Ac810 Treasury Management Basic Functions[1]

AC810 Basic Functions in Treasury Management

AC810 Basic Functions in Treasury Management  SAP AG 1999

R/3 Release: 4.6C August 2000 Material number: 5004 0724

Copyright

Copyright 2000 SAP AG. All rights reserved. Neither this training manual nor any part thereof may be copied or reproduced in any form or by any means, or translated into another language, without the prior consent of SAP AG. The information contained in this document is subject to change and supplement without prior notice. All rights reserved.

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Treasury Level 2

Level 3 AC815 5 days Loans Management for Financial Services

AC030

3 days

Treasury Overview

AC810 3 days Basic Functions in Treasury Management

AC816 3 days Loans Management for Corporates AC820

4 days

Securities Management AC825 3 days Money Market, Foreign Exchange and Derivatives AC830

3 days

Market Risk Management AC805 AC010

5 days

Financial Accounting and Reporting

 SAP AG 1999

3 days

Cash Management AC215 Cash Budget Management

1 day

Course Prerequisites

Recommended: AC030 - Overview of Treasury

 SAP AG 1999

Target Group

Audience: Members of the project team System staff Organization staff

Duration: 3 days

 SAP AG 1999

Notes to the user: The training materials are not teach-yourself programs. They complement the course instructor's explanations. On the sheets there is space for you to write down additional information.

Course Overview

Contents: Course goals Course objectives Course content Course overview diagram Main business scenario

 SAP AG 1999

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Course Goals

This course will prepare you to: Identify the basic Treasury Management functions that are common to all the subcomponents Configure banks and business partners and recognize the concepts behind transaction and position management in SAP Treasury

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Course Objectives

At the conclusion of this course, you will be able to: Set up organizational units in the SAP System Create and configure banks and business partners Make the system settings needed to control internal processing Describe and configure the payment program for payment requests

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Course Content Preface Unit 1

Course Overview

Unit 7

Unit 2

Overview of Treasury Management

Transaction and Position Management - Structure

Unit 8

Unit 3

Organizational Units

Transaction and Position Management - Process

Unit 4

Business Partners

Unit 9

Payment Program for Payment Requests

Unit 5

Banks

Unit 10

Market Data Management

Unit 6

Transaction and Position Unit 11 Management - Preparation

Information System

 SAP AG 1999

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Course Overview Diagram

Overview of Treasury Management Organizational Units Business Partners Banks Transaction and Position Management - Preparation Transaction and Position Management - Structure Transaction and Position Management - Process Payment Program for Payment Requests Market Data Management Information System  SAP AG 1999

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Main Business Scenario

You are using (or have successfully installed) the SAP Financial Accounting (FI) module, and want to implement SAP Treasury Management. You begin by making the basic settings in SAP Treasury Management.

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You are a member of a project team. Your task is to make the basic settings for the SAP Treasury module.

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Contents: Overview of SAP Treasury Main targets of Treasury Overview of the product types SAP Treasury processes SAP Treasury functions Overview of the basic functions in Treasury Management

 SAP AG 1999

Course AC810 deals with the basic functions in Treasury Management which are common to all subcomponents (money market, foreign exchange, securities, loans and derivatives). The course centers on general concepts related to transaction and position management and the corresponding Customizing options.

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Overview of Treasury Management: Unit Objectives

At the conclusion of this unit, you will be able to: Provide an overview of the SAP Treasury system State the relevant product types Explain the various processes and basic functions in Treasury Management

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Overview of Treasury Management: Business Scenario

Before you begin your work in the project team, you want to gain an overview of SAP Treasury. Which products and processes can be mapped using the new Treasury system? What functions are available? Which functions form the basis for mapping financial transactions?

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Overview of SAP Treasury Download

Market data

TM

Business partner

Derivatives Securities Loans Money Mkt Forex

Bank data

Financial Accounting

Logistics

D 100

C

D

Market Risk Management: • Interest/currency exposure • Sensitivities • Mark-to-market • Risk analysis/simulation • Value at risk Transaction Management • Management of financial transactions and positions • Transfer to Financial Accounting • Flexible reporting and portfolio analysis • Datafeed interface Cash Management: • Electronic banking • Liquidity status • Integrated operational systems • Control functions

C 100

 SAP AG 1999

The objective of SAP Treasury is to ensure efficient liquidity, portfolio and risk management. SAP Treasury is subdivided into the following areas: Cash Management (CM) offers tools for efficient liquidity analysis. Treasury Management (TM) and Loans Management (LO) support financial transaction and position management. Market Risk Management (MRM) provides methods and procedures for assessing risk positions.

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Main Targets of Treasury

Priority

Target

%1)

1

Ensure liquidity

95

2

Optimize financing costs

92

3

Optimize yields on financial assets

74

4

Hedge costs (e.g. against possible exchange rate fluctuations)

61

5

Hedge sales (e.g. against possible exchange rate fluctuations)

52

6

Contribute to profit through active management of open positions

30

1) % of all companies surveyed Source: Top 500 Survey (Germany) conducted in 1994 by Price Waterhouse  SAP AG 1999

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SAP Support for Business Requirements

Treasury in conjunction with other SAP modules (FI, MM, SD)

Data integration Central decision-making Several currencies Automatic processes

Cash Management

Analysis of financial resources

Electronic banking

Investment / borrowing Data entry Monitoring Back office

Money Market Securities Loans

Reporting Risk management Foreign Exchange Derivatives  SAP AG 1999

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Selection of Relevant Product Types Product types Investment/borrowing instruments

Money market Fixed-term deposits Deposits at notice Commercial Paper

Securities Stocks Subscription rights Investment certificates Bonds Convertible bonds Warrant bonds Warrants

Hedging instruments

Loans

Forex

Derivatives

Mortgage loans Borrower's note loans Policy loans Other loans

Forex spot Caps / Floors deals FRAs Forward Swaps exchange - Interest rate deals - Cross-currency Forex swaps interest rate OTC options - Currency - Interest rate - Securities - Swaption, IRG Futures

 SAP AG 1999

You can smooth out short-term liquidity deficits and surpluses using money market or foreign exchange transactions. The system also maps securities and loans transactions for borrowing and investing in the medium to long term. Derivative financial instruments allow you to hedge against interest rate and currency risks.

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Identifying Treasury Processes

Earnings/ risk targets

Feedback Revision of planned targets

Analysis (planning)

Adjustments

Decision

Financial transactions

Analysis and trading process

Transaction and position management process

 SAP AG 1999

Documentation and control functions

From a strategic point of view, the analysis and trading process is the starting point for the various Treasury processes. At this stage, you identify and analyze the liquidity and risk positions on the basis of the risk and earnings targets you have defined. SAP Treasury provides special tools and methods with which you can perform an integrated analysis of your company's financial and risk situation. Once you have decided to conclude certain financial transactions, you enter the trading processes for these transactions in SAP Treasury Management (TM/LO). Treasury Management also supports functions for managing transactions and the related financial positions at later stages. A range of documentation and control functions are available for all Treasury activities. They allow you to perform evaluations for specific instruments or groups of instruments at each stage of the Treasury process. This fulfills the various documentation and control requirements of both Financial Accounting and Treasury.

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Analysis and Trading Process

Earnings/ risk targets

Controlling Targets Instruments Methods Measurements

Information procurement Internal: - Liquidity status - Risk position External: - Market data

Assessment of possible solutions Identification of appropriate financial transactions Simulation of alternative results

Decision Select one alternative

Processing Control Trading Back office Accounting Reporting

 SAP AG 1999

From a strategic point of view, the analysis and trading process is the starting point for the various Treasury processes. At this stage, you identify and analyze the liquidity and risk positions on the basis of the risk and earnings targets you have defined. SAP Treasury provides special tools and methods with which you can perform an integrated analysis of your company's financial and risk situation.

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Transaction and Position Management Process

Release

Trading Create new offer/ order/contract Exercise/expiration Terminations Rollovers Exercising rights

Back office Settlement/control Interest rate adjustment Netting Referencing Confirmation letters Securities account transfers Corporate actions

Accounting Postings Payment transactions Reversals Accruals/deferrals Valuation

User authorization Limit management

 SAP AG 1999

The transaction and position management processes are divided into the following areas: The trading area comprises functions for entering transactions and exercising rights. In the back office area, the transactions are settled (checked). The back office also covers processes related to position management, such as securities account transfers. In the accounting area, you make the postings for the various activities to the subledger. From here, the posting information is transferred to the FI general ledger. The basic structure of the trading and transaction management processes is the same for all the Treasury Management components. This forms the basis for integrating and processing transactions within the SAP System and provides the framework for adapting the way transactions are represented in the system to suit company-specific requirements. You can authorize different users for different activities in the transaction and position management process. This allows you to separate trading, back office and accounting functions by employee. In addition, the limit management function enables you to assign a range of different limit amounts to different transactions. You can configure the system to require transactions to be released for posting by one or several (different) person(s).

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Short-Term Financial Instruments TR-TM

Money market instruments:

TR-TM

Forex instruments: - Spot transactions - Fwd transactions - Currency swaps

Planning horizon

Liquidity position

- Fixed-term deposits - Deposits at notice - Commercial Paper - Cash flow transactions

Surplus

Deficit

Short-term

Long-term

Investment Money market Foreign exchange

Investment Securities Loans

Borrowing Money market Foreign exchange

Borrowing Loans

 SAP AG 1999

In the Money Market area, cash flow transactions allow you to represent a wide range of transactions flexibly by manually entering not just the term, but also the cash flow generated for the transaction as a result of position changes, expenses, earnings, revenues, payments, and so on.

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Medium- to Long-Term Financial Instruments

TR-TM

Liquidity position

Planning horizon

Surplus

Securities:

Short-term

Long-term

Investment Money market Foreign exchange

Investment Securities Loans

- Stock - Bond - ...

TR-TM

Loans: Deficit

Borrowing Money market Foreign exchange

Borrowing Loans

- Mortgage loan - Borrower's note loan - Financing loan - Policy loan - ...

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Hedging Instruments

Planning horizon Short-term

Long-term

Risk situation

TR-TM

Derivative instruments:

Interest rate risk Derivative financial instruments Currency risk

- Interest rate swap - Cap - Floor - ...

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Treasury Management: Functions

Complete financial transaction and position management Support of trading and back office functions Functions to monitor, check and release transactions Data transfer to Financial Accounting (including accrual/deferral and valuation)

Flexible settings for company-specific transaction and position management processes Financial transactions assigned to portfolios or managed in securities accounts Flexible reporting and portfolio analysis Datafeed interface

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Basic Functions of Treasury Management

Structure of financial transactions Central data Examples: Business partners, banks

FI

Financial Accounting AM

Asset Accounting

Money market

Securities

Derivatives

Loans

CO

Controlling

Foreign exchange

Central functions Examples: Traders/users, currencies, correspondence, financial mathematics, posting logic, payment transactions, workflow, archiving, market data, information system  SAP AG 1999

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Overview of Treasury Management: Unit Summary

SAP Treasury is subdivided into three areas: Cash Management Treasury Management / Loans Management Market Risk Management

You can represent financial transactions in Treasury Management using different processes The SAP Treasury Management functions span the complete transaction management process, from the trading stage through back-office processing to Financial Accounting

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Data Used in the Exercises Explanation of the symbols used in the exercises and solutions Exercises Solutions Unit objectives Business scenario Tips & tricks Warning or caution

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Data used in the exercises Data

Data in the training system

Data in the IDES system

Company codes

TR00 through TR20

1000

G/L accounts

113100, 113105, 113113 113913, 118888

113100, 113105, 113113 118888

Treasury business partner

DEUBA – Deutsche Bank CITI – Citibank broker

1000 – Deutsche Bank

CM groupings

BANKEN (Bank account history) BANK-IST (Status of available bank accounts)

BANKEN (Bank account history) BANK-IST (Status of available bank accounts)

PERSONEN (Customers, vendors and clearing accounts)

PERSONEN (Customers, vendors and clearing accounts)

GESAMT (Total display)

GESAMT (Total display)

Notes to the exercises: Create your transactions in UNI, CHF, or USD. Exchange rates have only been maintained for these currencies. Do not delete any existing Customizing entries. You should only add new entries.

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Exercises

Unit: Overview of Treasury Management

• SAP R/3 Treasury applications • Relevant product types

You want to gain an overview of the SAP R/3 Treasury module.

1-1

Log on to the system with your User "TREA-XX". "XX" = Your group ID number = Your PC number

1-2

Browse through the various menu items in the Treasury application to get an overview of the different functions.

1-3

Familiarize yourself with the structure of the Customizing settings.

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Solutions

Unit: Overview of Treasury Management

1-1

Log on to the system with your User "TREA-XX". Your instructor will tell you which system to use. Make sure that you use the correct client, and inform the other person in your group of the new password.

1-2

Overview of the various functions Accounting Treasury Treasury Management Basic Functions / Money Market / Foreign Exchange / Derivatives / Securities / Market Risk Management

1-3

Overview of Customizing Tools AcceleratedSAP Customizing Project Management Button: SAP Reference IMG Treasury Treasury Management ...

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Contents: SAP R/3 in your company Client and company code Portfolio and securities account Users and traders

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Organizational Units: Unit Objectives

At the conclusion of this unit, you will be able to: Explain the relationship between the Customizing settings and the application Identify the organizational units in SAP Treasury Configure trader and user data

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Organizational Units: Business Scenario

You want to gain an overview of the organizational units in SAP Treasury and answer the following questions: How do the Customizing settings affect how I work in the productive system? What options are available for managing financial positions How can I ensure that the trader data is assigned to the correct users and stored with the individual financial transactions?

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SAP R/3 in Your Company

Requirements R/3 Customizing

Company

Application

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Customizing is the term used to describe the process of adapting the standard settings delivered with the system to suit company-specific requirements. Customizing settings determine the options in the application. For example, you may only want to permit certain entries, or allow users to perform specific activities. You usually customize the system once when you go live with the SAP system. You can make any Customizing settings you require for day-to-day business (but which are not vital to system operations) using application functions.

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Customizing and Application

IMG

Change Business Partner

Treasury Management -

Partner

Basic Functions

Industry

Business Partners

Possible entries

Industry

Industry 0001 0002 0003

Deuba

Description Banks Insurance ...

Industry 0001 0002 0003

F4

Description Banks Insurance ...

 SAP AG 1999

The Implementation Guide (IMG) lists all the activities that can be customized for each application. Customizing settings determine the options in the application. For example, you may only want to permit certain entries, or allow users to perform specific activities.

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Portfolio Company code

Client

Business area

Securities account

Controlling area

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The Treasury modules use the central SAP organizational structures. This ensures that the Treasury system is integrated with the other SAP applications. The client is a self-contained unit within the SAP system (commercially, organizationally, and technically) with separate master records and its own set of tables. Client data applies for all

company codes and organizational structures. The client usually represents the corporate group level. A company code (FI) is the smallest organizational unit for which a complete, self-contained set of accounts can be drawn up for external reporting. The company code is the unit for which you record all the posting activities and generate all the documents for financial statements (balance sheet, profit and loss account). A client can have several company codes, which enables you to manage the accounts for several independent companies at the same time. Business areas (FI) are organizational units for internal financial accounting. They are used to group G/L transaction figures for internal evaluations (internal balance sheet/P&L). You can define business areas across several company codes. Controlling areas (CO) are organizational units within an enterprise for which you can perform comprehensive cost accounting. You can make further subdivisions in SAP Treasury by defining Treasury-specific evaluation groups, such as portfolios and securities accounts.

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Position Management Options

Company code position For several securities accounts At portfolio level At securities account level For single items

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The level at which you manage your financial positions is of fundamental importance. Position management is the basis for valuation. In the money market, foreign exchange, derivatives and loans areas, you manage transactions as single items. You can manage securities positions for a securities account, portfolio, for several securities accounts, and in some cases, as single items.

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Securities Account and Portfolio

Company code position

Portfolio position 1

Sec. acct position 1

Single items

Portfolio position 2

Sec. acct position 2

Single items

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You can create several portfolios within a company code. You can assign several securities accounts to a portfolio. (You can only assign a securities account to one portfolio.) You use securities accounts to manage and value your positions. You need them for all transactions that require position management. This primarily applies for listed securities. You can use securities accounts as a basis for generating securities account statements, evaluating positions, and performing securities account transfers. A securities account in the system usually relates to an existing securities account at a bank. Securities accounts ensure that the legal framework and the related administrative rules can be observed. A portfolio is an evaluation unit in the company code, to which you can assign securities accounts (securities area) or financial transactions (money market, forex, derivatives, borrower's note loans). You can use portfolios to run an aggregated evaluation of different financial products. A portfolio also acts as a risk management instrument for controlling and evaluating a your company's risk positions. In the securities area, you can value positions for accounting purposes at portfolio level.

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Define Portfolios

Company code

1000

Treasury: Portfolio position Portfolio

Portfolio name

SEC_1

Securities portfolio 1

SEC_2

Securities portfolio 2

BOND

Bond portfolio

FXPORT

Forex portfolio

CREDIT

Credit portfolio

MONEY_1

Money market portfolio 1

MONEY_2

Money market portfolio 2

F_ASSETS

Fixed assets

C_ASSETS

Current assets

 SAP AG 1999

To evaluate and value positions at portfolio level, you first have to define the portfolios. You define your company-specific portfolios in Customizing. An example of a possible entry would be a trader portfolio.

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Securities Account Master Data

Company code

1000

Securities account

Account++

Sec. acct name Bank information Depository bank

DEUBA

Sec. acct number

22224446

Clearing account

87575733

House bank House bank

1000

House bank acct

1000

: : Portfolio

?

 SAP AG 1999

The securities accounts you create in the system usually represent existing securities accounts at a bank. Meaning of selected fields in the securities account master data: Depository bank: Partner ID of the bank where the securities account is kept. You first create the bank as a business partner in the role of "depository bank". Securities account number: Number used to manage the securities account at the depository bank. Clearing account: Account number of the cash clearing account at the depository bank. Internal bank account: Account number of the cash clearing account in SAP Financial Accounting. Blocking type: If a restraint on disposal applies to the entire securities account, you must specify the blocking type. Block flag until: Date until which the restraint on disposal applies for the securities account. Portfolio: Assignment of the securities account to a portfolio. This field is displayed if the Portfolio indicator is set in Customizing. Business area: When you post a transaction, the system uses the business area defined in the securities account master data. If there is no entry in the securities account master data, the system uses the entry in the account assignment reference.

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Defining Trader and User Data

Trader 01 Trader 02 Trader 03

Company code

1000

User Brown

M T WDC REC M T 1

Trader Trader 01

 SAP AG 1999

You define traders per company code. If a trader is active in several company codes, you have to make the relevant settings in each company code. You can define trader-specific input rules as user data. For example, M = million, T = thousand. WDC enables you to carry out a working day check, and REC a rate entry check. Once you have created the trader (and assigned a user name), you must assign this person authorizations for the transactions he or she is allowed to conclude.

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Traders: Trader Authorizations

Trader authorization

Treasury Trader01

Money market

Authorization X

Fixed-term deposit Assign

51 A Fixed-term deposit 100 Investment 200 Borrowing Deposit at notice 52 A Call money 100 Investment 200 Borrowing

 SAP AG 1999

When you assign transaction authorizations for traders, you can restrict the trading powers to certain financial instruments (such as money market), product categories, product types, or transaction types. A higher-level authorization means that a trader is allowed to create any transaction below this level. For example, a trader authorized for the Money Market area automatically has authorization to conclude a fixed-term deposit or a deposit at notice. Similarly, authorization for a product category automatically includes the product type and transaction type levels below it. Before you can assign trader authorizations, you must define the trader in Customizing. To run evaluations that concentrate on the transactions or positions of a trader, you can store the name of the trader in the transaction. You can enter the trader name manually when you conclude the transaction, or let the system propose the trader name automatically on the basis of the user name. You can assign specific user data to your traders. This speeds up data entry, and allows you to use automatic checks for working days and rates/prices (on the basis of defined deviation intervals). The logic for assigning authorizations is the same as for business partner authorizations.

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Organizational Units: Unit Summary

The entry and selection options in the application depend on the settings made in Customizing. The Treasury modules make use of the central SAP organizational structures. There are also Treasury-specific portfolios and securities accounts. If you want to record trader data with your financial transactions, you set up corresponding traders in Customizing and assign authorizations to them in the application.

 SAP AG 1999

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Exercises

Unit: Organizational Units Topic: Defining Organizational Units

• Organizational units in SAP Treasury • Configuring trader and user data

You first want to gain an overview of the organizational units used in SAP Treasury. You then want to assign corresponding trader data to the system users.

1-1

Create the following portfolio for your company code TRXX in Customizing: Portf-XX.

1-2

Create your own trader in Customizing using the name "T-XX", overwriting the entry "TREASURERXX". Assign your user name TREA-XX to this trader.

1-3

The trader is authorized to conclude money market, foreign exchange, derivatives and securities transactions. Define the corresponding authorizations for your trader.

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Solutions

Unit: Organizational Units Topic: Defining Organizational Units

1-1

Create portfolio Customizing: Treasury Treasury Management Basic Functions Organization Define Portfolio Enter your company code TRXX and choose New entries (button). Save your entries.

1-2

Create trader and assign user name Customizing: Treasury Treasury Management Basic Functions Organization Define Trader Enter your company code TRXX and choose New entries (button). Save your entries. Treasury Treasury Management Basic Functions Organization Define User Data Find your user and overwrite TREASURERXX with your new trader T-XX. Save your entries.

