Treasury

Main Process

 

SAP Treasury and Risk Management is full-featured, integrated series of solutions that are geared towards analyzing and optimizing business processes in the finance area of a company.  It offers the customers straight through processing of the principal tasks in a finance department to ensure optimum liquidity management as well as portfolio and risk management - in strict accordance with legal regulations.

The software thus facilitates decisions regarding future investments and borrowing, based on current liquidity analysis and risk positions. At the same time, the application takes into account the current conditions in financial markets in order to provide an integrated risk analysis.

One important aspect of all developments within TRM over the recent years and also in future is to be compliant with legal regulations, such as IFRS or US-GAAP. For that reason TRM offers parallel valuation areas to follow different legal requirements in parallel, for the normal position management as well as for hedge accounting. Also SOX have been taken and incorporated into the application.

The integration of SAP TRM into existing SAP or third party software enables precise measurement of the effects on liquidity and risk in the interest rate and currency areas.

Using the SAP NetWeaver in SAP ERP SAP Treasury and Risk Management can also extent beyond the border of the ERP system and integrate to dealing platforms for financial transactions or interest rates or FX rates can be downloaded.

Key functionalities include:

• Transaction Manager
• Market Risk Analyzer
• Credit Risk Analyzer
• Portfolio Analyzer

SAP Cash Management is an outmost helpful instrument to support the cash manager ideally in managing liquidity and currency risk in the most efficient way. Redundant data entry is entirely eliminated. All corporate sectors operate on a unique and consistent data basis which is used for different purposes – for example by the A/R accounts manager for controlling incoming payments, by the A/P accounts manager for controlling cashed checks or the cash manager for controlling bank transfers. At the same time, the cash manager is free to choose his focus on the accurate and up-to-date cash reports – across countries, currencies, subsidiaries or even across the whole group.

SAP Financials supports centralized as well as decentralized best practice solutions. No matter which of these two approaches a company prefers, the SAP system provides the opportunity to determine bank status and liquidity forecast on different levels of the group. If liquidity decisions are taken centrally on a corporate level, the actual and detailed information from SAP Cash Management provides a good basis to net liquidity gaps and surpluses of subsidiaries and establish a centralized, inter¬company funding process. The same opportunities are given in risk management: The currency and interest rate exposures between subsidiaries can be net, leaving only the overall exposure for hedging. Another result is that transaction costs as well as spread costs of simultaneous investing and borrowing activity throughout the enterprise are saved.

Finally, a centralized cash management and treasury unit allows for a level of financial expertise that is less easily achieved using a decentralized system. This represents another critical factor for managing liquidity of high quality. Considering the requisites that global acting companies are facing and considering today’s speed of making business, a globally integrated view of actual cash and liquidity information is indispensable.

As a result of the high degree of automation within SAP Cash Management, only exception processing needs to be done manually. This principle treats with care the alertness of all involved parties who can now fully concentrate on the exceptions and special cases that arise during the post processing procedure. In addition, daily automatic processing implicates a better operational control, because unexpected transactions are promptly visible and mistakes can be removed straight away.

Even other corporate sectors profit from this solution. First of all, it takes over a central position within the Financial Supply Chain Management solution as it prepares and reports all cash flows and therefore constitutes an important reporting instrument. Second, a solid foundation is created for analysis within the SAP Financials Corporate Finance Management Solution – especially concerning the functionality for financial deals and risk management.

The SAP In-House Cash application allows diversified companies to optimize their intra-group payment transactions by opening an in-house bank. An In-House Cash Center is a virtual bank within the corporate group, with which each associated company has one account or more. For the associated companies, the In-House Cash Center is just another house bank, which they use primarily to process payables and receivables involving other group companies. At the same time, you can set up accounts for external companies that are not associated with the group. This allows them to be included in the netting process.

The In-House Cash Center is used to process all payments between company units, thus keeping cash resources within the group and optimizing how they are applied. This saves on the costs of external netting services and gives you greater flexibility when you process payment netting transactions.

The SAP In-House Cash component allows companies with a diversified organizational structure to minimize the actual flow of cash and therefore reduce bank charges, interest expenses and losses resulting from delays in value-dating payments. It also helps to avoid many of the disadvantages associated with external clearing solutions, such as inflexible procedures with fixed dates and extra costs resulting from manual post processing. By managing accounts centrally, you can assure your company's ability to pay, optimize credit management, minimize interest expenses, and maximize interest revenues.

SAP Bank Communication Management is used for managing multiple bank communication interfaces, enabling you to connect to your bank, track the entire payment life cycle of a transaction, and improve straight-through processing rates and internal compliance. SAP Bank Communication Management is also responsible for the creation and approval of batches, the payment status monitor, and the bank statement monitor.

With SAP Bank Communication Management, the payments in one or several payment runs can be presented and processed in a payment statement monitor. This monitor also serves as a repository for incoming status messages from SWIFT and from individual banks. The payments in the payment run can be grouped to one or several batches according to your needs. For example, payments can be grouped according to low value and high value payments. You can also use digital signatures to approve, reject, or resubmit payments.

SAP Bank Communication Management can also be used in conjunction with the SAP Integration Package for SWIFT. This provides you with one single interface for bank communications via SWIFTNet.