Influence of controlling the investment projects in ERP(M) with primary focus on the cash flow in the company

Abstract

Even though the practice of planned investment analysis based on scientific methods has become fully widespread in today's industry, there are still no sufficiently elaborate mechanisms for monitoring of the very flow of the investment cycle, primarily in terms of cash flow, i.e. asset outflow for that purpose. Within huge industrial systems, characterized by highly dynamic and versatile investment activity, this issue is particularly gaining in significance. The importance and management function of the control system in companies today is becoming ever more significant. Main considerations are related to defining plan values as some kind of targeted achievable goals, to which we aspire, and finally reach after many uncertainties. For the purpose of control, some basic control mechanisms are being used, such as the control of: income and expenditure return on investment and finally the most important type of control-the cash flow control. Monitoring of investment projects should be understood as one of the necessary activities that are a part of our thorough effort to improve the entire system of the internal control in the company, with a particular focus on the risk implicit to investment. Investment projects are a single, but highly important activity, inside the company production cycle, with a very high level of causality and interdependence with other business processes both in the company and outside. Introduction of the integral business information system ERP(M) (Enterprise Resource Planning) opens the door for new opportunities for monitoring of all business activities to be introduced into the company. As one of the leading international ERP(M) systems, the SAP system through a certain modification of its AA (Assets Accounting) module based on the standard, somewhat adjusted IM (Investments Management) module, in addition to budgeting enables the monitoring of the very investment cycle flow, primarily in terms of cash flow, i.e. money outflow for that purpose. By such a modification of these SAP modules, the control of investments in the company is achieved, primarily from the aspect of cash flow and maintaining the company liquidity.