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1-3

Create user authorizations Application: Accounting Treasury Treasury Management Basic Functions Master Data Trader Authorization Enter your trader T-XX and your company code TRXX, and choose Enter. Set the indicators and save your entries.

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Business Partners

Contents: Role category / role type Data Classification Grouping / number ranges Views / Field modification Relationships Release Standing instructions Transaction authorizations

 SAP AG 1999

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Business Partners: Unit Objectives

At the conclusion of this unit, you will be able to: Fully configure business partners and assign authorizations Define standing instructions

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Business Partners: Business Scenario

Before you can conclude financial transactions with a business partner, you must create the partner in the Basic Functions area of the application. To do this, you must first make the corresponding settings in Customizing. You only want to authorize your business partners for certain transactions. When you create transactions with a business partner, you want the system to default to certain settings you have defined for that partner. What options are available?

 SAP AG 1999


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Business Partners - Overview Customizing Control data

Roles

Relationships

General

Prerequisite for

Creating business partners

Prerequisite for

Creating financial transactions  SAP AG 1999

Depending on your liquidity situation (CM), your risk situation (MRM), and the revenue and risk targets you have set, you conclude certain financial transactions with your business partners. Example: You have a liquidity surplus, and invest this surplus amount with the business partner "Bank A" as a fixed-term deposit. The functions for entering transactions are based on the Customizing settings for the transaction architecture (product types, transaction types, ...), and certain application data, such as business partner information (address, bank details, …). In SAP Treasury, enter each financial transaction with a (specific) business partner. The business partner data must be available before you enter the transaction. The settings that have been made for business partners in Customizing determine the options available for creating business partners in the application.

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Roles and Functions

Natural person

Organization Borrower Agent/counterparty Lawyer Surveyor

Interested party Treasury partner Beneficiary Issuer Depository bank Trustee Payer/payee Assigning institution Guarantor

 SAP AG 1999

A business partner is one of the following: A natural person An organization A group of people or organizations in which you have a business interest In the SAP Treasury system, you conclude transactions with business partners. Banks or central treasury departments are typical partners. You create a master record for each business partner. You can assign several roles or functions to one business partner. A role (= role category) specifies the characteristics a business partner must have before you can perform certain transaction activities with that partner. The business partner roles are used to record the functions of a business partner in a particular transaction. Example: A business partner acting as a borrower or a treasury partner.

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Business Partner Data: Overview Business partner

Central data

Name Address overview Bank details Personal data Employment data Legal data Fiscal years Additional data Relationships

Company code data

General role data

Role overview Role data Credit standing Tax data Reg. reporting data Control data Bank

Account information Account interest Autom. pmnt transact. Payment data Dunning data Reg. reporting data Control data Relationships

 SAP AG 1999

The user interface for the business partner data was redesigned as part of the Enjoy project. The new screen layout uses tabstrips that let you navigate between the individual business partner views. You can still navigate as before using the menu. The data you can maintain for business partners is divided into three areas: Central data This data is available for every business partner, regardless of the partner role. General data General data is held centrally for all roles. Access to this data can vary according to the role category, depending on the settings in Customizing (role-view-assignment). Company code-dependent data Data that only applies for a particular role category in the respective company code. Each of these areas is divided into different views.

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Creating a Business Partner

?

Business partner Grouping Role category

Application level

Classification Organization Natural person Collective partner

System level

 SAP AG 1999

When you create a business partner in the system, you must specify the classification and the grouping in the initial screen. You can assign a role (= role category) when you create the partner, or at a later date. The classification options and role categories are predefined in the system. You define the grouping in Customizing, and use it to classify the business partners according to your own criteria.

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Customizing and Application

Classification

Customizing

Grouping

Number ranges

Role category

Role type

Views

Field modifications

Relationship categories

Relationship types

Data entered

Application

Business partner authorization  SAP AG 1999

Standing instructions

Classification: You create a business partner either as an "organization" or a "natural" person. The classification affects the data you enter (for example, legal form for an organization, marital status for a natural person). The grouping lets you classify business partners according to your own criteria. Examples: Grouping1: Partners for money market, forex, and derivatives transactions Grouping 2: Partners for loan transactions ... The business partner roles (role categories) are used to record the functions of a business partner in a particular transaction. The role category determines which application functions are permitted or excluded. You can use the field modification functions to define which fields in the respective business partner views are required, optional, or suppressed. You can link business partners using relationships. The data the user enters is divided into central data, general data, and company code data. You have to authorize the business partner for the permitted transactions. Standing instructions are general agreements made with a business partner for processing similar types of transactions.

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Grouping

TR

FI created automatically

Create business partner

Create customer

Customizing: Grp.

NR

TR01 01 TR02 02

Acct group Descr. of grp. CUST CUST

TR partner (int.) TR partner (ext.) BP grouping

No.

Fr. no.

01 02

000001 000099 AAAAAA

To no. Curr. no. Ext.

ZZZZZZ

5 X Number ranges

 SAP AG 1999

You define the number range for the business partner via the business partner grouping. This number range controls whether the business partner key is assigned internally by the system, or externally by the user. It also determines whether the key must be numeric or alphanumeric. In addition, you use the business partner grouping to create the link to Financial Accounting by assigning a corresponding customer account group. If you create a partner and call up views that are relevant for processing on the basis of customer accounts, the system automatically creates an FI customer. Customer-based views: Bank details; tax data; control data; account information; account interest; automatic payment transactions; payment data; dunning data. To map payment flows in Cash Management, you assign a planning group to the business partner (Company code data -> Account information). This ensures that payment flows are included in Cash Management, even if the payment details are missing in the transaction.

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Define Role Types / Role-View Assignment

RoleC A001 A002

RoleC 1000 1000

Name of role type Domestic treasury partner Foreign treasury partner

Name of role category Treasury partner Treasury partner

RType 1000 1000

View 0100 0190

Name of role category Treasury partner Treasury partner

Description General: Credit standing CoCd: Control

 SAP AG 1999

The functions of the business partner in the transaction are defined using business partner roles (role categories). You can refine the role categories predefined in the system by defining role types in Customizing. Example: You could vary the standard address according to role category. In Customizing you can define which data views can be accessed for each role category. Example: If you do not assign the "Dunning data" view to the role category "Issuer", the user cannot call up dunning data for a partner in the role of issuer in the application. You can use role-view assignment to assign views from the general data and company code data areas to roles. Central data can be called up for all role categories.

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Field Modification

? Field modification

... ... for activities Act. 01 02 03

... for role categories

Short text

Role

Create Change Display

0100 : 1000

Fld gr. 110 382 ...

Credit standing Industry

Name of role category Borrower : Treasury partner

Hide

Required

o o

o o X

Opt.field o X o

Display o o

 SAP AG 1999

You can configure the individual entry fields in the views using the field selection options in Customizing. The following options are available for data fields: - Required - Optional - Display only - Hidden (suppressed) You can use field selection to configure fields according to activity (create/change/display business partner) or role category. (You have to maintain role-view assignment in order to modify the fields for the role category.)

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Business Partners: Relationships

Outgoing relationship

"Group subsidiary of"

Relationship

Example: Subsidiary

Example: Parent company Relationship category

Depends upon classification

Relationship types  SAP AG 1999

The selection of relationship categories is predefined in the system and depends on how the business partner is classified. Example: "Group subsidiary of ..." for an organization, "Wife of ..." for a natural person. You can differentiate within the given relationship categories by defining your own relationship types.

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Business Partners: Relationship Types

RelTyp

Description

SUB2

Important group subsidiary of

RelCat 0050

Description Group subsidiary of

 SAP AG 1999

You define relationship types to refine the relationship categories predefined in the system.

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General Customizing Settings

Business partner In this section you make additional settings that determine the selection options when you enter business partner data in the application.

General

Central data General data Company code data Extras

 SAP AG 1999

Examples of Customizing tasks: Central data:

Define forms of address

General data:

Maintain ratings for credit standing data

Company code data:

Define planning groups for displaying data in Cash Management

Extras:

Specifications for additional information fields

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Business Partners: Data Maintenance Business partner

Central data

Name Address overview Bank details Personal data Employment data Legal data Fiscal years Additional data Relationships

Company code data

General data

Role overview Role data Credit standing Tax data Reg. reporting data Control data Bank

Account information Account interest Autom. pmnt transact. Payment data Dunning data Reg. reporting data Control data Relationships

 SAP AG 1999

The data you can maintain for business partners is divided into three areas: Central data General data Company code-dependent data When you create a business partner in the application, the data fields you can maintain in the respective views depend on the following: Classification Grouping Role-view assignment Field modification

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Release Control

Activate release BPAR X Bus. partner

Business partners

Partner

Define release parameters

Role cat.

ReSt

1000

22

Active X

 SAP AG 1999

If you activate the release procedure for business partners in Customizing, any business partner data that is created or changed must be released before you can enter transactions with that partner. You can apply different release procedures, depending on the role category. For each role category, you assign the appropriate release status (release by one employee, release by two employees, …). Above example: If you change the data for a business partner with role category 1000, the change must be released by two employees before the business partner can be used.

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Business Partners: Standing Instructions

Transaction authorizations

Payment details

Business partner A

Derived flows

Correspondence

 SAP AG 1999

Standing instructions are general agreements made with a business partner for processing similar types of transactions. You can access the business partner standing instructions for payment details, correspondence, authorizations and derived flows using the tabs on the business partner maintenance screen. The integration of the standing instructions with the business partner data means that the release workflow for business partners can also be applied to the standing instructions. You can also access the standing instructions using a separate menu path. Agreements can cover: Authorizations Which financial transactions may be concluded with this partner? Payment details For transactions with business partner A ==> Correspondence For transactions with business partner A ==> Derived flows For transactions with business partner A ==>

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The system proposes the payment details for business partner A in the transaction Fixed setting: Which correspondence is generated for which transactions? Fixed setting: If the transaction with business partner A contains flow X, add taxes amounting to y% of X.

4-18

Business Partner Authorizations

Bus. partner authorization Business Partner A

Treasury

Authorization

Money market Assign

X

Fixed-term deposit 51 A 100 200

Fixed-term dep. Investment Borrowing

Deposit at notice 51 B 100 200

Call money Investment Borrowing

 SAP AG 1999

To use a business partner (BP), you have to: Create the business partner Release the business partner (if required) Authorize the business partner for certain financial transactions You can only assign transaction authorizations if the business partner has been released (where release is required) and is not flagged for deletion. You use transaction authorizations to control which transactions can be concluded with a particular business partner. You can assign transaction authorizations at the following levels: Contract type Product category Product type Transaction type You have to assign authorization explicitly to each business partner in each company code.

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Creating a Business Partner with an FI Customer

Business partner Grouping

?

Role category

Classification

•

Organization . .

Specifications Customer

?

Address ID

?

 SAP AG 1999

You can copy a customer that already exists in FI to create a business partner: The system uses the data entered in the Specifications section to establish a link between the existing customer and the new business partner you are creating.

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Business Partners: Unit Summary

Before you can conclude financial transactions with a business partner, you must create, release and authorize the partner in the Basic Functions area of the application. To create business partners in the application, you must first make the corresponding settings in Customizing. You can set up standing instructions for a specific business partner. The system proposes these values (such as payment details) automatically when you create a transaction with this partner.

 SAP AG 1999

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Business Partners

Exercises

Unit: Business Partners Topic: Business Partner Grouping

• Creating a new business partner in the system • Assigning a grouping to the business partner

Before you can conclude financial transactions with a business partner, you must create the partner in the Basic Functions area of the application. To do this, you must first make the corresponding settings in Customizing.

1-1

Is it currently possible to create a business partner with the business partner grouping "TR01" and your own name "BPXX"? __________________________ YES __________________________ NO

1-2

© SAP AG

In Customizing, create a business partner grouping that allows you to assign an external business partner name with alphabetic characters (number assignment). Name the grouping G-XX (choose "DEBI" for the account group).

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Unit: Business Partners Topic: Roles / Functions

• Creating a new business partner in the system • Assigning roles and functions to the business partner.

You want to create a new business partner with whom you can conclude treasury transactions. To do this, you must assign the role "Treasury partner" to your partner.

2-1

In future, you want to conclude transactions with the business partner BPXX. Create the partner "BPXX" as an organization (initially without roles). Use your own grouping G-XX.

2-2

Call up the various views using the tabs, or by choosing Goto -> Central data / General data / Company code data. (Note: Only the Central data and the role overview can be displayed.)

2-3

To conclude money market, foreign exchange and derivatives transactions, assign the role of Treasury partner to the business partner. Call up the various business partner views again. (Note: Now - after adding a role - you can call up the General data and Company code data views.)

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Unit: Business Partners Topic: Additional data

• Creating additional data for a business partner.

You want to enter additional master data for your business partner, such as additional addresses, information about relationships with other business partners, or the business partner's credit standing.

3-1

Add the following information for your business partner BPXX: − Specify that the business partner in the role of treasury partner is a "domestic treasury partner" (-> Role type). − BPXX is a subsidiary of the existing business partner BP00 (-> outgoing relationship). Define this relationship more precisely as a "very important subsidiary" (-> Relationship type). − The business partner has a standard address and an alternative address. − The partner's credit standing is very good. − The legal form of the organization is a "Limited company" (Ltd). (If necessary, enter account 140000 as the reconciliation account.)

3-2

© SAP AG

You want to allow money market and foreign exchange deals with partner BPXX. In the derivatives area, only interest rate swaps should be permitted. Assign corresponding authorizations to the partner in the application.

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Business Partners

Solutions

Unit: Business Partners Topic: Business Partner Grouping

1-1

Is it currently possible to create a business partner with the business partner grouping "TR01" and your own name "BPXX"? _________________________ YES _______________ X _______ NO No. The number range assigned to the grouping "TR01" has internal number assignment. As a result, the system does not permit you to enter your own name. Application: Treasury Treasury Management Basic Functions Master Data Business Partner Create

1-2

Creating a grouping Customizing: Treasury Treasury Management Basic Functions Business Partners Control Data Define Business Partner Groupings Choose New Entries (button) or copy the entry "TR02" and make the changes. Enter G-XX and the number range "02", choose the account group "DEBI", and save your entries.

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Unit: Business Partners Topic: Roles / Functions

2-1

Creating "BPXX" as a business partner: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Create Enter the business partner name and the grouping G-XX. Do NOT enter a role category. Then enter the data for your new business partner (name, language, country, address ID, street, city, postal code and country). Save your entries.

2-2

Call up the various views using the tabs, or by choosing Goto -> Central data / General data / Company code data. Application: Treasury Treasury Management Basic Functions Master Data Business Partner Create / Change Goto ... Since you have not yet assigned a role category, you cannot display or enter data in the General data and Company code data views.

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2-3

Assigning the role "Treasury partner" to your partner: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Create / Change Goto - General data Role overview Button: Add role category (1000) Now - after adding a role - you can call up the General data and Company code data views.

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Unit: Business Partners Topic: Additional Data

3-1

Adding data for business partner BPXX: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Change Goto ... Enter your data and save your entries.

3-2

Business partner authorizations: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Standing Instructions Transaction Authorizations Enter your company code and maintain the authorizations using the Change or Enter buttons.

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Banks

Contents: Banks - general Business partner - bank details House banks + corresponding bank accounts + general ledger accounts Transaction - payment details

 SAP AG 1999

© SAP AG

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Banks: Unit Objectives

At the conclusion of this unit, you will be able to: Configure the whole banking environment in the SAP System Differentiate between banks in general, business partner banks, and house banks Define the cash management account name for displaying the account balances in Cash Management

 SAP AG 1999

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Overview of Treasury Management Organizational Units Business Partner Banks Transaction and Position Management - Preparation Transaction and Position Management - Structure Transaction and Position Management - Process Payment Program for Payment Requests Market Data Management Information System  SAP AG 1999

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5-3

Banks: Business Scenario

In order to post flows that involve incoming or outgoing payments, you have to specify payment details in the transaction. Before you can enter payment details in the transaction, you have to enter bank data in the system. You then assign the bank details to the business partners you have already created. You need these bank details to make actual payments to a partner. You create the banks, where your company keeps it own accounts, as house banks.

 SAP AG 1999


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Transaction: Payment Details

BP bank details Bank Account

Bank data

House bank House bank account

Entered in transaction manually

Conclusion of a transaction with business partner A + Payment details Posting/Payment

 SAP AG 1999

To record the data for accounting purposes, you have to post the flows on the corresponding dates. The system requires the following payment details to post the flows that are linked to incoming and outgoing payments: Your own bank details: house bank and account (number) The bank details of your business partner (if required): bank and account (number) The system uses the payment details to post the flows to the specified house bank account, and to write the business partner's details to the corresponding payment medium (via the payment program and the print program).

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Banks - General: Master Data

Bank country DE Bank key Address Bank name Region Street City Branch Control data SWIFT code Bank group Post bank account Bank code

Bank data

Banks - general... Bank country Bank key Address Bank

DE 200 500 00 Bank C Region Street City ......

200 500 00 Dt. Bank

200 500 00

... Used as:

Partner bank

(Account 889613262)

House bank

(Account 12345678)

 SAP AG 1999

You maintain the business partner bank details and your own bank details centrally in a "bank data pool”. The bank data you enter is maintained in the bank directory in Financial Accounting. You either enter the data manually, or have it generated automatically. It can be accessed across the whole system. Bank master data is contained in the bank directory. This includes the address data for the banks and control data, such as the SWIFT code or the bank group. The bank directory must contain the master data of all the banks that you require for payment processing. This includes your own house banks and the banks of your business partners. The bank data you have created (name, address, bank number ...) can then be used to maintain: Partner banks - bank details of your business partner House banks - your own bank details with the corresponding link to R/3 Financial Accounting.

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Business Partners: Central Data - Bank Details

Business partner A Central data

Bank details Ctry

Bank data

DE

Bank key 600 501 01

Bank account

PBank

5214561

A1

18889

B1

889613262

C1

Bank A

DE

100 500 00 Bank B

DE

200 500 00 Deutsche Bank

 SAP AG 1999

You enter the bank details for the banks used by each business partner. This involves entering the country, a relevant bank key, and a bank account. Each set of bank details has a unique partner bank key (PBank). Example: "B1" encodes the following: Business partner A has an account with the number 18889 at Bank B. The bank key is 100 500 00. When you maintain the bank details for the business partner, the system takes the bank name from the bank data pool when you enter the country and bank key, if this data already exists. If you enter a country and bank key in the bank details for a bank that does not yet exist in the bank data pool, a dialog box for entering general bank data appears, enabling you to add this new bank to the bank data pool.

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House Banks: Master Data Bank data

Bank Bank data data Company code

1000

House banks

Bank country Bank key Address Bank Region Street City Branch Control data SWIFT code Bank group

DE 200 500 00 Dt. Bank

Related bank accounts: 12345678 ...  SAP AG 1999

You create the banks at which your company has keeps its own current accounts as house banks. When you maintain house banks, the system takes the bank name from the bank data pool when you enter the country and the bank key, if this bank data already exists. If you enter the country and the bank key for a house bank that does not yet exist in the data pool, a dialog box for entering general bank data appears enabling you to add the house bank to the data pool. You assign the accounts you keep with the house bank accordingly.

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House Banks: Create Master Data Company code

1000

House bank

DEUBA

Bank country

DE

Bank key

200 500 00

Chart of accounts

Related bank accounts

Bank account data Account ID Bank acct Currency

GIRUN 12345678 UNI

G/L account

113100

 SAP AG 1999

You maintain the house banks in a particular company code. Each house bank has a specific house bank ID. For each house bank, you have to enter the bank accounts kept with that bank. Each bank account is identified by an account ID you can assign yourself. This key is unique for each company code, house bank, and account. Short names are used to make it easier for you to enter your own bank details in transactions. An internal general ledger is usually kept in Financial Accounting for each account kept with the house bank. You can establish a link in the system between the (external) house bank account and the (internal) general ledger account by assigning the accounts appropriately.

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General Ledger Accounts

FI general ledger Company code

1000

G/L account Chart of accounts

113100 INT

Name

Dt. Bank

: Account currency : : Bank/finance details House bank Account ID Cash Mgmt level

UNI

Deuba GIRUN F0

 SAP AG 1999

The R/3 general ledger account you enter for maintaining the house bank first has to be created in FI as master data. Here, you define the account currency details as well as the Cash Management level at which the amounts posted to this account are displayed in Cash Management.

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Transaction: Payment Details - Data

Conclusion of a transaction with business partner A + Payment details Example: Fixed-term deposit

Transaction: Payment Details Company code Product type Transaction type

D -

Curr. UNI UNI

 SAP AG 1999

1000 51A 100

Fixed-term deposit Investment

Effective FTyp House bk Deuba Deuba

Acct ID GIRUN GIRUN

Pmnt Payer/ee PBank

Posting

The transaction and position management process not only enables you to enter transaction data, but payment details too (i.e. the data required for payment processing): D:

Direction of the payment flow ("+": incoming payments; "-": outgoing payments).

House bk: House bank via which payments are processed in this transaction in the form of the defined house bank ID. Acct ID: Bank account at the house bank via which the payments in this transaction are processed, in the form of the defined account ID. PBank:

Bank details (bank key and account) of the business partner via which the payments in this transaction are processed in the form of the defined partner bank ID.

The system supports multi-level payment methods. By entering a bank chain, you can process payments via several banks. You can use up to 3 intermediary banks.

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Define Cash Management Account Name

IMG: Cash Management CoCd 1000 . . .

CM acct

G/L acct

DB Dollar

Bank account Description

113150

110113150

Deuba Dollar account

Cash position / Group Account DB Dollar . . .

