity Planner provides tools for entering and adjusting, aggregating and evaluating planned cash flows, and for determining actual values. Easy-to-use tools provide the decision-makers with all the information they need, as and when it is available. With this information, they have a clearer picture of the financial situation and can optimize the use of their financial resources. You can therefore use the Liquidity Planner to extend your planning horizon and have a greater active influence on the expected cash flows. This ranges from the classical use of financial budgeting values through to their inclusion in more detailed risk analyses.

Integration :

SAP Liquidity Planner is a subcomponent of SAP Financial Supply Chain Management.

6 .

What are the SAP Cash Management Features?

The Incomings area covers the following topics :

* Electronic and manual bank statements

* Payments

* Lockbox

* Polling

* Electronic and manual check deposits

* Bill of exchange presentation

* Memo record

Compare payment advices, Interest calculation and Returned vendor checks are dealt with the Checks topic.

Cash concentration can be found in the Planning topic. Planning also deals with the payment program, payment requests, bill of exchange presentation, memo record and telephone list.

The Tools topic covers the distribution to cash management systems.

The Information System topic deals among other things with the Liquidity forecast. You can use this to obtain relevant information in connection with customer and vendor cash flows. The structure of the cash position and business transactions that affect the cash position are also described here. SAP Cash Management uses the cash position to reflect movements in bank accounts, while movements in the subledger accounts are represented using the liquidity forecast.

Further topics include : Payment advice journal (entered and changed planned items), Compare and check and Reconciliation with cash management.

In the Environment area you will find functions for transferring market data to the SAP System. Market data can be transferred using the file interface, realtime datafeed or via the spreadsheet. The areas Worklist and Change master record are also described here.

Prerequisites : In Data Setup you can find out what needs to be done before you can go live with SAP Cash and Liquidity Management..

Source : Sap

7 .

What are the SAP Liquidity Planner Features?

* In the Assignment topic you will find information about programs that you can use to assign functionally accurate liquidity items to actual payments.

* In some cases you will find it useful to transfer certain amounts, without reference to a particular document, from one liquidity item to another. You can create, change or display these transfers from the application menu.

* Queries are defined in Settings . These are the rules with which mechanisms derive liquidity items. These queries contain conditions for the values available for each mechanism and the liquidity item used if the condition defined in the query is met.

* Under Information System you will find information about the most important reports for the liquidity calculation.

8 .

What is SAP Collections Management (FIN-FSCM-COL)?

Application for proactive receivables management

SAP Collections Management allows managing individual AR accounts. It allows AR Clerks to prioritize their dunning on Key Customers and deals with case when the Bulk Dunning is not efficient enough.

SAP Collections Management identifies the ?bad? payers and automatically add them to Clerk Work Items with list of relevant actions to take.

The first step, having all required information from SAP Collections Management the clerk tries to contact the customer (by priorities).

The second step, clerk logs the customer promise to pay which can be monitored in SAP Collections Management. In the other case, clerk can log a Dispute Case into SAP Dispute Management.

9 .

What is SAP Credit Management (FIN-FSCM-CR)?

Application for supporting and automating credit decisions

SAP Credit Management takes all information and automates credit scoring, credit decisions and calculations of credit limits through Credit rules.

The Credit score can be update automatically or manually for each Customer.

SAP Credit Management adds also a new functionality to integrate XML data from rating Agencies.

For Each Customer, SAP Credit Management allows to attach additional information such as bank record and credit reports.

It helps automate the credit decisions making

To sum up the advantage of SAP Credit Management :

* Through Credit Manager Cockpit in the Portal, Credit Data is collected from different sources and compiled into Customer Credit fast Sheet.

* Identify Risk Customer and debt through a Credit scoring

* Follow-up of Customer Payments

* Segmentation Customers by credit risk.

10 .

What is SAP Dispute Management (FIN-FSCM-DM)?

Application for efficient processing of receivables-related dispute cases

SAP Dispute Management adds a new credit control clerk in order to reduce the time consumed in dispute Management. It helps indeed to collect cash from customer faster.

Features

The SAP Dispute Management process can be summarized into :

* Create a new dispute Case related and attach this case to open items on a document ( can be internal or external )

* Depending on Tasks, Assign roles to the dispute case, each role having different tasks. The tasks can include for example: question, enhance information, comment ?

* Dispute Cases are now classified by processing status and the reason.

* If Actions must be taken to resolve the dispute, the dispute can be marked for follow-up

* If no agreement found for the dispute, the case may escalade to next management level

11 .