CC

04/03//YY

1000

1,000

04/04/YY 1,011

 SAP AG 1999

The amounts posted to the general ledger accounts are displayed in Cash Management at the cash management level assigned in the FI accounts master data. You can enter the related account in CM with the (general ledger) account number. Alternatively, if you maintain a cash management name for the account, you can use this. The cash management account name replaces the account number in the cash position with a descriptive name. It is used there for all transactions and reports (such as cash management position) instead of the account number. Example: Amounts in G/L account 113150 are displayed in Cash Management: If the cash management account name has not been maintained: Account 113150

Amount 1,000

If the cash management account name has been maintained: Account 113150

© SAP AG

Amount 1,000

AC810

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Banks: Unit Summary

You have seen how to enter bank data in the SAP System manually. You can also import bank directories from various countries into the system automatically. If you conclude financial transactions with business partners with whom you do not have a current account (where payments cannot be settled internally), you must enter the partner bank details in the partner master record. You also have to set up the house banks and the corresponding bank and general ledger accounts in the system.

 SAP AG 1999

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Banks Exercises Unit: Banks Topic: Setting up banks / house banks

• Setting up the entire banking environment in the SAP System.

After configuring your business partners, you now want to define the banks in the system. These include “general banks” and “house banks”. House banks are banks with which you have at least one current account.

1-1

Create the banks AXX and BXX. The bank keys must be 8 characters long. The banks are in Germany.

1-2

Change your business partner "BPXX" by assigning the bank details to this partner. Enter AXX and BXX as the bank type. These entries are required for the payment details and the payment program.

1-3

Create the following general ledger accounts. You create the accounts in the Financial Accounting menu in the General Ledger section. Enter your company code and the account number, and copy the relevant account from company code TR00. Save your entries: 116100 Giro/UNI

116105 Clearing/UNI

116300 Giro/USD

116305 Clearing/UNI

116113 Giro/USD

116114 Fixed-term dep./USD

1-4

Define the CXX bank as a house bank with the bank accounts GIRUN/UNI (116100) and GIRUS/USD (116300).

1-5

Create a fixed-term deposit with business partner BPXX. Check the payment details.

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Banks Solutions Unit: Banks Topic: Setting up banks / house banks

1-1

Create the banks AXX and BXX Application: Treasury Treasury Management Basic Functions Master Data Banks Create Enter the bank country and an 8-character bank key of your choice. Then enter the address details (including bank AXX).

1-2

Enter the bank details for business partner "BPXX" Application: Treasury Treasury Management Basic Functions Master Data Business Partner Change Goto - Central Data Bank Details Enter the bank country, the 8-character bank key, an external bank account number (that you can assign yourself), and a bank type (such as AXX). Set the collection authorization indicator. You have now assigned both new banks to your new business partner. The banks appear under the bank details for the partner. Since the bank details are a "customer account view", a customer is created in FI automatically when you save your entries.

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1-3

Create the following general ledger accounts. Application: Financial Accounting General Ledger Master Records Individual Processing In Company Code Use the accounts specified as a reference by choosing the Create with reference pushbutton. Delete the alternative account numbers.

1-4

Define house bank with bank accounts Application: Treasury Treasury Management Basic Functions Master Data Banks House Banks Button: Create bank Enter the house bank CXX and the bank country DE, followed by a bank key. If you enter a bank key that already exists in the SAP System, the data for this bank key will appear as a default. If it does not already exist, enter new address data for your new house bank. Button: Create account Enter the account ID GIRUN or GIRUS and enter a description. You can enter an external account number of your choice in the bank account field and UNI or USD in the currency field. In the G/L account field, enter the account 116100 or 116300.

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1-5

Create a fixed-term deposit with business partner BPXX. Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create Enter your data Tab: Payment details There are no payment details. However, you can create them using the F4 possible entries function. In the next unit, you will learn how to set up the system so that this data appears automatically.

© SAP AG

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5-17

Transaction and Position Management: Preparation

Contents: Standing instructions

- Authorizations - Payment details - Correspondence - Derived flows

Currencies Reasons for reversal Limit management

 SAP AG 1999

© SAP AG

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6-1

Transaction and Position Management: Preparation: Unit Objectives

At the conclusion of this unit, you will be able to: Outline the necessary preparations for transaction and position management in the SAP system and make the corresponding settings Set up limit management

 SAP AG 1999

© SAP AG

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© SAP AG

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6-3

Transaction and Position Management: Preparation: Business Scenario

You conclude financial transactions with the same business partner on a regular basis, and want the values for certain fields to be proposed automatically by the system. To do this, you define standing instructions for payment details, correspondence, and certain derived flows. You want to enter currency master data and define certain reversal reasons. You also want to set up limit management.

 SAP AG 1999


© SAP AG

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Standing Instructions: Overview

Business partner A

Payment details

Correspondence

Derived flows

Assign

Assign

Assign

- House bank and related bank account - Business partner bank details  SAP AG 1999

- Confirmation - Derivation procedure - Print - Fax - SWIFT, IDOC - E-mail - Counterconfirmation

Payment details contain all the relevant information for payment processing, including your own (house bank) account and the business partner's bank details (as required). You can maintain different sets of payment details for the partner for each currency. In the standing instructions, you assign the payment details to the transactions for which these settings are relevant. You can assign the payment details at different levels (contract type, product category, transaction type). When you conclude a transaction with business partner A, the system automatically inserts the payment details defined for that particular transaction in the standing instructions. This saves you from making the entries manually. The standing instructions for correspondence control how external correspondence with a certain business partner is processed. You assign the correspondence medium to be used for this business partner (print, fax, e-mail, IDOC, SWIFT) to the various transactions at the required level (from the contract type down to the transaction type). These entries are compulsory if you want to generate correspondence for your business partner. You can use derived flows in the money market, foreign exchange, derivatives and securities areas to simplify the calculation of amounts that depend on other flows (such as tax amounts). To generate derived flows, you must assign a derivation procedure to the relevant partner.

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6-5

Business Partner Standing Instructions: Payment Details

Business Partner: Standing Instructions - Payment Details Currency BP A

Payment details ID

House Account bank ID

......

......

......

......

......

......

......

UNI

01

Deuba

GIRUN

......

USD

01

Deuba

GIRUS

......

Assign

Payment details ID

Treasury Money Market

Outgoing Incoming

Fixed-term deposit 51 A 100 200

Fixed-term dep. Investment Borrowing

x

01

x

01

Deposit at notice  SAP AG 1999

The system uses the house bank and account ID defined in the standing instructions for the business partner to identify the relevant bank account for posting. Once you have created the payment details, remember to ASSIGN them to transactions. This allows you to direct the postings for different products or payment directions to separate accounts. The system supports multiple level payment methods. By entering a bank chain, you can make payments via several banks. Up to 3 intermediate banks are supported.

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6-6

Standing Instructions: Payment Details

BP bank details Bank Account Assigned

BP bank details Bank Account

House bank House bank account

House bank House bank account BP A: Standing instructions (SI) - Payment details -

Entered in transaction manually

Conclusion of transaction with business partner A + Payment details

Proposal from SI Payment details in the transaction

Posting / Payment  SAP AG 1999

Standing instructions for payment details: Example: Standing instructions for payment details are not maintained: The details for posting and payment have to be entered manually in the transaction. Standing instructions for payment details are maintained: When a transaction is created, the system inserts the payment details that have been assigned to that particular type of transaction for the partner as proposals.

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6-7

Transaction: Correspondence

Confirmation

Confirmation

Internal

External

Fax

Example: Confirmations via fax, e-mail, SWIFT

Example: Dealing slip

 SAP AG 1999

Correspondence is used to document and reconcile the transactions concluded. You can define internal correspondence types (such as dealing slips) and external correspondence types (such as confirmations). By performing a correspondence run, you can confirm all the financial transactions you have concluded with a partner in a given period. You can output the correspondence data in various ways: print, send a fax directly from the system, e-mail, and IDOC. To send e-mails, you must set up the communication interface SAPconnect. For money market and foreign exchange transactions you can generate SWIFT files MT320 (fixed-term deposits) and MT300 (forex). A user exit allows you to use the FX Match function for outgoing confirmations (MT320 only). You can control the correspondence types for external correspondence in the partner-specific standing instructions for correspondence. Control of internal correspondence types is independent of the business partner. In Customizing for the product types, transaction types, and activities you control when (in other words, at what point) correspondence is generated. You can also specify whether correspondence should be generated automatically when a transaction is created, changed, or reversed (in other words, as soon as a transaction is saved). In the financial transaction, the system keeps a record of the correspondence that has been created. The system also keeps a record of the confirmation status in the transaction. This includes information about when the confirmation was sent/received, the relevant activity, the clerk, the form used, and the output type of incoming or outgoing confirmations.

© SAP AG

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Correspondence: Customizing 1) Define correspondence types Correspondence type

001

Description

Confirmation

General Internal correspondence type E Archiving (optical archive) E Suppress initial reversal correspondence Language ...

2) Define correspondence activities Company code

1000

Money Market: Forms

...

PTyp

Product type name

51 A 51 A 51 A 51 A

Fixed-term deposit: External Fixed-term deposit: External Fixed-term deposit: External Fixed-term deposit: External

TTyp ACat Corr. type 10 001 100 100 10 002 100 11 001 100 11 002

Form F_TR_CONFIRM_ALL F_TR_DEALER_ALL F_TR_CONFIRM_ALL F_TR_DEALER_ALL

Aut.cor. CConf.

E E

3) Change message control Example: 6 Transaction not yet confirmed and counterconfirmed  SAP AG 1999

You define the relevant correspondence types (such as confirmation, dealing slip) in Customizing for the relevant area under Functions --> Correspondence --> Define Correspondence Types. The Internal correspondence type indicator determines whether the correspondence type should be external (allowing partner-specific settings in the standing instructions) or internal (independent of the partner). You then define the correspondence activities for the respective area and company code. In this Customizing step you also specify whether counterconfirmation is required. You can change the correspondence forms using the SAP word processing program SAPscript. If you change the existing forms in SAPscript and save them under a new name, you must maintain the new forms in the Customizing step Define Correspondence Activities. Message control enables you to influence transaction processing. You can set up the system to ignore messages or checks depending on the user, or to block further processing by defining error messages (E message).

© SAP AG

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Business Partner Standing Instructions: Correspondence

BP A

Correspondence

Correspondence type: External

Treasury Assign

Print

Fax SWIFT Alt. addr. CConf.

Money Market Fixed-term deposit 51 A Fixed-term dep. 100 Investment 200 Borrowing Deposit at notice 51 B Call money 100 Investment 200 Borrowing

 SAP AG 1999

You control the (external) correspondence with a particular business partner by defining standing instructions for correspondence. In the standing instructions for correspondence, you assign correspondence media and parameters to the external correspondence types for a business partner. You can make this assignment at several levels: contract type, product category, ... down to the transaction type. You can choose between different correspondence media. You can print the forms, or send external correspondence directly from the R/3 system (for example as a fax, or in SWIFT format). Correspondence parameters: Correspondence is automatically sent to the business partner's standard address. If you want to use a different address for the partner, enter the correct key in the Alternative address field. If you require counterconfirmation from your business partner, set the CConf. indicator. (Prerequisite: Your Customizing settings allow automatic correspondence) In the financial transaction, the system keeps a record of the correspondence that has been created.

© SAP AG

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Transaction: Derived Flows

You can define derivation rules for certain flows to generate new, dependent flows Flow 1200 Interest

Derivation rule

UNI 1,000.00

Flow 1800 Tax 1

UNI

300.00

Flow 1801 Tax 2

UNI

16.50

 SAP AG 1999

You use derivation procedures to generate certain flows automatically. These flows are calculated on the basis of other financial flows in the system. When you process the original flow, the system generates the dependent (or derived) flows automatically. Example: A tax of 30% (tax 1) is deducted from the nominal interest (flow type), and a tax of 5.5% (tax 2) is deducted from tax 1 (in other words, 1.65% of the nominal interest amount). The interest condition in the transaction generates an interest flow with the flow type 1200. At the same time, the system adds the following flows to the cash flow on the basis of the derivation procedure: Tax 1 (flow type 1800) Tax 2 (flow type 1801) You can then process all the flow types (original and derived). For example, you could offset the corresponding amounts when you make the interest posting.

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Derived Flows: Customizing

Define Derivation Procedures Proc.

Description

Tax1

Capital gains tax

Define Derivation Rules

Effective

Inc. FType

01/01/YY 01/01/YY 01/01/YY+1

1200 1800 1800

ID

Derived FType

+ -

DD

1800 1800 1801

-

Perc. rate 30.0 7.5 5.5

 SAP AG 1999

To define a derivation procedure in Customizing, you first enter a name. Secondly, you define derivation rules for each derivation procedure. Specifications: Original (incoming) flow (type) Direction of the original flow type Flow (type) to be derived Direction of the derived flow Derived flow amount, expressed as a percentage of the original flow

© SAP AG

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Business Partner Standing Instructions: Derived Flows

BP A

Derivation procedure

Treasury Assign

Money Market Fixed-term deposit 51 A Fixed-term dep. 100 Investment 200 Borrowing

TAX1

Deposit at notice 51 B Call money 100 Investment 200 Borrowing  SAP AG 1999

In the application you specify when a particular derivation procedure should apply for a certain business partner. You can assign the derivation procedure at different levels (from the contract type down to the transaction type). If you create a transaction with a business partner, and have assigned a derivation procedure to this partner at the corresponding level, the system generates additional flows on the basis of the derivation rules you have defined.

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Currency Master Data

Rate types

CURRENCY

1 = Current rate M = Middle rate G = Bid rate

Translation ratios

From To Trans.ratio ITL UNI 1000 : 1

Maintain exchange rates

RType From To Rate M ITL UNI 1.20

Calendar

Leading currencies

Currency UNI

Cal. Cal. ID 01

Lead. curr. curr. Foll. Foll. curr. ITL UNI

 SAP AG 1999

You use the rate type to define exchange rates for different purposes. This allows you to enter various rates for the same date. The system uses the rate type "M" for currency translation when it posts and clears documents. This rate type must be defined in the currency master data. The translation ratios denote the measurement units for the exchange rates. Example: An exchange rate from ITL to UNI with the above exchange ratio means that 1000 ITL cost x UNI. In the productive system, you call up the Customizing tables for maintaining exchange rates from the application (menu: Environment -> Market Data -> Manual Market Data Entry -> Enter Exchange Rates). You enter the current exchange rate, specifying the rate type, currency pair, and valid from date. In the above example, the middle rate for 1000 ITL is 1.20 UNI. Treasury specific settings affect the calendar and the leading currencies: Calendar: You assign a calendar to each currency. When you create a new transaction, the system uses the calendar assigned to the transaction currency as the basis for the working day check. When you enter an exchange rate in a transaction, the system uses the definitions for the leading currency and following currency to read the rate correctly. Example: An exchange rate of 1.20 can be read as 1.20 UNI for ITL (leading currency ITL, following currency UNI), or as the price in ITL for UNI.

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Reasons for Reversal

Treasury: Reversal reasons

Company

M

Document

01

Reversal due to processing error

02

Reversal due to Customizing error

03

Reversal due to condition adjustments

04

Reversal for other reasons

2.500  SAP AG 1999

Reversal: Resets the last change made to the transaction (in other words, the last transaction activity recorded by the system). To reverse posted flows for a financial transaction, you must first reverse the transaction activity. The system then earmarks the posted flows to indicate that the corresponding documents have to be reversed. You have to define the possible reversal reasons in Customizing. (The FI reversal reasons are relevant for reversing posted documents).

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Limit Management Limit update dependent on the following characteristics: Company code Trader Business partner

Limit utilization Business partner: Dt.

Currency

Limit: 100 m

Portfolio

Free (+) / Excess (-): 70 m

Utilization: 30 m

Limit product group Country key Industry key Rating indicator

As an offline report

 SAP AG 1999

The limit management functions allow you to set differentiated limits for the transactions you conclude and monitor the amounts utilized. These utilization amounts reflect the transaction volume based on the transaction position for a key date. The limits you define are based on limit characteristics, which you can combine as you require. You can control which product types or transaction types should be included for a particular limit type using the characteristic "limit product group". You define limit product groups yourself, and then assign them to the product types or transaction types for money market and foreign exchange transactions, currency options, loans, and bonds in the securities area. This enables you to examine limits (risks) in greater detail. Example: You define a limit product group containing the transaction type fixed-term deposit (investment and borrowing), and then combine this limit product group with the characteristic "business partner". This allows you to set a limit for fixed-term deposit transactions with a particular business partner. You also need to define how the system should treat asset-side and liabilities-side transactions when it calculates the utilizations (separately, cumulative, or netted). You can call up the current utilizations and the free amount for a limit in an overview, which is linked to the ABAP List Viewer. You can still branch from the limit amounts to the limit utilizations. You can define limits for specific periods.

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Limit Management: Examples

Limit type: L1 : Limit characteristic: Bus. partner:

Char. values

Limits

Dt. Bank

100 m

Dres. Bank

90 m

Limit type: L2 : Limit characteristic: Limit product group Total Total Total

FTD FX DE

(Fixed-term deposit) (Foreign exchange) (Derivatives)

70 m 50 m 70 m

Limit type: L3 : Limit characteristics: Partner / limit product group L2 70 Dres. 90

FTD 50 Dt. 100

FTD 40

L1

Dt. Bank

FTD FX DE

50 m 40 m 60 m

Dres. Bank

FTD FX DE

40 m 30 m 50 m

L1 L3

 SAP AG 1999

You set limits for a combination of limit characteristics. By combining these limit characteristics in different ways, you can define a wide range of limits. For each of the characteristics assigned to a limit type, you specify characteristic values. You then assign a limit amount to these values (the combination of these values). Above examples: L1: Limit type 1 - Business partner limit With the business partner Deutsche Bank you can conclude transactions up to 100 million UNI (money market, forex spot, forward exchange, currency options). L2: Limit type 2 - Limit for product/transaction type You can conclude fixed-term deposits up to 70 million UNI (total for all partners). L3: Limit type 3 - Limit for a partner/transaction You can conclude fixed-term deposits up to 50 million UNI with the business partner Deutsche Bank.

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Limit Management: Overview Customizing: Define limit type: L3

Assign

Limit characteristics - Characteristic 1: Business partner (BP) - Characteristic 2: Limit product group (LPG) Prerequisites: 1. Define LPG 2. Assign LPG to product type / transaction type

Application: - Process limits for limit types: Limit type L3: BP Dres. Bank Dt. Bank Dres. Bank ... - Generate utilizations - Overview of utilizations

LPG FTD FTD FX

Amount 40 m 50 m 30 m

 SAP AG 1999

Customizing: When you define a limit type, you specify the combination of limit characteristics upon which the limits and limit utilizations should be based. You must also specify whether the system should calculate transactions on the assets and liabilities sides separately when the utilizations are calculated, or whether the amounts should be cumulated or netted. If you use the characteristic "limit product group" you can restrict the limit to certain transactions. Application: For each limit type, you enter values for the combination of characteristics and and set the limit amounts. The report Generate Utilizations calculates the utilizations for all the limit types for a certain key date. You can schedule this report as a job. The selections Risk of default and Foreign currency risk determine how forex transactions are counted towards the utilization amount. The report Overview of Limit Utilizations shows the limits next to the amounts currently utilized and the free amounts. Amounts that exceed the limit are highlighted in color.

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Transaction and Position Management: Preparation: Unit Objectives

To reduce your workload, you have created partner-specific standing instructions. You have maintained the relevant currency tables for foreign exchange transactions. You have defined several limit types and entered corresponding characteristic values. This allows you to run evaluations based on different criteria to identify when limits have been exceeded.

 SAP AG 1999

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Exercises

Unit: Transaction and Position Management: Preparation Topic:


• Preparation activities for transaction and position management

You can simplify the entry process by letting the system propose certain values when you enter transactions. To do this, you define standing instructions.

1-1

Create standing instructions for your business partner BPXX for the currency UNI. You want to make payments from your current account with house bank CXX using the payment request function. The payment details ID is I-XX and applies for all payments resulting from money market and foreign exchange transactions. The payer/payee is the business partner itself. You can choose the partner bank (AXX or BXX). You want to make outgoing payments by bank transfer, and collect incoming payments by direct debit. Remember to assign the payment details to incoming and outgoing payments.

1-2

© SAP AG

Create another fixed-term deposit with your business partner BPXX. Check the payment details.

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Unit: Transaction and Position Management: Preparation Topic: House Banks and Business Partners

• Creating a house bank as a business partner and making the relevant settings Often, a house bank is also a business partner. If this is the case, you create the bank as a house bank, and then create it as a business partner.

2-1

If you want to conclude transactions with your house bank, you must create your house bank as a business partner. Create a partner for your own house bank. Use the business partner name "CXX". (Grouping G-XX, role category 1000 (treasury partner)

2-2

You intend to conclude money market, foreign exchange and derivatives transactions with your house bank. Set up the authorizations in the application.

2-3

Define the standing instructions for payment details for your new business partner CXX - for the currencies UNI and USD. (Standing instructions for payment details: Since the house bank will debit your payments from your account itself, the entries for the partner bank and payment method are not relevant. Relevant fields: Currency, house bank ID, and account ID. Assignment for incoming/outgoing payments).

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Business Partner Standing Instructions: Correspondence

• Defining other standing instructions

Once you have made the correspondence settings in Customizing, you need to define the correspondence details for each business partner.

3-1

© SAP AG

Set up standing instructions for correspondence with your business partners BPXX and CXX for money market and foreign exchange transactions. The principal correspondence medium in all cases should be the printer.

AC810

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Unit: Transaction and Position Management: Preparation Topic: Business Partner Overview

• Obtaining an overview of the settings for a business partner

What entries have you made for your business partner?

4-1

© SAP AG

Finally, take another overall look at your business partners BPXX and CXX. Call up the master data, role data, address data, credit standing data, and bank data. Also look at the standing instructions.

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Solutions


1-1


Creating standing instructions for your business partner BPXX: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Standing Instructions Payment Details Enter your data

Field name or data type

Values

Currency

UNI

Payment details ID

I-XX

House bank ID

CXX

Account ID

GIRUN

Payer/ee

BPXX

Partner bank

AXX

Payment request

Set indicator

Payment method

EU

Once you have entered a set of payment details, make the assignment for incoming and outgoing payments (button: Assign).

© SAP AG

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1-2

Creating a fixed-term deposit with your partner BPXX: Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create Enter your data Tab: Payment details The information for the payment details has been entered automatically. These are proposals that can be overwritten by the user.

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Unit: Transaction and Position Management: Preparation Topic: House Banks and Business Partners

2-1

Creating a house bank as a business partner: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Create Enter the business partner name CXX, the grouping G-XX, and the role category 1000. Then enter the data for your new business partner (name, language, country, address ID, street, city, postal code and country). Save your entries.

2-2

Assigning authorizations to your house bank - business partner: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Standing Instructions Transaction Authorizations Assign the corresponding transaction authorizations.

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2-3

Standing instructions for payment details: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Standing Instructions Payment Details Field name or data type

Values

Currency

UNI and USD

Payment details ID

01 in each case

House bank ID

CXX

Account ID

GIRUN and GIRUS

Once you have entered a set of payment details, make the assignment for incoming and outgoing payments (button: Assign).

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Unit: Transaction and Position Management: Preparation Topic: Business Partner Standing Instructions: Correspondence

3-1

Standing instructions for correspondence: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Standing Instructions Correspondence Correspondence type "001 - External confirmation" In each case, set the Printer indicator.

© SAP AG

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Unit: Transaction and Position Management: Preparation Topic: Business Partner Overview

4-1

Overall view of business partners BPXX and CXX: Application: Treasury Treasury Management Basic Functions Master Data Business Partner Display Treasury Treasury Management Basic Functions Master Data Business Partner Standing Instructions Payment Details Call up the master data, role data, address data, credit standing data, and bank data. Also call up the standing instructions. Look at the differences between these two business partners: BPXX, to which you actively make payments, and CXX, which is also a house bank.

© SAP AG

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Transaction and Position Management: Structure

Contents Product types/categories Transaction types/categories Activity categories Processing categories Flow types/categories Condition types/categories Cash flow

 SAP AG 1999

© SAP AG

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7-1

Transaction and Position Management: Structure Unit Objectives

At the conclusion of this unit, you will be able to: Recognize the main Customizing terms and make the corresponding settings

 SAP AG 1999

© SAP AG

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© SAP AG

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Transaction and Position Management: Structure Business Scenario

Once you have configured the business partners, you need to make the Customizing settings for the respective financial transactions before you can enter transactions in the system.

 SAP AG 1999


© SAP AG

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Financial Transaction and Business Partner

CM

MRM

TM / LO

Prerequisites: Product type Transaction type

Prerequisites: Data authorizations Standing instructions

... Transaction

concluded

Position

Example: Fixed-term deposit with Business partner Bank X Trading / Back office / Accounting

Example: Interest accrual/deferral

 SAP AG 1999

Certain transactions are concluded with business partners on the basis of liquidity situation (CM) or risk situation (MRM) analyses, taking into account the risk and revenue goals predefined. Example: As a result of excess liquidity, a corresponding amount is created as a fixed-term deposit with business partner Bank X. You enter transactions on the basis of both the Customizing settings relating to the transaction architecture (product types, transaction types ...) and certain application data, such as the information that exists for the business partner (address, bank details ...).

© SAP AG

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Example: Create Financial Transaction

Company code

1000

IDES AG

Product type

60a

Forex EXTERNAL

Transaction type

101

Spot transaction

Partner

Deuba

Deutsche Bank

Specifications Portfolio Business transaction Order/Fixing

Contract

External number assignment Transaction

 SAP AG 1999

You create transactions with a business partner in a company code for a certain product type and a specific transaction type.

© SAP AG

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Customizing Structure: Money Market/ Forex/Derivatives Product cat.

Flow category/ Condition cat.

Calculation cat.

Condition type

Flow type

Transaction cat. (Activity cat.) Processing cat.

SYSTEM LEVEL Product type

Transactn type

USER LEVEL  SAP AG 1999

© SAP AG

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Product Categories - Product Types

Product category 510 600 610 620

Fixed-term deposit Foreign exchange Cap/Floor Swap :

010 Stock : 040 Bond :

SYSTEM LEVEL Product type - Fixed-term deposit - Forex external - Forex internal - Cap/Floor - Interest rate swap - Currency swap :

- Domestic stock - Foreign stock - Floater - Fixed-interest bond . . .


Product categories cover the basic types of financial borrowing and investment transactions and represent a classification of financial instruments. Product categories are predefined in the system, apply to all company codes, and may not be modified by the user. Product types represent a refinement of the product categories at user level and, unlike the product categories, they can be defined by the user. When you define a product type, you specify the business framework that applies to financial transactions of this product type. A product type is assigned to just one product category, but it is possible to have several product types that refer to the same product category. You create and process your own financial transactions on the basis of product types. You use product types to Assign various processing methods Select reports Assign various structure characteristics Assign various valuation parameters (such as different yield curves) in Market Risk Management.

© SAP AG

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Product Categories - Product Types: Examples Product categories

Financial instruments

Product types

Money market

510 520 530 540

Fixed-term deposit Deposit at notice Comm. paper Cash flow transaction

Fixed-term deposit Fixed-term deposit

Foreign exchange

600

Forex

Forex

Derivatives

610

Cap/Floor

620

Swap

Cap Floor Interest rate swap Currency swap

630 700

FRA Futures

FRA Securities futures

750

Listed options

Stock option Index option

760

OTC Option

 SAP AG 1999

EXTERN INTERN

Swaption Currency option (OTC) Currency barrier option IRG

Product categories are predefined in the system. You can define your own product types for the individual product categories.

© SAP AG

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Define Product Type: Example - Forex

Product type

60A

Text

Forex external

Product cat.

600

Foreign exchange

 SAP AG 1999

Product types represent the financial transactions that are used in your company. Examples of product types in the Money Market area are fixed-term deposits or deposits at notice. If you do not want to use the standard product types delivered with the system, you can define product types of your own. This allows you, for example, to carry out different evaluations or to specify different processing rules for internal and external transactions. Product types contain information about the structure characteristics. When you define a product type, you specify the business framework that applies to financial transactions of this product type. You use product types as a basis for managing your positions and for creating and managing your financial transactions.

© SAP AG

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Define Product Type: Example - Currency Option

Product type

76A

Text Prod. category

Currency option (OTC) 760 OTC options

Option / Future Number range Settlement Quotation type Settlmnt method Exercise type Option category

01 1 2 1 2 1

Underlying Product type 60A Transactn type 101 No. underlyings 1

 SAP AG 1999

When you define product types, the data you enter differs according to which financial instrument you use. For example, when you define product type "Currency option" , you have to enter data in the fields for the underlying transaction.

© SAP AG

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Financial Transaction Types

Product cat. 510 Fixed-term deposit 600 Forex 610 Cap/Floor 620 Swap :

Product type - Fixed-term deposit - Forex external - Forex internal - Cap/Floor - Interest rate swap - Currency swap :

Transaction cat. 100 Investment 200 Borrowing 100 Forex transaction :

SYSTEM LEVEL Transaction type - Investment - Borrowing - Spot - Forward - Purchase - Sale - Swap :


A financial transaction type determines the type of transaction you can execute with a specific product type. It also controls the transaction and position management process. Examples of financial transaction types are the investment or borrowing of fixed-term deposits, spot transactions, or forward exchange transactions. You can use the basic transaction types delivered with the system, or refine these according to your company's requirements on the basis of financial transaction categories. You can define user-specific values for the Money Market, Foreign Exchange, and Derivatives areas. In the Securities and Loans areas, transaction types such as the sale or purchase of securities, are already represented in the system.

© SAP AG

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Customizing: Financial Transactions Product type

60A

Forex EXTERNAL

Trans. type

101

Spot transaction

Trans. cat.

100

Number ranges Transactions Offers

01 02

Underlyings Simulations

19 03

Back office Processing category 00101 ! Automatic posting release Limit management Limit group

 SAP AG 1999

You can uniquely determine a financial transaction by combining a product type with a financial transaction type, such as product type Foreign exchange with transaction type Spot transaction. This transaction passes through a series of activities in the company. When you define the transaction type, you specify a processing category. This determines how the transaction is processed (in other words, the sequence of activities). Example: You want spot transactions with product type 60A to be processed with the following activities: Order - Contract - Settlement.

© SAP AG

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Number Ranges for Transactions

Number range object Fin. transaction Company code 1000 IDES AG Ranges From number

To number

Current number

X 01

No

0000000000001

0000000099999

13

X 02

0000000100000

0000000199999

100000

X 03

0000000200000

0000000299999

200001

X 04

0000000300000

0000000399999

300028

X 05

0000000400000

0000000499999

400014

Ext.

 SAP AG 1999

The transactions entered in the application are managed with a transaction number in the system. When you define transaction types in Customizing, you enter a number range interval that corresponds to the number assignment in the application. You have to define this range beforehand and specify, for example, whether the numbers are to be assigned internally (by the system) or externally (by the user).

© SAP AG

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Activity Categories


Activity cat.

Transaction cat.

01 Order 02 Contract 03 Settlement :

100 Investment 200 Borrowing :

SYSTEM LEVEL Product type - Fixed-term deposit - Forex external - Forex internal - Cap/Floor - Interest rate swap - Currency swap :

Transaction type - Investment - Borrowing - Spot - Forward - Purchase - Sale - Swap :


In the Money Market, Foreign Exchange, and Derivatives areas, transaction activity categories control the activities that are possible for a particular transaction category. Example: Product category

Transaction category

Activity category

510 Fixed-term deposit

100 Investment

10 11 20 21

Contract Rollover Contract settlement Rollover settlement

600 Foreign exchange

101 Forex spot transaction

10 15 20 30

Order Order expiration Contract Settlement

The activity categories are displayed for information purposes in the financial transaction. They form the basis for the history. Even correspondence is managed on the basis of activity categories.

© SAP AG

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Transaction Types - Activity Categories: History

Company code Transaction Product type Transaction type Active status

1000 15001 60a 101 0

IDES AG Forex EXTERNAL Spot transaction Active

Acty

Activity category

Status

Transition function

0001 0002 0003 0004 0005

Contract Settlement

Replaced New entry Active Activity transition

 SAP AG 1999

When you process a financial transaction, it passes through several activities, which are indicated by activity information. Example: The activity "contract" indicates that a transaction is legally binding. The activity "settlement" indicates that the transaction data entered has been checked.

© SAP AG

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Processing Categories


Product type - Fixed-term deposit - Forex - Cap/Floor - Interest rate swap - Currency swap :

Transaction cat.

Activity cat. 10 Contract 11 Rollover :

100 Investment 200 Borrowing :

Processing cat. 101 Order - Contract - Settlement 102 Order - Contract

SYSTEM LEVEL Transact. type - Investment - Borrowing - Spot - Forward - Purchase - Sale - Swap :


The processing sequence of a financial transaction is determined by processing categories (Money Market, Foreign Exchange, Derivatives, Securities) or status transfers (Loans). Processing categories or status transfers determine the sequence of the individual activities within a financial transaction. They describe the processing steps involved in the respective areas of the company - from entering a transaction in the trading area, via processing it in the back-office area, through to transferring the data to Financial Accounting. As a result, you determine the company-specific chain of activities that a particular transaction has to pass through.

© SAP AG

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Customizing: Transaction Types - Processing Categories Product type

60A

Forex EXTERNAL

Trans. type

101

Spot transaction

Trans. cat.

100

Number ranges Transactions Offers

01 02

Underlyings Simulations

Back office Processing cat. 00101

19 03 Processing category 00101 = Order - contract settlement 00102 = Order - contract

! Automatic posting release Limit management Limit group

 SAP AG 1999

Processing categories are predefined in the system based on the product category and the transaction category. You select one processing category for the individual transaction types from a series of alternatives proposed by the system. Example: Fixed-term deposit

Foreign exchange

© SAP AG

Product category

Processing category

510 510

00001 Without settlement activities 00002 With settlement activities

600

00101 Order - contract - settlement 00102 Order - contract

AC810

7-18

Flow Types

Product category Transaction category

Condition cat.

Flow category

Nominal interest

10 - Principal increase

Final repayment :

A - Inflow TD - Dividend

Calculation cat. AA - Inflow TD - Dividend

SYSTEM LEVEL Product type

Condition type

Flow type

Transact. type

- Dividend - Bonus - Variable interest - Repayment - Int. rate adjustment - Repayment rate :

1000 - Buy foreign exchange 2000 - Sell foreign exchange ....


Flow types describe possible changes in cash flows. Flows are the basis for generating the cash flow in financial mathematics as well as further processing, such as posting. The cash flow contains all the flow records in chronological order and is used as a basis for updating transaction data to Financial Accounting, Cash Management, and Market Risk Management. Examples of typical flow types are fixed or variable interest, increases in nominal amount, or commission. You assign each flow type to just one flow category. However, several flow types can refer to the same flow category. For example, you can assign both variable and fixed interest to the flow category Interest. Payment flows for the cash flow and for posting are controlled by two indicators, which you have to assign to each flow type. The calculation category controls the financial mathematical processing of the flow for the cash flow. The flow category controls the way the flow is processed for accounting purposes. Flows are generated by the following: Conditions (e.g. interest flows), manual entries (e.g. charges), accrual/deferral runs (e.g. interest accruals/deferrals), or valuation runs (e.g. write-ups/write-downs). Examples of flow categories are accounting flows such as inflows (e.g. security purchase), outflows (e.g. repayment), expenses, or revenues. Examples of cash flows are purchases security purchases/sales, interest, repayment, or charges.

© SAP AG

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7-19

Customizing: Flow Types

Flow type

1000

Name

Buy foreign exchange

Control Classification Flow category Calculation cat.

Structure characteristics 10 Principal increase AA Inflow (generic)

! Relevant to CM ! Relevant to posting

! Relevant to position Relevant to P/L

! Relevant to valuation Rel. for accrual/deferral

Payment request ... Individual payment ...

 SAP AG 1999

You define flow types in Customizing: Classifications are predefined in the system and they subdivide the flow types according to their different business criteria (structure characteristic, accrual/deferral, valuation ...). The Relevant to CM indicator tells you whether the flow is updated in Cash Management. The Relevant to posting indicator tells you whether the flow is transferred to Financial Accounting. You select the Relevant to position/Relevant to P/L indicator to display the flows in drilldown reporting. The Relevant to valuation/Relevant for accrual/deferral indicator tells you whether the flow is included in a valuation run or an accrual/deferral run. The Payment request indicator tells you whether a payment request may or may not be generated for this flow. The Individual payment indicator tells you whether this flow requires only a single payment for a payment request.

© SAP AG

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Assign Flow Types to Transaction Types

Product type

60A

Forex EXTERNAL

Transaction type

101

Spot transaction

Flow type

1000

Buy foreign exchange

Direction

2

Incoming

 SAP AG 1999

© SAP AG

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7-21

Condition Types

Product category Transaction category

Condition cat. Nominal interest Final repayment :

SYSTEM LEVEL Product type Transaction type

Condition type - Dividend - Bonus - Variable interest - Repayment - Interest rate adj. - Repayment rate :

nge cha x e eign r for o f t No

USER LEVEL

 SAP AG 1999

Within SAP Treasury, financial transactions are represented on the basis of flow and condition concepts. Conditions are elements of a financial transaction that are defined in a contract. You can define different forms of interest, dividend, or repayment methods as condition types. By assigning condition types to product types/transaction types, you can ensure that the appropriate structure characteristics are assigned to each product type. Condition types therefore control which structure characteristics are displayed when you create a transaction (for a particular product type). Condition categories are the basis for processing condition types, and they refine the classification of flows and conditions. Examples of condition categories are principal increases, final repayments, or nominal interest. You define condition types on the basis of condition categories, and assign them to the related product/transaction type.

© SAP AG

AC810

7-22

Customizing: Condition Types

Condition type

1200

Name (short)

Nom. interest

Condition type text

Nominal interest

Name (long)

Nominal interest

Control Classification

Structure characteristics

Condition category

20

Nominal interest

Calculation category

TZ

Nominal interest

Generated flow type

1200

Nominal interest


 SAP AG 1999

You require conditions mainly for generating flows automatically. This means you must assign the flow types, which are elements of the cash flow, to condition types. As you do this, remember that condition types may exist, which do not generate any flows (for example, interest rate adjustment, repayment settlement).

© SAP AG

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7-23

Assign Condition Types to Transaction Types

Product type Transaction type

51A 100

Fixed-term dep. EXTERNAL Investment

Condition type

1200

Direction

0

Nominal interest

Incoming and outgoing


 SAP AG 1999

You can set up product/transaction types in a flexible way by assigning condition (and flow) types to them.

© SAP AG

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Financial Product "Fixed-Term Deposit": Example

1. Define product type

PXX

2. Define transaction type

TXX = Investment TZZ = Borrowing

with processing category 3. Define flow types

FXX1 = Principal increase FXX2 = Principal decrease FXX3 = Final repayment FXX5 = Interest

4. Define condition types

2xx1 = Final repayment 2xx2 = Interest

"Assign"  SAP AG 1999

You can set up product/transaction types in a flexible way by assigning condition (and flow) types to them.

© SAP AG

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7-25

Financial Transaction Architecture

Transfer flow

Product type

Valuation flow

Transaction type Business partner

History

Calculation bases

Conditions Conditions

er es t re pa ym en t

Conditions Conditions Conditions Conditions

Int

 SAP AG 1999

Posting information

Flows describing structure characteristics

Tr ad er Te rm

Ba

Cu rre

nc ie s

l. s he et ac ct

General info

Accrual/deferral flow

Payment information

When you create a financial transaction, its structure characteristics are used to determine the cash flow via the condition and flow types. This cash flow contains all the information that is relevant to a financial transaction in the form of flow records. For instance, the amount invested, the interest payments, and the repayments are concentrated in one or more flow records. The cash flow of a transaction is made up of flow records that can be generated in various ways: Flows entered manually, such as charges Automatically generated flow records are generated, for example, from conditions (via the flow types assigned to the condition type) as well as on the basis of accrual/deferral or valuation runs.

© SAP AG

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7-26

Financial Transactions: Cash Flow

Amount invested/ borrowed

Transaction

Basis for ACTUAL

Updating Cash Management Updating Financial Accounting using flexible account determination

Condition

Triggering payments PLANNED

Updating items Accrued/deferred interest Foreign currency valuation

Cash flow (example) Investment 4/1/YY 1m Interest

Yield calculation DEM made

7/1/YY 10 000 DEM anticipated

Repayment 7/1/YY 1m

DEM anticipated

 SAP AG 1999

The cash flow of financial transactions forms the basis for all trading, transaction management, and position management processes. It is also used for evaluation activities within Treasury. Financial mathematics are used to determine the cash flows in Treasury. You can display the cash flow both with posting information or with payment information. You can display the calculation bases for the amounts displayed, if required. The system provides a range of formulas based on the "building block principle", which take account of the flexible organization of the Treasury application. In Treasury Management, application-specific control programs call up central financial mathematical function modules, for instance, to calculate interest and repayment schedules. These FiMa function modules generate and calculate a series of flows known as a cash flow (payment flow) for a financial transaction in the application (e.g. stock purchase, swap) on the basis of the conditions assigned to a financial transaction and the specified calculation period.

© SAP AG

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SAP Financial Mathematics in Treasury Management: Process Flow INPUT FLOW RECORDS

INPUT

OUTPUT

CONDITIONS

FLOW RECORDS E.g. Principal increase Nominal interest Final repayment

E.g. Principal increase

E.g. Interest

USER LEVEL

SYSTEM LEVEL Flow records

Conditions

of SAP - FiMa

Control parameters

SAP - FiMa

Flow records or SAP - FiMa

Generation of a cash flow in the form of FiMa flow records

Functions

Calculate effective interest rate

Alternative effective calculations

Execute accrual/deferral

 SAP AG 1999

You either enter flow records manually or you let the system generate them from condition items as it does in other areas, such as discount calculation or accrual/deferral. The system first generates planned records, which become actual records as a result of posting activities. A flow record is defined by its type (e.g. interest or repayment) its calendar days (calculation, due date, planning date, calculation period) an amount defined in local currency (and foreign currency) It also contains posting information as an application flow record. Not only does a flow record have a flow type and a flow category as business characteristics, it also has a financial mathematical calculation category, which determines how it is processed in SAP's financial mathematics. When flow records are generated, dated 'flow record shells' are created. These incorporate all the data you need (such as the calculation period, period, interest calculation method).

© SAP AG

AC810

7-28

Transaction and Position Management: Structure - Unit Summary

By configuring the transaction master data, you have fulfilled additional requirements for creating financial transactions in SAP Treasury.

 SAP AG 1999

© SAP AG

AC810

7-29

Transaction and Position Management: Structure

Exercises

Unit: Transaction and Position Management - Structure Topic: Creating a New Product (Fixed-Term Deposit)

• Creating the master data to configure new product types.