What is SAP In-House Cash(FIN-FSCM-IHC)?

Application for optimizing payment transactions within and outside of the group

SAP In-House Cash is used for processing internal and external payment transactions within a group or company. By using SAP In-House Cash you can reduce the number of external bank accounts you hold and the volume of foreign payments you have to make. SAP In-House Cash is implemented at a central location within a group of companies, for example, in head office.

With SAP In-House Cash , you can process the following transactions :

* Internal payments

* Central payments

* Local payments

* Central incoming payments

The following graphic shows the flow of data within a group of companies that uses SAP In-House Cash in its head office.
SAP In-House Cash(IHC)

12 .

What are the advantages that an organization can have through effective financial supply chain management?

Well, it is basically an approach that is very essential for any business to consider in the present time. This is because it brings a diverse array of benefits for one and all. Those who go for it can simply make sure of a very large number of benefits some of which are listed below :

* Financial Chain Supply Management simply make sure that the availability of finance at the right time

* Better customer relationship management can also be assured

* Timely delivery of products to the vendors and to the customers

* A close eye can be kept on the production, as well as on the stock availability

* The users can simply make sure of no loss occur due to any minor financial issues

* It is also possible for the users to simply make sure of categorizing the products easily when one has to deal with a very large number of products.

13 .

What are the reasons an organization should adopt SAP FSCM according to you?

Management of the credit collections and the concerned process is not a simple job in the present time. This is because of changes in the nature of users and their preferences. Another major problem is the competition which is obviously a challenge for any business in the present time. With SAP FSCM, one can simply enhance all the processes related to financial management in the organization. There are several functions in the tool with the help of which it is possible for the users to simply solve the issues related to finance and can enhance the overall visibility of the business.

14 .

Is my business too small/ big to use SAP FSCM?

As I mentioned before if you currently manage your Credit Collections process utilizing the SAP FI-AR module then you can use SAP FSCM. The size of your business should not be seen as a blocker to move to SAP FSCM. In some cases, having large volumes of customers or large volumes of invoices increases the potential benefits. The real measure is to look at the potential process improvements. If you want to perform credit checking and scoring in a more efficient manner SAP FSCM will improve your existing process.

SAP has recently released an RDS to provide an efficient process to implement SAP FSCM, reducing the cost of implementation. This is targeted at smaller customers wanting an accelerated implementation. Please note this is only available for customers on Enhancement Package 5 and beyond.

15 .

How do you implement SAP FSCM?

It is really important to note that a SAP FSCM project is 80% process re-design and 20% software implementation. It is therefore imperative that any business implementation of SAP FSCM aligns to these percentages. An implementation team cannot work in isolation from the business as the screens, terminology and processes are considerable different to core SAP FI-AR.

A business cannot input into any solution unless they understand the full capability of a system, otherwise they are over reliant on the implementation partner to make decisions for them. With this in mind, running business workshops on a proof of concept within the customer’s landscape enables the customer to make decisions with a better understanding. In turn this will reduce the subsequent phases including, build, test and training.

16 .

Do I need to have PI to use SAP FSCM Credit Management?

The simple answer here is no if you have Enhancement Package 5. However you need to implement WS-RM to replace the job PI does. If you have a PI server it does not make sense to look at the WS-RM option. If you do not have PI and want Credit Management it is worth considering WS-RM (if you have Enhancement Pack 5). To be fair this is more of technology question for your BASIS team to decide the landscape approach they plan to adopt.

17 .

What are the major factors that can impact the financial progress of an organization according to you and how SAP FSCM can help in it?

Financial Progress in a continuous manner is actually a tough job for the business. There are certain factors that can have a direct impact on the same. Some of these factors are :

* The sudden resignation of skilled employees engaged in handling major financial responsibilities

* Delays caused due to improper financial handling

* Shifting of the department and their heads

* Delays in the services affecting the production and the customer relations

* Unexpected expenses arrive due to issues such as quality or the claims imposed by the customers

SAP Financial Supply Chain Management tool is powerful in deriving a lot of information about all the above issues and with the help of the same, the concerned actions can easily be taken by the organizations to keep up the pace simply.

18 .

Explain the term "Disputes"?

It is basically a circumstance when a client, seller, retailer, provider, a distributor or anybody managing an association neglects to acknowledge the arrangements of the organization. The question can be because of the mix-up or an association or some other gathering. By and large, most debates show up because of the variables which are connected with the budgetary exchanges.

19 .

What are the things that one would pay attention to while handling customer related financial functions?