You want to configure your own financial instruments in Customizing.

1-1

Set up your own fixed-term deposit product. Assign the product type the following ID: PXX (XX = your group number); with product category 510.

1-2

Define your own transaction types: − Check beforehand whether number ranges for transaction types have been defined for your company code. − Create a transaction type for a fixed-term deposit using TXX (XX = your group name) as the transaction type ID. Do not settle the fixed-term deposit. Use the number range ‘01’ for the transactions. You do not want users to be able to make offers or perform simulations. You do not want the posting to be released by a second user, but released automatically. Set the indicator accordingly.

© SAP AG

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1-3

Define the following flow types of your own for your fixed-term deposit: ID - Principal increase - Principal decrease - Final repayment - Interest capitalization - Nominal interest - Charges - Commission

FXX1 (XX = your group ID) FXX2 FXX3 FXX4 FXX5 FXX6 FXX7

− Defining flow types using the copy function: You can copy the entries for the following flow types to your new flow types: Flow type - Principal increase - Principal decrease - Final repayment - Interest capitalization - Nominal interest - Charges - Commission

1100 1110 1120 1150 1200 1901 1902

− Defining flow types without using the copy function:

-> Use suitable flow categories (with the corresponding calculation categories). When you define flow types, you are defining the structure characteristics of the transaction.

© SAP AG

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-> Assign your flow types to the following categories:

Relevant

Princ.inc.

Princ.decr.

Final rept

Int. cap.

Nom. int.

Charges

x

x

x

x

x

x

x

x

x

x

x

x

x

x

Cash Mgmt

x

x

x

Posting

x

x

x

x

Position

x

x

x

x

P/L Valuation

x

x

x

Accr./def. Eff.int.calc.

x

x

Commission

x

1-4

Assign all the new flow types FXX ... - except for interest and repayment - to your new transaction type TXX (together with your new product type PXX).

1-5

Set up the following condition types: Final repayment

Nominal interest

ID: 2XX1 - Structure characteristics - Flow category: Final repayment - Flow type generated: FXX3 Final repayment

ID: 2XX2 - Structure characteristics - Flow category: Nominal interest - Flow type generated: FXX5 Nominal interest

You can use the following condition types to copy the data for your condition types: 1120 Final repayment 1200 Nominal interest

© SAP AG

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1-6

Assign the condition types "Final repayment"(2XX1) and "Nominal interest" (2XX2) to your transaction type fixed-term deposit TXX (together with your product type PXX). Both condition types apply for the incoming and the outgoing sides of the transaction.

1-7

© SAP AG

Create a fixed-term deposit with your house bank using your new product type. Check the cash flow and add other flows (such as charges). Does the transaction need to be settled?

AC810

7-33

Transaction and Position Management - Structure

Optional Exercises

Unit: Transaction and Position Management - Structure Topic: Creating a New Product (Currency Option)

• Creating the master data to configure a different product type.

Your Treasury department wants to purchase a currency option (OTC) to hedge against the falling US dollar. Your company has not used currency options before. Make the necessary settings in the system to allow your traders to use this product.

2-1

Create the product type for the currency option. Assign the following ID to the product type: OXX (XX = your group number). − Assign the product type to the number range "01". − You want the currency option to be exercised physically (no cash settlement). − The option is price-quoted and will be settled once (normal style). − It is a standard option that can be exercised on any bank working day. − Use the product type 60A (external forex transaction) and transaction type 101 (spot transaction) as the underlying..

© SAP AG

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2-2

Define your own transaction type: For your product type currency option OXX (XX = your group name), define the transaction type ‘Purchase’ OXX (XX = your group name).

2-3

−

Assign the processing category 00101 to your transaction type: Order-cont.settl.-exercise/Expir.-settl.-term.-term. settl.

−

Assign the transaction type to number range '03'. The number range for the underlying corresponds to the second number range for the forex spot transaction (number range 19). You do not want currency options to be released for posting automatically.

Assign the following flow types to your transaction type: - 1301 - 1310 - 1320 - 1321 - 1900

2-4

© SAP AG

Option premium (OTC) Cash settlement Premium transfer on expiration Premium transfer on exercise Charges

Create a transaction in the application using the new product type for currency options. Remember that your business partner will need to be authorized for OTC options.

AC810

7-35

Transaction and Position Management- Structure

Solutions

Unit: Transaction and Position Management - Structure Topic: Creating a New Product (Fixed-Term Deposit)

1-1

To create your fixed-term deposit: Customizing: Treasury Treasury Management Money Market Transaction Management Product Types Define Product Types Button: New entries

1-2

To define transaction types: Customizing: Treasury Treasury Management Money Market Transaction Management Transaction Types Define Number Ranges You do not need to enter any new data here, just check what is there. Customizing: Treasury Treasury Management Money Market Transaction Management Transaction Types Define Transaction Types Button: New entries

© SAP AG

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1-3

To define flow types: Customizing: Treasury Treasury Management Money Market Transaction Management Flow Types Define Flow Types Button: New entries

1-4

To assign your flow types to transaction types: Customizing: Treasury Treasury Management Money Market Transaction Management Flow Types Assign Flow Types to Transaction Type Button: New entries

1-5

To define the condition types: Customizing: Treasury Treasury Management Money Market Transaction Management Condition Types Define Condition Types Button: New entries

© SAP AG

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1-6

To assign the condition types to the transaction types: Customizing: Treasury Treasury Management Money Market Transaction Management Condition Types Assign Condition Types to Transaction Type Button: New entries

1-7

To create a fixed-term deposit: Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create

© SAP AG

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7-38

Unit: Transaction and Position Management - Structure Topic: Creating a New Product (Currency Option)

2-1

To create a product type for currency options: Customizing: Treasury Treasury Management Derivatives Transaction Management Product Types Define Product Types Button: New entries

2-2

To define a transaction type: Customizing: Treasury Treasury Management Derivatives Transaction Management Transaction Types Define Transaction Types Button: New entries

2-3

To assign your flow types to the transaction types: Customizing: Treasury Treasury Management Derivatives Transaction Management Flow Types Assign Flow Types to Transaction Type Button: New entries

© SAP AG

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2-4

To create a currency option: Application: Treasury Treasury Management Derivatives Trading OTC Option Create

© SAP AG

AC810

7-40

Transaction and Position Management: Process

Contents: Trading Back office Accounting

 SAP AG 1999

© SAP AG

AC810

8-1

Transaction and Position Management: Process: Unit Objectives

At the conclusion of this unit, you will be able to: Enter financial transactions in the SAP Treasury Management system from start to finish - from the trading stage through to the back office and on to financial accounting.

 SAP AG 1999

© SAP AG

AC810

8-2



© SAP AG

AC810

8-3

Transaction and Position Management: Process Business Scenario

After learning the basic settings you need to make to represent your financial transactions in SAP Treasury Management, you will now learn about the entire transaction process and how it is represented in the system.

 SAP AG 1999


© SAP AG

AC810

8-4

Financial Transaction - Overview

Evaluation reports in the Information System

Forex - Administration configured in R/3

Execute

Master data:

financial

Business partners

transactions

Transaction authorizations Payment details Correspondence Currencies

R/3 Financial Accounting

Transaction management Customizing  SAP AG 1999

Before you can use the foreign exchange management functions, for example, you are required to enter master data (such as create business partner, set up product types and transaction types). You can then enter entire foreign exchange transactions. You can also use the reporting functions within transaction and position management. Flows relevant for posting are transferred to the R/3 Financial Accounting component.

© SAP AG

AC810

8-5

Transaction and Position Management Process: Trading Functions Release

Trading

Back office

Accounting

Create new offer/ order/contract Exercise/expiration Notice Rollovers Exercise rights

Settlement/control Interest rate adjustment Netting References Confirmation letters Sec. account transfers Corporate actions

Postings Payment transactions Reversals Accruals/deferrals Valuation


 SAP AG 1999

Within the transaction and position management process, a distinction is made between the following areas: In the trading area, you enter offers and transactions, and exercise rights. In the back office area, you settle transactions, which means you check existing transactions and perform position management-related processes, such as securities account transfers. In the accounting area, you process the relevant account-based activities in the subledger and transfer posting information to the general ledger in Financial Accounting. You can set up your system so that a transaction must be released by one/several (other) people before it can be posted.

© SAP AG

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Trading

Financial transactions Are assigned to their organizational entity (company code) in the enterprise Wide range of different options to reflect the organizational structures of group companies

Are concluded for a specific product type/transaction type You are free to define product types and transaction types that suit your requirements

Are concluded with a business partner Internal and external (banks) business partners

Can be created with different processing categories

 SAP AG 1999

The main functions for entering and changing financial transactions are grouped together in the trading area. To represent financial transactions in the system efficiently, you first have to make basic settings: Which organizational unit (company code) is concluding the financial transaction? This setting enables companies with complex organizational structures, such as Treasury headquarters, to differentiate between the various company areas. Which financial transaction is being concluded? Here, you specify the product and transaction types along with the relevant processing rules. With whom are you concluding a certain financial transaction? Each financial transaction is linked to a business partner. The data you define for the business partner offers a large amount of scope for rationalization. If, for example, you always use the same bank and payment details with a business partner, they can be added automatically to the financial transaction. You can also set up restrictions, for example, which allow you to only trade certain product types with a given business partner.

© SAP AG

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8-7

Example: Creating Transactions

Company code 1000

IDES AG

Product type

60a

Forex EXTERNAL

Transact. type

101

Spot transaction

Partner

Deuba

Deutsche Bank

Specifications Portfolio Business transaction Order/Fixing

Contract

External number assignment Transaction

 SAP AG 1999

You create transactions with a business partner in a company code for a certain product type and a specific transaction type. A whole range of tools are available to enable you to work with the transaction management functions. Using the Field selection control you can control a large number of the visible fields. This enables you to set up the appearance of the display screens for TR Transaction Management to suit the prevailing business conditions. You group the visible fields into field groups according to different business criteria. Each of the field groups available can be assigned an attribute, which determines how the screen appears for the user. This means you can specify whether you want field groups to be suppressed, displayed, or to appear as required entries.

© SAP AG

AC810

8-8

Offers for Fixed-Term Deposits and Foreign Exchange

Offer no.1 2.4%

Offer no.2 2.7%

Offer no.3 2.5%

Sorting according to quality

Contract

Offer no.2 2.7%

 SAP AG 1999

The activity category Offer allows you to group together and store quotations from different banks with a reference. This enables you to sort the offers according to their quality. You have the option of creating a contract directly from an offer. You have to create a specific number range for transactions with the activity category Offer. In Customizing for transaction types, you assign this number range to the relevant transaction type in the number ranges for offers field. You can use this function in the Money Market area for fixed-term deposits and in the Foreign Exchange area for forex spot transactions and forward exchange transactions. A special Evaluation report for offers, which you can set up yourself, tells you how many offers were submitted, and how many of these resulted in a contract. You can use the Journal to display offers..

© SAP AG

AC810

8-9

Simulation of Fixed-Term Deposits/Forex Transactions

You can create simulated transactions

MRM

No business partner is required for the simulation Simulations are managed with their own number range You can create a contract from a simulation

You can add a business partner

 SAP AG 1999

For forex transactions and fixed-term deposits, you can create simulated transactions with the activity category Simulation. You use simulated transactions for analysis purposes in Market Risk Management. You can create a contract from a simulated transaction using the change function. To do this, however, you must add a business partner, since simulated transactions are created without a business partner. You manage simulations under a number range of their own. You must assign this number range to the relevant transaction type in the number ranges for simulations field in Customizing for transaction types. You can use the Journal to display simulations.

© SAP AG

AC810

8-10

Financial Transactions in Cash Management Assign planning levels 1000

IDES AG

60A

Forex external

DB

Forex banks

20

Contract

Cash Management: Display Levels Banks Le

Description

10/02 10/03 10/03 10/04 10/05 10/05 later later 10/02 10/03

Forex banks

150,000 xxx,xxx xxx,xxx xxx,xxx xxx,xxx

DB ...

...

B5 ...

...

...

Clearing

F0

Balance

...

...

...

150,000 xxx,xxx xxx,xxx xxx,xxx xxx,xxx

... Banks

...

...

...

...

...

150,000 xxx,xxx xxx,xxx xxx,xxx xxx,xxx xxx,xxx xxx,xxx xxx,xxx xxx,xxx xxx,xxx

 SAP AG 1999

Each activity category (status) within a business transaction (order, contract, settlement, etc.) can be displayed automatically in Cash Management and, if required, can be viewed at separate levels. In this way, cash flows particularly from Treasury transactions that have not yet been posted, but whose value date is known, can be used by the cash manager for forecasting and planning. For the relevant product types and activity categories (Money Market, Foreign Exchange, Derivatives) or statuses (Securities, Loans), you maintain the planning levels for G/L and/or subledger accounts on which the information is to be displayed in Customizing. Example:

© SAP AG

Product type:

60A

- Forex

Activity cat:

20

- Contract

Level:

DB

- Forex (bank known)

AC810

8-11

Trading: Transaction Data

Basic data

(Amount/Interest rate/Price ...)

Payment details

(Direction / Currency / House bank / Account ID ... )

Cash flow

(Payment data / Payment amount / Flow type ... )

Administration data

Conditions (overview)

(Activity category ... )

ex r for o f t No

(Condition category / Effective from / Cond. type / Description ... )

 SAP AG 1999

© SAP AG

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Interest Calculation Methods Method Characteristics Numerator (days) Denominator (day basis) Example 06/16/ 12/31/YY

360/360

actual/360 Actual calendar days

30 days/month 360 days/year 360 days per year

360 days per year

195 days

198 days

Method

360E/360

actual/366

actual/365 Actual calendar days 365 days per year 198 days

Actual calendar days 366 days per year 198 days

actual/ actualP

actual/ actualY

actualW/252

Actual calendar days

Actual calendar days

Work days of an interest rate calendar

Characteristics Numerator (days) Denominator (day basis) Example 06/16 12/31/YY

30 days per month 31st 30th

Actual calendar days of a period

360 days per year 194 days

198 days

(*) Example: Factory calendar Germany

Actual calendar days of a calendar year

252 work days per year

198 days

141 days (*)

orex for f t o N

 SAP AG 1999

The following are defined as DAY BASIS: 1. ‘360’ Based on a year with 360 days. 2. ‘365’ Based on a year with 365 days. 3. ‘366’ Based on a year with 366 days. 4. ‘252’ Based on a year with 252 days (work days). 5. ‘actP’ ‘P’ stands for ‘period’ and means that the actual number of days in a period is used to calculate the interest. The number of days per period is multiplied by the number of periods per annum to give the number of days per year. 6. ‘actY’ ‘Y’ stands for ‘Year’ and indicates that the actual number of days in a calendar year (365 days in a normal year and 366 in a leap year) is used. If a calculation period comprises two calendar years, and one of them is a leap year, the calculation is done in two parts.

© SAP AG

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8-13

Conditions of a Financial Transaction

Example: Fixed-term deposit Nominal interest

4% interest / Frequency: 6 months

Final repayment orex for f t o N

Condition change: Nominal interest Nominal interest

Payment date

Int.

Amount

10/31/YY 04/30/YY

4% 5%

3,333.33 UNI 4,166.67 UNI

 SAP AG 1999

You can assign different, flexible user-defined agreements using the "building block principle" for the term of a financial transaction. Depending on the condition type, a condition item is characterized by Amounts or percentage rates and calculation bases Calendar dates and the frequency. Within a given period, you may require different values for a condition type (such as a change in the interest rate or frequency). This means that the contract conditions for a condition type are each tied to an "Effective from" date. Each condition is valid until the effective date of the following condition is reached.

© SAP AG

AC810

8-14

Fixed-Term Deposits and Deposits at Notice: Changes in Capital Structure

Changes in capital structure At the start of term

During rollovers

During the term w Ne

Advantage:

☺

Higher degree of flexibility when mapping transactions (e.g. creating repayment schedules)

Button next to amount field Automatically included in cash flow

 SAP AG 1999

For fixed-term deposits and deposits at notice, you can enter other principal increases and decreases during the term in addition to the main flows at the start of term or on the rollover date. This enables you to represent repayment schedules, for example.

© SAP AG

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8-15

Effective Interest Rate Calculation and Update

The effective interest rate is Calculated by the system and Updated to the database Prerequisite: You must enter an effective interest method when you define the product type Effective interest rate is available for evaluations in reporting You can calculate and display the effective interest rates (using all the effective interest methods available) when you process transactions

 SAP AG 1999

Definition of the Effective interest rate: Expression of the profitability/costs of a capital investment or borrowing. Alongside the nominal interest, charges, clearing dates, discount/premium, and repayment modalities are also used in the effective interest rate calculation, for example. In the Money Market area, the effective interest rate is calculated and updated to the database during transaction processing provided that you entered an effective interest method when you defined the respective product type. In this case, the effective interest rate can be used for evaluations in reporting. For transactions that were entered before Release 4.6A, a report is available (RFTMEZ00) that you can use to calculate and update the effective interest rate.

© SAP AG

AC810

8-16

Roll Over Contract: Fixed-Term Deposit

Transaction created Roll over

...

1100 Principal increase 1110 Principal decrease

Principal change

Term

Flow type

Start

11/06/YYYY

Amount

Rollover

10/10/YYYY

End

?

Interest structure

... ...

 SAP AG 1999

You can roll over existing transactions using the same transaction number, and, if required, with different conditions. You can display the status of the current business transaction or display its history with all the related details. Using the memo function, you can specify additional information for each activity. By choosing Extras --> Amount overview, a list appears showing the capital and interest flows that are due before or on the relevant key date, which are related to the transaction and sorted by their amounts.

© SAP AG

AC810

8-17

Transaction History History: Activity Sequence

Activity

Order Administration data CoCd0001 SAP AGTransaction 4711 PTyp 51a Activity 1 Basic data TTyp 100 Act.cat Order CoCd 0001 SAP AG Transaction 4711 PTyp 51a Activity 1 TTyp 100 Act. cat. Order

Date

Act. category

Active status

1

Order

10/01/YY Replaced

2

Contract

10/02/YY Replaced

3

Settlement

10/02/YY Replaced

4

Rollover

10/31/YY Replaced

5

Settlement

11/30/YY

Active

...

...

...

...

Contract Administration data CoCd 0001 SAP AG Trans. 4711 PTypdata 51a Activity 1 Basic TTyp 100 Act. cat. Cont. CoCd 0001 SAP AGTrans. 4711 PTyp 51a Activity 1 TTyp 100 Act. cat. Cont.

Settlement Administration data CoCd 0001 SAP AG Trans. 4711 PTyp Activity 1 Basic51a data TTyp 100 Act. cat. Sttlmt CoCd 0001 SAP AG Trans. 4711 PTyp 51a Activity 1 TTyp 100 Act. cat. Sttlmt

Rollover Administration data CoCd 0001 SAP AG Trans. 4711 PTyp data 51a Activity 1 Basic TTyp 100 Act. cat. Cont. CoCd 0001 SAP AG Trans. 4711 PTyp 51a Activity 1 TTyp 100 Act. cat. Cont.

Settlement Administration data CoCd 0001 SAP AGTransaction 4711 PTyp Activity 1 Basic51a data TTyp 100 Act. cat. Settlement CoCd 0001 SAP AGTransaction 4711 PTyp 51a Activity 1 TTyp 100 Act. cat. Settlement

 SAP AG 1999

In the transaction history you can call up each activity (status) with the corresponding details.

© SAP AG

AC810

8-18

Collective Processing: Money Market Overview of money market transactions that correspond to the selection criteria entered Process the relevant transactions Create Change Display Roll over Give notice Settle Reverse History Branch directly to the individual transaction Connection to the ABAP List Viewer

 SAP AG 1999

The collective processing function helps you manage your transactions systematically by displaying a list of all the transactions with common selection criteria. The list includes key information about each transaction as well as a range of processing functions. From this processing list, you can branch directly to the individual transactions at any time. The connection to the ABAP List Viewer provides you with a whole range of display options. You can structure your list by column or row, sort the list, and display totals.You can save these display variants for later use. When you have finished processing a transaction, a Processing indicator appears.

© SAP AG

AC810

8-19

Transaction Management: Worklist and Collective Processing Processing financial transactions for all product categories

User-specific managing of financial transactions Selecting and displaying Treasury financial transactions Branching to individual transaction processing Representing transactions using the SAP List Viewer

 SAP AG 1999

You can process financial transactions across all of the following product categories: Fixed-term deposits and deposits at notice Commercial Paper Cash flow transactions Forex spot transactions and forward exchange transactions Interest derivatives OTC options Futures Securities You can store any number of selections as variants and manage these in a tree structure either userspecifically or for all users. The display variant controls the structure of the list. You can store the following information in a display variant: Column structure Sorting criteria Filter conditions

© SAP AG

AC810

8-20

Cash Flows in Cash Management Treasury Management cash flow Jun Jun

19 19

1000+ Forex purchase 2000- Forex sale

Business partner Planning groups

Business partner / transaction Payment details and house banks

E2 domestic customer

Subledger accounts DP Forex

+ USD - USD

JUN 19 + 1000

1,000 1,800

DB DB

JUN 19 - 1800

E2 Domestic customers

GIRUN GIRUN

Bank accounts DB Forex DBGIRO

Alternative 1

Alternative 2

Payment details unknown

Payment details known

 SAP AG 1999

Alternative 1: If no payment details have been entered in the transaction, i.e. the bank accounts are unknown, the cash flow cannot be displayed for a bank (clearing) account. The amount relating to subledger accounts is displayed, so that the cash flow can still be seen in Cash Management. The system uses the planning group entered in the master record of the business partner. Alternative 2: If payment details have been entered in the transaction, i.e. the bank accounts are known, the cash flow is displayed in Cash Management at the level that is assigned to the corresponding bank (clearing) account.

© SAP AG

AC810

8-21

Transaction and Position Management Process: Back-Office Functions Release

Trading Create new offer/ order/contract Exercise/expiration Notice Rollovers Exercise rights

Back office Settlement/control Interest rate adjustment Netting References Confirmation letters Sec. account transfers Corporate actions



 SAP AG 1999

In the back office area you settle transactions, in other words, you check existing transactions and perform position management-related processes, such as securities account transfers.

© SAP AG

AC810

8-22

Back Office

Accounting

Back office

Correspondence Confirmation management (incoming /outgoing)

Confirmation

Position management Collective processing Netting References Interest rate changes Sec. account transfers Capital structure changes

Settlement of transactions Settlement/control Payment details Payment details

Curr.

...

Bank

...

Acct

...

Confirmation

 SAP AG 1999

Depending on how your company is set up, you can transfer transactions you have entered in the trading area to the back office area. The back office area includes functions for checking and changing transactions. Some of the key postprocessing activities include: Enhancing transaction data, for example, adding information that is relevant for the back office. Preparing postings and payments, for example, checking the accounts that are used later on in the automated processes. This is the last opportunity you have of assigning an account assignment reference and payment details to the transaction. You need this information in order to post the Treasury flow to Financial Accounting (see account assignment reference). Generating correspondence in the form of dealing slips, letters of confirmation, or confirmation files. Position management tasks, such as securities account transfers. By saving the settlement activity the system changes the activity category of the transaction to record that has been checked and processed in the back office.

© SAP AG

AC810

8-23

Transaction Settlement

Account assignment reference DB000001 Deutsche Bank Fixed-term deposit G/L account: 113113

Transaction: Payment details Company code Product type Transaction type D +

Curr. UNI UNI

1000 51A 100

Effective FTyp House bk Deuba Deuba

Fixed-term deposit Investment Acct ID GIRUN GIRUN

Payment Pmnt req.

 SAP AG 1999

You can check, change, or add information that is relevant for posting and payment. This is the last opportunity you have of assigning an account assignment reference and payment details to a transaction. You need this information in order to post the Treasury flow to Financial Accounting. Depending on how you set up your system, you can have the account assignment reference or the payment details for the particular business partner appear as default values, which you can then change or enhance. The system supports multiple level payment methods. By entering a bank chain, you can process payments via several banks. Up to 3 intermediate banks are supported.

© SAP AG

AC810

8-24

Correspondence: Confirmation Management

Differentiates between outgoing confirmation and counterconfirmation Confirmation status for correspondence can be seen in the financial transaction - under 'Status' Status management for counterconfirmation can be controlled according to the business partner - in the standing instructions + Customizing Monitors overdue counterconfirmations Optical archiving of correspondence Correspondence overview and correspondence monitor

 SAP AG 1999

You can define for each business partner (in the standing instructions) whether counterconfirmation is required for external correspondence. The system updates the confirmation status of the business transaction on the Status tab. --> Executed, matched (counterconfirmation has been received and matched). You can archive correspondence letters optically. To do this, you must have set the 'Archiving (Optical archiving)' indicator in Customizing (by choosing "Define Correspondence Types") for each correspondence type you require. However, you need to use an external optical archive for this. You access the archived correspondence from the transaction display. If you are in the display/change mode for a transaction, you can also display the correspondence activities by choosing Goto. By double-clicking a line, you activate the archive link monitor and display the document. The correspondence monitor provides new functions that enable you to process and monitor your correspondence. These functions have been developed on the basis of the existing correspondence overview. Overview function of the current processing status Option of setting the counterconfirmation status to matched directly from the monitor (manual match) Function for executing planned correspondence directly from the monitor Function for repeating correspondence that has already been generated ... The correspondence monitor has been developed using the ABAP List Viewer.

© SAP AG

AC810

8-25

Confirmation Letters Create Correspondence on Basis of Planned Records Selections Company code Transaction Correspondence type Product category Product type Transaction type ... Business partner Portfolio Trader End of term/due date Entered/changed on Entered/changed by

1000 to ?

to to

...

 SAP AG 1999

The generation of correspondence is built up from planned records, which are created on the basis of your Customizing settings and standing instructions for correspondence when you create, change, or reverse transactions, for example. You go to the selection screen for calling up confirmation letters by choosing Back office --> Correspondence --> Outgoing Correspondence from the menu. You can select transactions that are to be confirmed. The confirmation letters that are generated appear in chronological order in the display. You can print them out, if required.

© SAP AG

AC810

8-26

Transaction and Position Management Process: Accounting Functions Release

Trading Create new offer/ order/contract Exercise/expiration Notice Rollovers Exercise rights

Back office Settlement/control Interest rate adjustment Netting References Confirmation letters Sec. account transfers Corporate actions



 SAP AG 1999

In the accounting area, you process the relevant account-based activities in the subledger and transfer posting information to the general ledger in Financial Accounting. You can set up your system so that a transaction must be released by one/several (other) people before it can be posted.

© SAP AG

AC810

8-27

Automatic / Manual Posting Release

Product type Transaction type X

Posting release

Automatic ! Release

Trading

Posting

Back office

 SAP AG 1999

In the Money Market, Foreign Exchange, and Derivatives areas, transactions either do not require any release, or they must be released by a second employee. If you want the transactions to be released for posting automatically (i.e. not explicitly), you have to put a cross in the "posting release" field in Customizing (according to the product type and transaction type). In this case the transactions can be posted without being released. Manual posting release: If you want the transactions to be released for posting by a second user, leave this field blank.

© SAP AG

AC810

8-28

Release Workflow - Overview Graphic Start workflow release One-level approval

Two-level approval

1st approval or rejection R

Three-level approval

G A

Inbox

1st approval or rejection

1st approval or rejection A

A

G

2nd approval or rejection

Inbox

2nd approval or rejection R

A R

Inbox

3rd approval or rejection

A A

R

If a transaction is rejected, it can be changed/reversed  SAP AG 1999

The TR transaction release process includes the following key components: Integration or organization management in the SAP Business Workflow (Organizational plan, task distribution according to responsibilities and job descriptions, dynamic task distribution for the runtime from the context of the workflow and the objects processed) Integration of the release management in the SAP Business Workflow (Organizational plan for the release, consideration of the release strategies that can be customized in Treasury for the runtime of the workflow) The release procedure includes approval or control procedures with organizational conditions. If a release is rejected, the person who last processed the transaction is informed by the release point, and the transaction can be changed or reversed. The transaction may then have to be released again.

© SAP AG

AC810

8-29

Release Workflow - Customizing I

Release procedure Release conditions

Release procedure Release conditions

Company code 1000 IDES AG Release procedure PTyp TTyp Rel. proc. 51A 100 51B 100 60A 101

Company code 1000 IDES AG Product type 51B Fixed-term dep. internal Transaction type 100 Purchase Release conditions ACat Act. Rel. nec. 10 01

Rel. steps 1

Trans. processing 1

 SAP AG 1999

You can specify in Customizing the procedure you want to use according to the company code, product type, and transaction type. This is why you define release procedures and release conditions. In the release conditions you enter the release step and information relating to the transaction release according to the activity category and activity. The release steps define how many people are required to release an object (for example, 1 release step: 2 employees (1 employee, 1 person responsible for the release). You use the transaction release to define what the application does while the transaction is in the release workflow (for example, ongoing transaction during the release workflow is not permitted).

© SAP AG

AC810

8-30

Release Workflow - Customizing II Display standard role 20000034 (TRTMTR_DEAL)

Create responsibilities

Agent assignment

Example: Description Company code Product type Transaction type Mom. approval level Release steps

of 1000 51B 100 1 2

to

Activate event linkage

Activate event linkage

 SAP AG 1999

Make the standard Customizing settings for the workflow. Display standard role 20000034 (TRTMTR_DEAL): The standard role describes the responsibilities for the individual approval steps. The agents must be found in the system for the individual approvals. To do this a standard role has been built into the workflow definition, which is still empty. To define the agents for an approval level, you have to create a responsibility in the standard role and assign a user/position to it. (Change the responsibilities so that the "momentary approval level" is set to the corresponding value, and the "release steps" are set to the maximum number). You have the option of entering several users/positions, which are notified if deadlines are exceeded (standard role 20000035). Since this workflow is triggered by an event, you must activate the event linkage of the workflow used. For more information about the release workflow, see the IMG documentation. A reporting overview is available that enables you to see for each Treasury transaction the release that was processed, when it was processed, and by whom.

© SAP AG

AC810

8-31

Accounting Forex spot transaction Purchase USD - Rate 1.80 Oct 01

1000 +

Forex purchase

1,000,000

Oct 01

2000 -

Forex sale

1,800,000

Selection of the transactions and flows relevant for posting

FI interface

Financial Accounting

 SAP AG 1999

The Treasury information that is required for posting is passed on to Financial Accounting via an interface. The posting logic is based on the flow types generated and the account assignment reference that belongs to the financial transaction as well as the account determination defined by the user. You can post individual flows either via G/L accounts or via customer accounts. If you want to trigger actual payment activities, you can use the FI payment program on the basis of posting via customer accounts. You also have the option of using an extended payment program for payment requests via which active payments can be made on the basis of postings via non-customer accounts. In this case, payment requests are first generated in Treasury, and are then paid individually or jointly via the TR payment program. The following four posting alternatives are possible: 1. G/L accounts without payment requests: flows are posted to bank clearing accounts and cleared via manual or automatic bank statements. 2. Customer accounts without payment requests: flows are posted to customer accounts and cleared by active payment triggering by the FI payment program.The bank clearing accounts that have been posted to are cleared via the bank statement. 3. G/L accounts with payment requests: (see Unit 8) 4. Customer accounts with payment requests: a payment request is generated per flow and posting is initiated via the payment requests clearing account or customer account. The subsequent payment run performs the posting to the bank clearing accounts.

© SAP AG

AC810

8-32

Transaction: Posting

... via G/L accounts FT dep. bal. sheet acct (Deuba)

House bank account (Deuba)

100 m

100 m

IDES FT dep. investment

House bank DEUBA

Bank clearing account 100 m

100 m

Fixed-term dep. inv. Statement from bank

 SAP AG 1999

In the case of financial transactions that are concluded with business partners that are also the house bank of the company, active payments are not usually made. Rather the corresponding postings on the business partner side (= the house bank) are posted to the bank account. The flows 'preposted' from Treasury Management to the bank clearing accounts are cleared when the bank statement is received. Example: G/L account posting without payment request

© SAP AG

AC810

8-33

Posting a Transaction: Overview Example: Fixed-term deposit investment Posting record (= "Posting specifications"): for (40) bal. sheet acct

to (50) bank clearing account

for

to

113113 Bal. sheet account Fixed-term deposit Bal. sheet account

113105 TR clearing Bank clearing acct

from

from

transaction

transaction

Account assignment ref. - fixed -

Account assignment ref. - changeable -

 SAP AG 1999

To post transactions: You define the balance sheet account in the account assignment reference. This includes the account number for the balance sheet account and additional information (such as the business area). In turn, you enter the account assignment reference in the transaction in the Administration data. You cannot change the balance sheet account within account determination for posting transactions. The bank clearing account is read from the payment details entered in the transaction. You can change this account for posting within account determination.

© SAP AG

AC810

8-34

Posting: Account Assignment Reference

Fixed-term deposit Date

Sept 01

1,000,000.00 Term 1 month UNI Deutsche Bank Nominal interest 3.5%

Company code

1000

Acct ass.ref. Short text Deutsche Bank deposit at notice DB000002 DB000001 . . .

Deutsche Bank fixed-term deposit

Business area Cost center

Details

. .

G/L account

113113

 SAP AG 1999

The account assignment reference determines the G/L account (balance sheet account) to which the current financial transaction is posted. You can structure the position differently using various account assignment references. As well as entering the account for position management in the account assignment reference, you can also assign a cost center (only relevant for posting category 4) and a business area. The account assignment reference is part of account determination, which you can set up in Customizing according to the currency and/or account assignment reference. This flexibility enables you to structure postings in different ways. For example, in the account assignment reference for revenue and expense postings in securities you can see whether affiliated or unaffiliated companies (depending on the account assignment reference) issued the respective securities. In the Money Market, Foreign Exchange, Derivatives, and Loans areas, you define the account assignment reference directly in the relevant financial transaction. In the Securities area, however, you enter the account assignment reference in the position indicator.

© SAP AG

AC810

8-35

Determining the Account Assignment Reference: Overview Characteristic 1

Characteristic 2

Value group > Values 1

A B C

2

D E

. . .

(all) value group combinations Select as required for automatic determination of account assignment reference

Assign account assignment references to the combinations selected  SAP AG 1999

When you create a transaction, you require information about the balance sheet account to be posted for (later) posting activities. You can enter the account assignment reference in the transaction or position indicator manually, or you can have the system generate it automatically. The automatically generated account assignment reference is a default value, but you can change it. When you have the system determine the account assignment reference automatically, it reads certain characteristics in the transaction and uses these to determine the account assignment reference accordingly.

© SAP AG

AC810

8-36

Account Assignment Reference Determination: Characteristics/Values

Company code

1000

Contract type

m Exa

ple

2

Selectable characteristics

Securities

Stock type

Product cat.

Execution type (American or European) Type of shareholding Holding share comp. code position

Selected characteristics

Holding share sec. acct position

Issue currency

Shareholding indicator comp. code

Product type

Shareholding indicator sec. acct position Balance sheet indicator sec. acct position Industry key Stock form indicator SCB asset group indicator comp. code SCB asset group indicator sec. acct position Foreign Investment Law indicator

Double-click

Balance sheet grouping indicator comp. code

Values ValGrp Value groups

Comment

UNI

Universal currency

Comment

CHF

Swiss franc

1

Local currency

FRF

French franc

2

Europe

ITL

Italian lira

3

Other

*

Other

ValGrp

 SAP AG 1999

You can have the system determine the account assignment reference automatically on the basis of certain characteristics you select in Customizing. The characteristics available come from business partner management or position data. You have to define values for the characteristics. These are then grouped together to form evaluation groups. You define the automatic determination of the account assignment reference in the company code either for selected product categories and/or for the entire securities contract type, in other words, for all product categories. The account assignment reference is determined at two levels: 1. If a corresponding entry is available at product category level, the system uses this account assignment reference. 2. If no corresponding entry is found in 1, the system uses the relevant specification for the contract type. If no account assignment reference is determined in 1 or 2, you have to enter one manually in the position indicator.

© SAP AG

AC810

8-37

Determine Account Assignment Reference: Allocation Acct assignment ref. allocation Combinations

ValGrp

Issue currency

ValGrp

Product type

0001

Local currency

0001

Bonds

0001 0002

Local currency Europe

0002 0001

Stocks Bonds

0002 0003

Europe Other

0002 0001

Stocks Bonds

0003

Other

0002

Stocks

Select and Copy Acct ass. ValGrp

Issue currency

ValGrp

Product type

ref. ANL-IN

0001

Local currency

0001

Bonds

AKT-INL ANL-EUR

0001 0002

Local currency Europe

0002 0001

Stocks Bonds

ANL-REST

0003

Other

0001

Bonds

Enter and save  SAP AG 1999

Using the values and value groups defined for the selected characteristics, the system displays all the value group combinations that can be used to determine the account assignment reference automatically. You then assign account assignment references to the combinations you have chosen .

© SAP AG

AC810

8-38

Customizing: Account Determination

Money Market Functions Accounting

Application Chart of accts

Account Determination Define Settings Check

3 4.1.1 4.1.3 4.2.2 4.2.3 4.2.2

Accounts Symbols 0105

Treasury: Money market

Flow type

1100

Payment transact. + 1 3

+ + + + + +

++++++++++5 273100 220000 479100 465000 465001

... Comp.

40 50 SA

+ + + + + +

Account symbols Acct symbol Description

Posting specifications Direction Debit Credit Document type

Treasury: Money market International chart of accounts

Account assignment Acct symbol Acct assignment ref. Currency G/L acct

Chart of accounts

Application

0105 INT

Balance Bank clearing Posting cat. 13

3

Bank clearing

4.1.1

Interest received

...

 SAP AG 1999

You define the account determination for the relevant application in Customizing. You use the account determination function to determine which accounts you want to use for posting activities. It includes the posting specifications, the account symbols used for this, and the accounts assigned to the symbols. The following requirements must be met before you can post transactions to Financial Accounting: You must have created all the necessary accounts and made the correct settings. The document types must appear in the document types table and allow the required account types to be posted. The number range linked to the document type must have internal number assignment in Financial Accounting. The posting periods must be open for posting.

© SAP AG

AC810

8-39

Account Determination: Posting Specifications (1)

Accounts

Symbols

Application

0105


Field selection Payment transact. +

Posting specifications Flow type 1100 Direction Debit 40 Credit 50 Document type SA Flow type Direction Debit Credit Document type

1100

Flow type Direction + Debit Credit Document type

1200

40 50 SA

40 50 SA

1 3

Balance Bank clearing Posting category Payment transact. x Balance Subledger accounts Posting category

1 2

Payment transact. + 3 4.1.1

Bank clearing Interest received Posting category

Comp.

13 Comp.

12 Comp.

34

 SAP AG 1999

The posting details are an abstract description of the posting type and are independent of the chart of accounts. You also have to specify the document type, posting key, account symbols, and posting category. Account determination takes place here on the basis of the flow type, the direction of the flow, and the payment transaction. Direction:

+ for inflow - for outflow Payment transaction: x for postings via customer accounts + for postings via non-customer accounts (pure G/L account postings) You define debit/credit postings using the corresponding posting keys (40: debit position posting to a G/L account; 50: credit position posting to a G/L account). The document type controls how the postings to Financial Accounting are made (SA: G/L account document).

© SAP AG

AC810

8-40

Account Determination: Posting Specifications (2) • Posting category

Posting specifications • Flow Types FTyp 1100

1200

Name Principal increase

: :

Nominal interest

: :

• Payment transaction + not via customer accts x via customer accts

PT

Name

11 12 13 14 15 21 : 31 32 33 34 35 41 42 43 44 45 51 : :

Bal. sheet to bal. sheet Bal. sheet to subledger Bal. sheet to bank Bal. sheet to profit/loss Bal. sheet to G/L account Subledger to bal. sheet Bank to bal. sheet Bank to subledger Bank to bank Bank to profit/loss Bank to G/L account Profit/loss to bal. sheet Profit/loss to subledger Profit/loss to bank Profit/loss to profit/loss Profit/loss to G/L account G/L account to bal. sheet

 SAP AG 1999

Accounts are determined in two stages: 1. The posting details are determined on the basis of the flow type, the payment transaction, and the direction of the flow. The posting specifications are an abstract description of the posting type, and are independent of the chart of accounts. You also have to specify each document type, posting key, account symbol, and posting category. The posting category describes (both for debit and credit postings) the category of account you are posting to: 1: Balance sheet account (from account assignment reference) 2: Subledger account (customer account) 3: Bank clearing account 4: Profit/loss account (G/L account with cost center) 5: G/L account (G/L account without cost center) 2. The account symbols are replaced by actual G/L accounts, but you can change them, if required. Posting category 1 is an exception to this. The account symbol for the balance sheet account is replaced by the balance sheet account defined in the account assignment reference, but it cannot be changed.

© SAP AG

AC810

8-41

Account Determination : (Account) Symbols

Symbols

Accounts Posting specs Application 0105 Account symbols Account symbol : : 1 : 2 3 4.1.1 : :


Description : : Balance Subledger accounts Bank clearing Interest received : :

 SAP AG 1999

An account symbol describes a group of general ledger accounts. You can use it to group together similar types of postings (such as interest paid for write-downs). The symbols can be used for a large number of posting specifications. You fine-tune posting activities by setting different control parameters for assigning G/L accounts.

© SAP AG

AC810

8-42

Account Determination: Accounts (Allocation) Accounts Chart of accts

Posting specs Application Chart of accounts

INT

Symbols 0105


INT

Account assignment Account symbol : : 3 3 4.1.1 : : : :

Acct assign.ref. + + +

Currency + USD +

G/L acct +++++++++5 ++++++++19 273100

 SAP AG 1999

You assign one or several G/L accounts to the account symbol for the corresponding chart of accounts. You assign several accounts on the basis of the currency and/or the account assignment reference. This enables you to make different control settings for all posting activities. When you post a transaction, the G/L account specified in the house bank account field for the transaction is read. This G/L account is then transferred to the corresponding sub-account using the account symbol from the posting details based on the account assignment reference and/or currency. Example: You conclude a fixed-term deposit in USD, in which the USD current account 113150 is defined as the account ID in the payment details via the house bank. If the payment is made in USD, the account 113150 is replaced the bank clearing account 113155 in the account determination; for payment amounts in all other currencies, the posting is made to the account 113105.