There are certain things that generally matter. The main thing is to ensure how to offer the item to the client without offering any markdown. Next is to focus on the exchange history of the client to comprehend the decision and inclinations as it would be a valuable methodology. It is additionally critical to give close consideration to the danger evaluation of the client.

20 .

Is there any limit on handling customers with SAP FSCM tool?

No, there is no such limit and the users can easily keep up the pace without worrying about anything like that.

21 .

According to you, what is the biggest benefit that an organization can have with the SAP FSCM approach?

The potential risk of bad credits can easily be avoided up to a very good extent.

22 .

How do you handle your anger?

I don't get angry very easily but in the rare occasion that I do, I hold it in and act as though nothing is wrong.

23 .

How will you approach learning this "new" job At Sap Fscm?

Interview peers and leaders/managers, read industry news, practice the skill sets needed, absorb information on the job as much as possible.

24 .

What exactly SKU stands for?

It means Stock Keeping unit and is basically an approach that gives information about a specific financial aspect.

25 .

What are the elements of an effective supply chain management system according to you?

There are certain elements:

* The very first one is the availability of resources and an effective application through which things can be done in the right manner

* The next big thing is transportation. No goods can be delivered to the customers or to the concerned parties on time without a properly managed system.

* The overall availability of goods and the production time required to meet demand can also largely affect the supply chain management system

* The proper communication should also be there among the vendors and organizations, customers and organizations, and other parties

* Also, it is necessary for the organization to make sure of an effective billing system for the same.

* The product barcodes can also play a significant role in making this approach more useful and reliable.

26 .

What improvements can you have through a financial supply chain management tool in the organization?

The overall visibility of the financial flow can easily be expanded with the help of this approach and it has already been proven by the organizations who have already adopted the same. The users can easily recognize the events that have a great impact on the working capital and can improve the same. Also, a lot of information can easily be derived with the help of which the users are free to improve the pricing policy, discount gives, terms affecting and managing the payments, inventory related factors as well as the financial auditing can be improved in no time.

27 .

What is Finance Replenishment?

It is basically maintaining a specific level of finance or cash when it goes down due to the reasons such as emergency needs and investments. Every organization has to maintain a financial stock actually.

28 .

What BPI term stands for?

The term BPI stands for Business Process Integration.

29 .

What are the general transaction codes for TR modules?

Following are the general transaction codes for TR modules :

* FV11 Create condition.

* FV12 Change condition.

* FLQAD Assignment for invoices.

* TBDM Market Data File Interface INPUT.

* FLQC10 Regenerate flow data.

* TBEX Spreadsheet of market data.

* FV13 Display condition.

30 .

Explain NetWeaver?

NetWeaver is an application builder from Netweaver for integrating databases and business processes from some sources while exploiting the leading Web services technologies. Part of the company’s mySAP product group that can run on a single instance of NetWeaver known as SAP Web Application Server (SAP WEBAs).

31 .

When Emotional Intelligence Matters At Sap Fscm?

* Emotional intelligence, or EQ, has come into vogue as a good trait to hire for.

* EQ is the ability to use emotional information to guide thinking and behavior, to recognize other people’s emotions and your own, and to discriminate between different feelings and label them appropriately.

* EQ is considered essential to help teams function well. Here are some of the top questions for help you get an idea of how candidates perceive their emotions and those of others.

32 .

Mention what is the importance of ODS in BIW?

An ODS object serves to store debugged and consolidated transaction data on a document level. It defines a consolidated dataset from one or more info-sources. This dataset can be evaluated with a Bex query or an Infoset query. The data of an ODS object can be updated with a delta update into InfoCubes or other ODS objects in the same system or across systems. In contrast to multi-dimensional data storage with InfoCubes, the data in the ODS object is stored in transparent, flat database tables.

33 .

Mention what is LUW (Logical Unit of Work)?

LUW is a span of time during which database records are updated, either commit or rollback.

34 .

Explain what is an update type with reference to a match code ID?

If the data in one of the base tables of a matchcode ID changes, the matchcode data has to be updated. The update type stipulates when the match-code has to be updated and how it has to be done. The update type also defines which method is to be used for building match-codes.

35 .

Explain what the .sca files and mention their importance?

.sca stands for SAP component Archive. It is used to deploy the Java components, patches, and other java developments in the form of .sca, .sda, .war and .jar.

36 .

Mention what is the protocol does SAP Gateway process use?

The SAP gateway process uses TCP/IP protocol to communicate with the clients.