© SAP AG

AC810

8-43

Posting a Transaction: Summary Fixed-term dep. 1 month 4.5 Sept 01 Oct 01 Oct 01

1100 1120 + 1200 +

Fixed-term dep. Final repayment Nominal interest

Acct assignment ref. DB000001

1,000,000 1,000,000 3,750

Balance sheet account acc. to acct assignment reference

Posting specifications Flow type

Fixed-term dep. acct 113113 Investment

D 1,000,000

Final repayment

C

1,000,000

1100 -

Debit Balance Credit Bank

1120 +

Debit Bank

Credit Balance

1200 +

Debit Bank

Credit Int. received

Interest received 273100

Bank clearing acct 113105 D FT deposit Nom.interest 3,750 Final repayment 1,000,000

C 1,000,000

D Nominal interest

C 3,750

 SAP AG 1999

When financial instruments (e.g. money market, forex, derivatives, securities, loans) are processed, they become business transactions, which have to be entered in the accounting system. These automatic postings and the corresponding offsetting entries on FI accounts may be carried out online. The posting of individual business transactions is controlled via the posting specifications. The posting specifications contain the rules for posting and account determination based on the account assignment reference per flow type. You make settings for these during Customizing. The flow type determines the correct posting specifications for each flow to be posted. The document type and the posting keys for the debit and credit side of the posting included in the posting specifications represent control information, which is passed on directly to the Financial Accounting module. In addition, the posting category and the account symbols in the posting details are used to determine the actual G/L and subledger accounts via the Treasury posting interface. From the display of an accounting document (for example, FI document), you can display the original posting in Treasury. To do this, go to the menu option Environment in the display for the FI document in the general ledger (Display document function, transaction FB03) and choose "Original document". This results in an overview of the flows in Treasury, which have led to postings in Financial Accounting.

© SAP AG

AC810

8-44

Cash Flows in Cash Management Transaction entered Product type PXX Payment details (PD) maintained

Payment details not maintained

From PD: House bank Deuba Account: DBGiro

From business partner/customer Group: E2

From Cust.: Prod.Type PXX: Level TB

From Cust.: ProdType PXX: Level TP Payment details added !!! Transaction is posted

Transaction is posted

Account DBGiro: FI account master: Level B5

 SAP AG 1999

It is essential that you enter payment details if you want to post a transaction, since you also enter the house bank and your own account you want to post to in the payment details. When you make a posting the payment details are entered, in other words, the bank accounts are known, so that the cash flow is displayed in Cash Management at the level that is assigned to the corresponding bank (clearing) account in the account master record.

© SAP AG

AC810

8-45

Financial Transactions and Cash Management

Cash Management: Display Levels Banks Le DB ...

B5 ...

F0

Description Forex

10/02 150,000

...

TR clearing

10/03 xxx,xxx

...

150,000

...

xxx,xxx

Balance

xxx,xxx

xxx,xxx

...

xxx,xxx

...

150,000 xxx,xxx

10/05

xxx,xxx

...

...

Banks

10/04

...

later

xxx,xxx

xxx,xxx

...

xxx,xxx

...

xxx,xxx

...

...

xxx,xxx

xxx,xxx

xxx,xxx

xxx,xxx

xxx,xxx

xxx,xxx

 SAP AG 1999

You can set up your system to display cash flows from Cash Management transactions so that you can display the payment at another level per activity category or status. This enables you to enter qualitative information about the status of the transaction via the different level. Example: Concluded forex transaction:

© SAP AG

DB level - foreign exchange

(Pre)posted foreign exchange transaction:

B5 level - bank clearing account

After receipt of bank statement:

B0 level - bank account

AC810

8-46

Treasury Management and Cash Management

Fixed-term deposit investment

Via activity at fixed-term deposit level

Post flows to clearing account

Change to clearing accounts

Clearing entry via account statement

Change to bank account level

 SAP AG 1999

The above slide represents an ideal process, which describes how the system represents the relationships between Treasury Management and Cash Management as well as postings to Financial Accounting. Payments are usually triggered by the business partner (bank) and processed further via automatic bank statements in Cash Management.

© SAP AG

AC810

8-47

Basic Principles of Archiving

Motivation Steady increase in volume of data for the end user Poor performance due to database overload Costs of investing in new hardware

Archiving requirements Store financial transactions outside the R/3 System Delete and reload archived data to the R/3 System Automatic conversion if table structures are changed Online archiving and archive management Compressing of data Connection to external archiving system  SAP AG 1999

Archiving data allows you to remove mass data that is no longer required in the system from the database, yet to store it where it can be evaluated. Transactions are written to archive files by Archiving objects, which describe the structure and composition of the data. These files can be stored in other media. SAP's archiving concept is based on the Archive Development Kit (ADK). If you start the archive management function via the application, the special features that are specific to the application (archiving objects, programs) are already preconfigured. The archiving program first generates an archive file. The files to be archived are then read as background processing and written to the archive file. Once the archive file has been closed a program is started - automatically or manually - which reads the archived data from the archive file and deletes it in the database. This procedure guarantees that only the data that has been stored correctly in the archive file is deleted in the database. Archive files, whose contents were removed from the database by the deletion program, can be stored externally. There are several options available (depending on the hardware you have), for example ArchiveLink. If the archive system of a third provider is connected via ArchiveLink, this system has to automatically store the processed file at the conclusion of a successful deletion program. You can also store this file manually at a later date.

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Archiving Money Market / Forex / and Derivatives Transactions Before transactions can be archived, they must fulfil the following criteria: Reach the minimum retention period specified in Customizing: Define Company Code-Dependent Minimum Retention Period Define Product Type-Dependent Minimum Retention Period The current business transaction must have been settled (if necessary, see Customizing for transaction types) or reversed All flows relevant for posting must have been posted The transaction must have reached the required confirmation status

 SAP AG 1999

You can enter the minimum retention period of financial transactions in Customizing using the following Customizing activities: Define Company Code-Dependent Minimum Retention Period Define Product Type-Dependent Minimum Retention Period Using selection criteria, you can restrict the number of financial transactions to be archived. Remember that financial transactions can only be archived in a certain status. The archiving object TRTM_FTR is set up so that you have to start the Deletion report manually. You can change this using the transaction AOBJ. This transaction allows you to make further technical settings for the archiving object TRTM_FTR, such as the name and path of the archive file. The financial transactions to be archived are stored in a physical file according to a platformindependent file name and path name. Note that the archiving function deletes archived financial transactions from the R/3 System. We recommend therefore that you start a test run before you perform the update run of an archiving activity, in order to identify any errors that may occur. You can only reload financial transactions that have been archived correctly.

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Process-Oriented Archiving Checks Product category 510/520/530 + 600

Order (600) Contract

Expiration

Posting status Not posted

Archive

Confirmation status Not confirmed

Archive  SAP AG 1999

You can archive TR-TM financial transactions in the Money Market, Foreign Exchange, and Derivatives areas. The functions available use the R/3 standard functions of the Archive Development Kit (ADK). This ensures that the data in the archive files relating to the database conversion is retained consistently. The ADK easily supports the connection of external archiving systems via the Archive Link. The archiving of financial transactions includes the following functions: Archiving and deleting financial transactions Reloading archived financial transactions Managing archive files When you archive financial transactions, they undergo a whole range of technical and business checks, which ensure that the data is retained consistently in the system. You can now also archive orders that have not been executed (such as order expiration) when you archive financial transactions. This function is useful if the due date of the order has been exceeded and the transaction is therefore no longer relevant. To prevent orders from being archived or deleted unintentionally, the system checks the minimum retention period of the transaction.

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Transaction and Position Management: Process Unit Summary

You now have an overview of the complete transaction process in the SAP System. You can use SAP Treasury Management to map all possible processing steps - trading, back office, release, and accounting

 SAP AG 1999

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Exercises

Unit: Transaction and Position Management: Process Topic: Trading

• Transaction processes in SAP Treasury

You want to gain an overview of the complete transaction process, from the trading stage through to back office and accounting.

1-1

Assignment to cash management levels: Assign your product type PXX for fixed-term deposits to cash management levels for your company code: − Make the assignment for the activity category: 10

Contract

− Assign your product type PXX to the following levels: Level: Level:

"TB" Time deposits: Banks "TP" Time deposits: Subledger

− You can use the following entries as a basis: - Product type 51A - Activity category 10 1-2

Create another fixed-term deposit (term: 3 months) in the application using your product type PXX. Check the cash position of your fixed-term deposit in Cash Management for the level "Time deposits: Banks".

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Unit: Transaction and Position Management: Process Topic: Back Office



2-1

Correspondence Check the possible correspondence types for money market transactions in Customizing. Assign the following forms to your fixed-term deposit product type PXX. Pay attention to the different activity categories:

−

Confirmation letter

Form: F_TR_ CONFIRM_ALL

−

Dealing slip

Form: F_TR_ DEALER_ALL

Generate a dealing slip and a confirmation letter for a newly-created transaction in the application. If necessary, match the counterconfirmation for external correspondence.

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Unit: Transaction and Position Management: Process Topic: Accounting



3-1

Account assignment reference Define an account assignment reference for fixed-term deposits in UNI and USD: CXX00001 (XX = your group ID) for fixed-term deposits in UNI (fixed-term deposits in UNI B FI G/L account 116113) CXX00002 (XX = your group ID) for fixed-term deposits in USD (Fixed-term deposits in USD B FI G/L account 116114) Create fixed-term deposits in UNI and USD in the application. Use the account assignment references you have just defined.

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3-2

Automatic account assignment reference Define automatic account assignment references for fixed-term deposits in UNI and USD: -

For your company code, choose product category 510 for fixed-term deposits. - Select the following additional characteristics: - Product type - Currency of financial transaction. Define a new characteristic group for business partner CXX, and enter a valid characteristic value (CXX). Define a new characteristic group for product type PXX, and enter a valid characteristic value (PXX). Define two new characteristic groups for the currency of the financial transaction and enter the valid characteristic values (UNI and USD). Reassign the account assignment reference using the new characteristic groups for the business partner, the product type, and the currencies. The characteristic transaction type is not taken into consideration. Use the account assignment reference CXX00001 for fixed-term deposits in UNI with business partner CXX. Use the account assignment reference CXX00002 for fixed-term deposits in USD with business partner CXX. Check the possible combinations. Create fixed-term deposits in UNI and USD in the application. Does the system default to the correct account assignment reference?

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3-3

Account determination Create a fixed-term deposit in UNI with the following conditions: - Nominal interest - Full repayment upon maturity Check the account determination settings for your fixed-term deposit in the chart of accounts INT. Define account determination for your own flow types: - BXX1 - BXX3 - BXX5

Principal increase Full repayment upon maturity Nominal interest

Copy the following sample flow type settings (menu: Edit -> Copy):

New setting

Copy reference

FType

FType

Direction

Pmnt trans.

1100 1120 1200

+ +

+ + +

BXX1 BXX3 BXX5

Principal increase Repayment upon maturity Nominal interest

Create a fixed-term deposit in UNI in the Treasury application. Check the cash flow. Post the transaction in Financial Accounting (update run). To which G/L accounts are postings made? What changes can you see in Cash Management?

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Solutions

Unit: Transaction and Position Management: Process Topic: Trading

1-1

Assignment to Cash Management levels: Customizing: Treasury Treasury Management Money Market Transaction Management Product Types Assign Planning Levels Only enter your company code!

1-2

Creating a fixed-term deposit: Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create

Checking the cash position in Cash Management: Application: Treasury Cash Management Information System Reports on Cash Management Liquidity Analyses Cash Position You may need to use the variant AC805-TFS-Bank and change the company code.

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Unit: Transaction and Position Management: Process Topic: Back Office

2-1

Checking correspondence types: Customizing: Treasury Treasury Management Basic Functions Transaction Management Define Correspondence Types

Assigning forms: Customizing: Treasury Treasury Management Money Market Functions Correspondence Define Correspondence Activities Button: New entries

Generating dealing slips and confirmation letters: Application: Treasury Treasury Management Money Market Back Office Correspondence Outgoing Correspondence

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Matching counterconfirmations: Application: Treasury Treasury Management Money Market Back Office Correspondence Incoming Confirmations Enter the data you receive from the bank or your business partner. The system matches the confirmations and assigns the transaction to you. Save your entries.

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Unit: Transaction and Position Management: Process Topic: Accounting

3-1

Defining the account assignment reference:

Customizing: Treasury Treasury Management Money Market Functions Accounting Account Assignment Reference Define Settings Button: New entries

Creating fixed-term deposits in UNI and USD Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create

3-2

Automatic account assignment reference: Customizing: Treasury Treasury Management Money Market Functions Accounting Account Assignment Reference Define Automatic Determination

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Create fixed-term deposit investments in UNI and USD. Does the system default to the correct account assignment reference? Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create Button: Administration 3-3

Checking account determination for fixed-term deposits in the chart of accounts INT: Customizing: Treasury Treasury Management Money Market Functions Accounting Account Determination Define Settings

Define account determination for your own flow types.

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Contents: Posting via G/L accounts Standard payment program Payment program for payment requests

 SAP AG 1999

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Payment Program for Payment Requests: Unit Objectives

At the conclusion of this unit, you will be able to: Explain the various posting options in SAP Treasury Management Configure and run the payment program for payment requests

 SAP AG 1999

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Payment Program for Payment Requests: Business Scenario

You want to familiarize yourself with the various options for transferring the Treasury data that is relevant for posting to Financial Accounting. In addition to making preliminary postings to bank clearing accounts, you can also use two payment programs to make actual payments. These payment programs will now be explained in more detail.

 SAP AG 1999


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Processing Payment Transactions

- Posting to bank clearing accounts - Clearing on basis of bank statement

Business partner

House bank

- Active payment using the payment program

SAP AG

Business partner Example: Subsidiary

USD

 SAP AG 1999

If you conclude financial transactions with business partners that are also one of the company's house banks, you do not usually make active payments. In this case, the business partner (= house bank) makes the corresponding postings to your bank account. The flows posted to the bank clearing accounts by Treasury Management are cleared when the bank statement is received. If you conclude financial transactions with business partners that are not house banks, you have to make an active payment (triggered by your company or your business partner). Two programs are available for making payments in the Treasury area: You can use the FI payment program, which is based on postings to customer accounts. The business partner must have been created in the system as a customer. The postings from TR-TM generate open items in the customer account, which are then settled using the FI payment program ("Automatic payment transactions".). Alternatively, you can use the Payment program for payment requests, which processes payments on the basis of G/L accounts. In this case, the posting generates "payment requests", which are then settled by the payment program for payment requests ("Automatic payment transactions for payment requests").

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Processing Payment Transactions: Overview

FI pmnt program

Pmnt prog. for PR

Four alternatives: 1) Post to G/L accounts

-

-

2) Post to G/L accounts with payment request

-

x

3) Post to customer accounts

x

-

-

x]

[ 4) Post to customer accounts with payment request

 SAP AG 1999

Use of the four alternatives - Examples: 1) Transactions with the house bank are usually processed as pure G/L account postings. 2) Transactions with a partner that is not a house bank, without using a customer account Payment using the payment program for payment requests. Payment requests are documents used to generate payment media. They are usually generated automatically when you post flows that are due. The payments are then made individually or jointly using the payment program for payment requests (F111). 3) Transactions with a partner that is not a house bank, using a customer account. Payment using the FI payment program. 4) Transactions with a partner that is not a house bank, using a customer account. Payments made with the payment program for payment requests in order to use the netting option.

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1) Posting to G/L Accounts

Business partner

Bank

House bank


Transaction - Payment Details D Currency ...

House bank

Acct ID

+

UNI

...

DB

GIRUN

-

UNI

...

DB

GIRUN

Payment activity

Payment request

 SAP AG 1999

In the transaction, you enter the information required for processing payments on the Payment details tab. In the case of a pure G/L account posting, you must enter the following: D:

Direction of the flow (inflow, outflow)

Currency:

Currency of the flow

House bank:

House bank key (ID)

Account ID:

Key for the account with the house bank

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1) Posting...

... via clearing accounts Fixed-term deposit position (Deuba)

House bank account (Deuba)

100 m

100 m

IDES Fixed-term deposit

House bank DEUBA

Bank clearing acct 100 m

Fixed-term deposit

100 m

Statement from bank

 SAP AG 1999

If you conclude financial transactions with business partners that are also house banks, you do not usually make active payments. In this case, the corresponding flows are posted to the bank account by the business partner. The flows posted to the bank clearing accounts by Treasury Management are cleared when the bank statement is received.

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3) Posting to Customer Accounts

Business partner

Bank

House bank


Transaction - Payment details D Currency ...

House Account Payment activity bank ID

Payer/ee

PBank Pmnt mth.

+

UNI

...

DB

GIRUN

X

Recipient

B1

U

-

UNI

...

DB

GIRUN

X

Recipient

B1

U

 SAP AG 1999

In the transaction, you enter the information required for processing payments on the Payment details tab. The entries required for payment using the FI payment program on the basis of customer accounts include: D:


Currency:


House bank:

House bank key (ID)

Account ID:


Payment acty: X = Posting to customer account Payer/ee:

Person receiving the payment (usually the business partner)

PBank:

Partner bank ID (encodes the bank details - bank and account - of the payee)

Payment method: Procedure used to process payments (in the payment run), for example U = transfer If you make postings to customer accounts and use the FI payment program, the system uses the house bank specified for the customer. If no house bank has been specified for the customer, the system uses the house bank defined in account determination for the FI payment program. The entries on the Payment details tab in the transaction are not used.

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3) Processing Payment Transactions...

…via customer accounts Fixed-term deposit Fixed-term deposit position (broker)

House bank Current account (Deuba)

100 m 50 m

150 m

100 m 50 m

1st fixed-term deposit 2nd fixed-term deposit

Broker

Payment order House bank DEUBA

Customer (broker) 150 m

IDES

Payment


150 m

Payment (Trigger PR run) Bank statement

 SAP AG 1999

If you want to make active payments using the FI payment program, you must post the payment flows to customer accounts. In other words, you have to create the business partner as a customer. The postings from TR-TM generate open items on this customer account, which are then settled by the FI payment program ("Automatic payment transactions").

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3) Automatic Payment: FI Payment Program Payment control

Current parameters

Master

Documents Proposal run Proposal data set

Edit proposal

Payment run Print data set Print program Check Bank transfer Eurocheck

Payment advice note

Payment summary

IDOC

 SAP AG 1999

One of the options is to make postings to customer accounts and use the FI payment program. This option is used in the loans area, for example. In connection with account determination in the Treasury posting interface, you can control whether payment activities involve a flow of funds. You can post transactions directly to the payer/ee in order to generate corresponding payment documents using the payment program. Functions of the payment program: Automatic selection of the items to be paid and any exceptions (such as blocked items) Generation of payment documents (customer accounts / vendor accounts) Generation of payment data Generation of payment lists and logs Generation of payment media (such as checks) for this payment data by print programs You usually carry out a payment proposal run first. This run creates a proposal data set, which you can edit prior to the actual payment run.

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2) + 4) Automatic Payment: Payment Program for PR

Business partner

Bank

House bank


Business partner - Payment details D Currency ... House Account Payer/ee Partn. bank bank ID

...

Pmnt request

+

UNI

...

DB

GIRUN

Recipient

B1

...

X

-

UNI

...

DB

GIRUN Recipient

B1

...

X

Indiv. pmnt

Pmnt mth. ESU

X

ESU

 SAP AG 1999

To use the payment program for payment requests, you must enter the following data: D:


Currency:


House bank:

House bank key (ID)

Account ID:


Payment activity:

Blank = G/L account posting, or X = customer account posting

Payer/ee:

Person receiving the payment (usually the business partner)

Partner bank:

Partner bank ID (encodes the bank details - bank and account - of the payee)

Payment request:

Blank = Do not generate a payment request X = Generate a payment request

Individual payment: Blank = This payment flow may be settled together with other flows, for example for netting purposes Payment methods:

List of payment methods used to process payments in the payment run

If you post payments using the payment program for payment requests, you can define in Customizing which bank account should be used - the bank account specified in the payment details for the transaction, or the bank account found using account determination for the payment program.

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Processing Payment Transactions

2)+4)...via a clearing account for payment requests Fixed-term deposit Fixed-term deposit position (broker)

House bank Current account (Deuba)

100 m 50 m

House bank DEUBA

100 m 50 m

1st Fixed-term deposit 2nd Fixed term deposit

Broker

Payment order

150 m

2) Clearing acct for PR 4) Customer account 150 m

IDES

Payment


150 m

Payment (Trigger PR run) Bank statement

 SAP AG 1999

If you conclude transactions with a partner that is not a house bank, and you want to make active payments, you have the option of generating "payment requests". Payment requests are processed using a special payment program - the payment program for payment requests. Example: You conclude several transactions with a partner that is not a house bank. When you post the fixed-term deposit, the system automatically generates a payment request. Payment requests are managed in the clearing account for payment requests. You can group/net the payments from payment requests. To make the payment, you trigger a payment run in accounting, and the system transfers the payment amount to the bank clearing account. At the same time, it generates a payment medium, which is passed on to the house bank. When the bank statement arrives, the payment is posted to the bank account.

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2) + 4) Automatic Payment: Payment Program for PR Payment control

Current parameters

Master

Payment request

Proposal run

Documents Proposal data set

Edit proposal

Payment run Print data set Print program Check Bank transfer Eurocheck

Payment advice note

Payment summary

IDOC

 SAP AG 1999

Functions of the payment program for payment requests: Generation of payment requests (PR): Automatic request selection Generation of payment documents (customer accounts / vendor accounts / G/L accounts): Transfer posting to the corresponding bank (sub-)accounts for each house bank and currency Generation of payment data Generation of payment lists and logs Generation of payment media (such as checks) for this payment data by print programs You usually carry out a payment proposal run first. This run creates a proposal data set, which you can edit prior to the actual payment run.

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Prerequisites You must maintain the relevant Customizing settings for the standard payment program. You must make additional settings for the payment program for payment requests.

Use The payment program settles payment requests (PR). It can be used in conjunction with postings to: Customer accounts Vendor accounts G/L accounts

 SAP AG 1999

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Payment Requests: Customizing

Define the number range for payment requests. Set up and assign a planning level for payment requests for Cash Management. Define a clearing account for payment requests in the chart of accounts. Assign this clearing account to the company code. Where appropriate, make the relevant settings in the Standing Instructions: Set the Payment request and Individual payment indicators; enter a payment method in the list of payment methods. ...

 SAP AG 1999

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Payment Program: Parameters Automatic Payment Transactions: Parameters Payment medium

Additional log

Dynamic selections

Run date

MM/19/YYYY

Posting date

MM/19/YYYY

Identification

1423

Next payment run on

MM/20/YYYY

Payments control Company code

0001

Payment methods

UE

to

1000

Selections Origin

TR-LO TR-TM

to

Vendor account

to

Customer account

to

G/L account

bis

Further selections Documents entered up to Documents up to

MM/19/YYYY /

 SAP AG 1999

You can use field selection control to show or suppress the fields for the input parameters. In Customizing for bank accounting, you can define which of the following fields should appear and be ready for input when payment parameters are entered: -

Vendor accounts Customer accounts G/L accounts Created on Origin

You can use Origin indicator to define the applications for which payments should be generated.

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Origin Indicator

New Origin indicator to specify the application for which payments are to be generated Possible values: TR-CM-BT, TR-TM, TR-LO If payment requests have different origins: Payment requests can be netted You control how payment requests are netted in Customizing for bank accounting The payment program only uses the attributes of the indicator for which the Grouping flag is set.

 SAP AG 1999

The origin indicator is a new field. You use it to specify the application for which you want to generate payments, and to determine how the payment should be processed. Origin indicators for the following applications that generate payment requests are delivered with the system: TR-CM-BT (Bank account transfers from Cash Management) TR-TM (Transactions from the Treasury Management areas money market, foreign exchange, securities, and derivatives) TR-LO (Transactions from Loans Management)

© SAP AG

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Payment Program: Field Selection Control

You can determine which fields are shown or suppressed on the screen for entering the payment parameters: Vendor accounts

Selections

Origin Vendor accounts Customer accounts G/L accounts Created on

Customer accounts G/L accounts

Distribution

ALE active

Created on Origin

 SAP AG 1999

In the global settings for bank accounting in Customizing, you can define which of the following fields should appear and be ready for input in the screen for entering payment parameters: -

Vendor accounts Customer accounts G/L accounts Created on Origin

If you do not want to make any restrictions, and always want to make payments for all the items that are due, do not select any of the fields.

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Customizing: Origin Indicator Display View "Origin Settings": Overview

Origin settings Available amts Account determ. Origin Name TR-CM-BT Bank account transfers TR - LO Loans Management TR - TM

Grouping

Collective posting

Treasury Management

Customizing settings for each origin indicator: Do not check available amounts (Y/N) Account determination from application or payment program (to determine bank clearing account) Grouping flag: Use the attributes of this indicator (Y/N)  SAP AG 1999

The Customizing settings for the origin indicator let you control how the payment transactions are processed: Should the payment program check the available amounts? If you set this indicator, the payment program for payment requests does not check the available amounts. Should the bank clearing account for the payment be taken from account determination for the application or account determination for the payment program? If you do not set this indicator, the system takes the bank clearing account from account determination for the payment program. The result of account determination in the application is ignored. If payment requests with different origins are netted, should the system use the attributes defined for a certain origin? If you set this indicator, the payment program uses the attributes for this origin when you net payment requests with different origins. If you want to net payment requests with different origins, you must assign these origins to each other in Customizing (IMG step: Bank Accounting -> Business Transactions -> Payment Transactions -> Payment Handling -> Assign Origin to Combination of Payments).

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Payment Program: Other New Features

You can edit the following in the payment proposal: Payments (block) Payment methods (change) House banks (change)

Reversing payments: Reset clearing posting, reverse payment document Reset clearing postings for payment requests Reverse original transaction

 SAP AG 1999

You can now edit the payment proposals for payment requests (block payments, change payment methods and house banks). The authorization to make these changes is controlled by a new authorization object F_PAYRQ. This object is used to control authorization for creating, reversing and displaying payment requests. The system works out the due date of the payments by counting back the number of days between the value date at the house bank and the date of the payment run, taking the factory calendar into consideration. Payments that are not yet due are shifted to the next payment run. To count back the due date, you must specify the difference in days between the payment run and the value date at your house bank. You can now fully reverse a payment. Transaction F8BW reverses the clearing posting for payment requests. Reversing a payment, including reversal of the original transaction, involves the following steps: 1. Reset clearing posting, reverse payment document 2. Reset clearing postings for payment requests 3. Reverse original transaction

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Netting - General Information If you conclude transactions with business partners that are not house banks, in other words, where payments are actually exchanged, there may be cases where you want to settle several transactions together. Example: Fixed-term deposit in UNI and fixed-term loan in UNI The open payment amounts are netted out and only the net amounts are actually paid. Advantage: Reduced transaction costs and bank charges

For this purpose, you can group transactions in "netting units".

 SAP AG 1999

You can currently net transactions in the money market, foreign exchange, derivatives and securities areas, or across several of these areas. You can either net G/L account payments using G/L account payment requests, or payments posted to customer accounts using customer account payment requests.

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Netting - Process

Making a netting arrangement All netting arrangements are explicit agreements between business partners in order to simplify payment processing. The transaction confirmation (correspondence) contains a Confirmation reference to the other related transactions.

Result after creating a netting unit Changes to the relevant transaction fields are blocked (particularly due date, amounts, house bank data and payment data). The transactions and corresponding payment requests are assigned a common grouping reference.

 SAP AG 1999

Payment requests have a special Grouping term field. You can use this field to control which payment requests you want to separate from others (application). All the payment flows and payment requests linked to the same netting unit are given the same unique grouping term which separates them from other payment requests. This indicates that they should not be grouped together with other requests.

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Netting and Payment Requests

Settlement

Contract Administrative Data

Netting

Administrative Data

SAP AG Transaction 4711 CoCd 0001 Activity PType 51a 1 Basic Data Act.cat. Contract TType 100 CoCd 0001 SAP AG Transactn 4711 PType 51a 1 Activity TType 100 Act.cat. Contract

Posting

Create Netting Transaction: Data

CoCd 0001 SAP AG Transactn 4711 PType 51a 1 Activity Basic Data TType 100 Act. cat. Sttlmnt SAP AG Transactn 4711 CoCd 0001 Activity PType 51a 1 Act.cat. Sttlmnt TType 100

Cat. No. Partn

Transactions

KMP 001 DB

Netting Val.dte 01/01/YY Deutsche Bank

Netting

TR

TR

Treasury: Posting of Flows Testmandant Walldorf

Accounts

FI

Treasury: Buchungen Protokoll

Payment requests

FI

 SAP AG 1999

Netting is a special form of joint payment of transactions. As a rule, all transactions can be paid jointly. Netting represents a specific part of these transactions. The decision to create a netting transaction is not usually taken until shortly before the due date of cash flows. This normally takes place the day the transactions involved are posted. Only then do you know which transactions (e.g. forward exchange and spot exchange transactions) are suitable for net payment. You can group flows together in netted transactions provided they have the same company code the same business partner the same payment date the same payment methods and other payment program criteria

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Payment Program for Payment Requests: Unit Summary

You now have an overview of the various posting and payment options in SAP Treasury Management. In addition, you have learned the procedure for netting financial transactions in the SAP System.

 SAP AG 1999

© SAP AG

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Exercises

Unit: Payment Program for Payment Requests Topic: Executing a Payment Run

• Executing a payment run in SAP Treasury Management

You do not have a current account with your business partner, and must therefore instruct your house bank to make a payment to your business partner's bank. You make the payment using the payment program for payment requests.

1-1

Create a new fixed-term deposit (Product type 51A, Transaction type 100). The start of the term is today. The business partner is the CITIBANK-BROKER (CITI). Since the Citibank broker is not a house bank, you need to make a physical payment from your house bank account at Deutsche Bank. You could also use your partner BPXX. Look at the payment details in the transaction (the payment details have been proposed by the system on the basis of the standing instructions entered for Citibank). Pay particular attention to the settings for the payment program for payment requests.

1-2

Settle the transaction and enter an account assignment reference.

1-3

Post today's principal increase resulting from the transaction. Look at the accounting document (balance sheet account to clearing account for payment requests).

1-4

Look at the open items in the clearing account for payment requests in Financial Accounting.

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1-5

Carry out the payment run. - Run date: - ID:

TODAY TRXX (XX = your group ID)

Enter the parameters: - Posting date: - Due by: - Payment methods: - Bank account: - Docs entered up to:

TODAY TODAY U = Transfer (outgoing payment only) 118888 TODAY

Also enter the details for the additional log: - Opt for payment method selection in all cases for account 118888. Save your parameter entries. Schedule a proposal run to start immediately, and then display the log. Now schedule the actual payment run (start immediately) and display the log. The status message "Posting orders: 1 generated, 1 completed" should appear. 1-6

Look at the cleared items in the FI clearing account for payment requests. The payment run has cleared the clearing account for payment requests and posted the payments to the bank clearing account 113105. This account will be cleared when the bank statement is posted.

© SAP AG

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Solutions

Unit: Payment Program for Payment Requests Topic: Executing a Payment Run

1-1

Creating a new fixed-term deposit, start of term = today Application: Treasury Treasury Management Money Market Trading Fixed-Term Deposit Create

Check the payment details in the transaction. Tab: Payment details DB is entered as the house bank, and GIRUN as the house bank account. The payee is CITI. The key for the payee bank details is LZB01. The Payment requests indicator is set. The possible payment methods are direct debit for incoming payments, and checks and transfers for outgoing payments.

© SAP AG

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1-2

Settling the transaction and entering an account assignment reference:

Application: Treasury Treasury Management Money Market Back Office Fixed-Term Deposit Settle 1-3

Posting the principle increase for the transaction:

Application: Treasury Treasury Management Money Market Accounting Posting Execute 1-4

Viewing the open items in the clearing account for payment requests in Financial Accounting: Application: Financial Accounting General Ledger Account Display/Change Line Items Enter: Account 118888 Select Open items field

© SAP AG

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1-5

Performing the payment run: Application: Treasury Treasury Management Money Market Accounting Payment Payment Request Enter the parameters Button: Parameters Enter the details for the additional log Button: Additional log Save your parameter entries. Schedule a proposal run to start immediately, and then display the log. Button: Proposal Button: Proposal run log Now schedule the actual payment run (start immediately) and display the log. Button: Payment run Button: Payment run log The status message "Posting orders: 1 generated, 1 completed" should appear.

© SAP AG

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1-6

Viewing the cleared items in the clearing account for payment requests in Financial Accounting: Application: Financial Accounting General Ledger Account Display/Change Line Items Enter: Account 118888 Select Cleared items field The original posting document now contains information on the clearing posting.

The payment run has cleared the clearing account for payment requests and posted the payments to the bank clearing account 113105. This account will be cleared when the bank statement is posted.

© SAP AG

AC810

9-31

Market Data Management

Contents: Data: overview Manual maintenance Market data transfer from spreadsheets Market data file interface Datafeed interface Market data monitoring

 SAP AG 1999

© SAP AG

AC810

10-1

Market Data Management: Unit Objectives

At the conclusion of this unit, you will be able to: Explain the various options for entering and importing market data into the SAP system

 SAP AG 1999

© SAP AG

AC810

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© SAP AG

AC810

10-3

Market Data Management: Business Scenario

Before you can conclude certain transactions (such as forex or securities transactions), you must fill the market data tables in the SAP system. You can fill the tables in different ways: Manually Using a spreadsheet Using a file interface Using a datafeed link

 SAP AG 1999


© SAP AG

AC810

10-4

Market Data: Overview

The following market data can be imported into the SAP system: Rates and prices: Exchange rates

Indexes (not used in MRM) Indexes (not used in MRM) Commodities (not used in MRM)

Statistics data:

Via file interface

Reference interest rates (such as LIBOR, EURIBOR)

Via datafeed

Securities prices

Volatilities Correlations Beta factors (not used in MRM)

 SAP AG 1999

The datafeed function groups the above rate and price information into instrument classes: Instrument class 01 02 03 04 05 21 31 32 33 34

© SAP AG

Name Currencies Securities Interest rates Indexes Commodities Forwards (swap rates) Currency volatilities Securities volatilities Interest rate volatilities Index volatilities

AC810

10-5

Market Data: Current Exchange Rates

Type 0011 0011 0012 0012 0013 0013 0014 0014 0021 0021 0022 0022 0023 0023 0024 0024

From UNI USD UNI USD UNI USD UNI USD UNI USD UNI USD UNI USD UNI USD

To USD UNI USD UNI USD UNI USD UNI USD UNI USD UNI USD UNI USD UNI

Valid from 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY

Rate Translation ratios 1: 1 0.57143 1: 1 1.75000 1: 1 0.57143 1: 1 1.75000 1: 1 0.57143 1: 1 1.75000 1: 1 0.55555 1.80000 1: 1 0.57143 1: 1 1.75000 1: 1 0.57143 1: 1 1.75000 1: 1 0.57143 1: 1 1.75000 1: 1 0.55555 1: 1 1.80000 1: 1

 SAP AG 1999

One way of entering market data in the SAP system is to enter it manually. You first have to define the different types of market data in Customizing. Examples: - Define the rate types for exchange rates - Define the reference interest rate names for interest rates (such as LIB_6_UNI) - ... You then maintain the current market data, either in Customizing or in the application.

© SAP AG

AC810

10-6

Market Data: Current Reference Interest Rates

Reference DM_MRM_3MG DM_MRM_4JB DM_MRM_4JG DM_MRM_5JB DM_MRM_5JG DM_MRM_6MB DM_MRM_6MG DM_MRM_7JB DM_MRM_7JG FIB_6 HYPZINS HYPZINS HYPZINS HYPZINS HYPZINS LIB_6

Short text

Eff. from 06/10/YYYY 06/10/YYYY 06/10/YYYY 06/10/YYYY 06/10/YYYY 06/10/YYYY 06/10/YYYY 06/10/YYYY 06/10/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY 01/01/YYYY

Int. rate 6.0000000 6.0000000 6.0000000 6.0000000 6.0000000 6.0000000 6.0000000 6.0000000 6.0000000 7.0000000 5.2500000 5.5000000 5.7500000 6.5000000 6.0000000 8.1000000

Position...

Entry 16 of 66

 SAP AG 1999

You can use the Spreadsheet function (report program RFTBDF_OLE) to call up market data in a spreadsheet directly from R/3 and transfer this data to the system. The former workaround using the file interface is no longer necessary. A template for Microsoft Excel 97 is delivered with the system. If you use a different spreadsheet or version, you will need to adjust the template.

© SAP AG

AC810

10-7

Market Data File Interface

1. Generate request list 2. Enter data:

- manually - from data provider

3. Import market data file

 SAP AG 1999

Another way of entering market data is by importing it to the SAP System using a file interface. You collect the rates and prices for which you would like to request the current values (in file format) in a request list in R/3. You then fill the request file with current data, either manually or via a data provider. Subsequently, you import the updated file to the R/3 System, and the SAP tables are automatically filled with the new values.

© SAP AG

AC810

10-8

Market Data File: Generate Request List

Output File name

/usr/sap/trans/tmp/request.dat

Instrument class Currencies Securities Interest rates Indexes Selection Key 1 Key 2 Instrument property

to to to

 SAP AG 1999

This function provides a file interface that can generate a list of market data required by R/3. Within the request list, data is grouped according to instrument class (currencies, securities, interest rates and indexes). Check that the directory path of the output file you have specified is valid before you call up the report. If no file with the given file name exists, the report creates one. If a file already exists, the report deletes the contents and fills it with the current request data.

© SAP AG

AC810

10-9

Market Data File: Import File

File Name

/usr/sap/trans/tmp/file

Other Test run

Generate error file

 SAP AG 1999

This function inserts data from an input file with a specific file format into the operative SAP market data tables. Make sure you adhere to this format, since incorrect entries can only be corrected by making time-consuming manual amendments (format: see report documentation).

© SAP AG

AC810

10-10

Market Data File: Customizing

1. Source of market data: Which provider? 2. Conversion tables: Example: Exchange rates Data provider

R/3

Rate type M

=

LAST

Rate type B

=

ASK

...

Enter manually

...

Fill automatically Create Tables for Code Conversion

 SAP AG 1999

Define the data providers for the file interface. For each data provider, you must make the settings for converting the codes used by the R/3 System into the codes used by the data provider for the following: Currencies

(currency names, exchange rate types)

Securities

(exchanges, security price types, security ID)

Reference interest rates

(interest rate definitions)

Indexes

(index definitions, index types)

The market data names you have defined in R/3 need to be entered in the conversion tables. You can either enter the names manually, or let the system fill the conversion tables with all or some of the names automatically (IMG step: Create Tables for Code Conversion). To make the conversion settings, ask your data provider how the names you have defined in R/3 are defined externally, in other words, what the related instrument properties are called.

© SAP AG

AC810

10-11

Datafeed Architecture

SAP R/3

Datafeed provider

TR applications

Market data buffer

Translation table

Forex

...

Information providers

Reply

Request

Market Risk Securities Mgmt

Operative SAP tables

External interface program

Refresh

Reply Request

Datafeed

Internet/ RFC

Log

Datafeed server

 SAP AG 1999

You can also use the datafeed interface to import market data into the SAP system. To do so, you must install a stock exchange information system and a corresponding partner program with which the R/3 datafeed interface can communicate.

© SAP AG

AC810

10-12

Datafeed Interface

1. Refresh current data 2. Display current data ... ......... R/3

Data provider

Display market data Buffer Ref. int. rates Ref. int. rates Ref. int. rates 3.4 LIB_6_UNI LIB_6_UNI 3.4 ... ... LIB_6_UNI 3.4 ...

Refresh market data

Data

(save, if required)

 SAP AG 1999

You can "update" selected market data by importing current values via the datafeed interface and writing them to a market data buffer. To save the updated values to the market data tables, set the corresponding flag when you request the market data. (prerequisite: you have also set the relevant flag in the Customizing settings for the translation table) You can update the values for all instrument classes, or just selected classes (currencies, securities, interest rates, indexes, forwards, volatilities for currencies/interest/securities/indexes). The Display Market Data function displays the market data last imported into the buffer.

© SAP AG

AC810

10-13

Datafeed: Customizing

Technical settings Define datafeed name Define RFC destination, assign Mode (type of connection):

- synchronous - asynchronous (= transactional)

Conversion tables / translation table Schedule market data retrieval

 SAP AG 1999

Technical Settings: Settings for communication between the R/3 System and the external partner program; settings for the results/error log. Translation Table: Definition of the required market data and the external datafeed notation; settings for requesting and updating market data. Schedule Market Data Retrieval: Definition of the market data to be requested and the request times.

© SAP AG

AC810

10-14

Define Datafeed Name

Data provider Description Bridge Telerate TTRS/RFE TELERATE Reuters SSL Interface REUTERS

Position...

Entry 1 of 1

 SAP AG 1999

In this IMG step, you define the datafeed name. You use this name to make requests from the application.

© SAP AG

AC810

10-15

Define RFC Destination

RFC destination

RFC_DATAFEED_SYNC

Gateway

Technical settings Connection type T

TCP/IP connection Start

Activation type

Registration

Trace

Start on Application server

Explicit host

Front-end workstation

Explicit host Program Target host

/usr/aws/bin/rfc_datafeed hw1455.wdf.sap-ag.de

Description Datafeed connection: Dow Jones Telerate to R/3  SAP AG 1999

In this IMG step, you define all the logical links between the external partner program of the datafeed provider and the R/3 System. These logical links are called RFC (Remote Function Call) destinations and can be set up synchronously or asynchronously.

© SAP AG

AC810

10-16

Synchronous Communication

SAP R/3 process


Time

Activity

Requ est

External communication Unnecessary waiting time

Activity External communication

Activity

Reply

Data transfer is not repeated if an error occurs!

 SAP AG 1999

If data is transferred synchronously, the external program is responsible for keeping the communication channel to the R/3 function module requesting the data open, since the R/3 module waits until it receives the requested values or an error message. Once the requested data has been transferred, the connection is deactivated.

© SAP AG

AC810

10-17

Asynchronous (Transactional) Communication

Time

SAP R/3 processes Requ Activity

Network error

est

Reply 1st atte


mpt / 1

st part

Activity waiting time Activity

y Repl

Activity

part / 1st t p attem 2nd

External communication

Activity

t ply par d Re n t/2

Activity

em att 1st

External communication

p

 SAP AG 1999

If the data is transferred synchronously, the request table is transferred to the external program. The connection is then deactivated. Once the external program is ready to deliver data, it dials into the R/3 System independently and sends the reply. To use asynchronous communication, you must set up a special R/3 user (user type CPIC, authorization F_DTFEED_ALL). Advantages: Large requests do not block R/3 batch jobs and online processes. Error situations are minimized (network problems, feed problems, ...). If an error occurs, R/3 automatically repeats the data transfer. Market data can be delivered in blocks according to priority.

© SAP AG

AC810

10-18

Conversion Tables / Translation Table

Conversion tables Maintain manually or generate automatically

Translation table Maintain manually or generate automatically ( = copy master data) Special case - Securities: Import Securities Information from Datafeed Provider Check translation table

 SAP AG 1999

© SAP AG

AC810

10-19

Datafeed: Conversion Tables

Example: Securities

R/3

Data provider

Security price type 05 Closing price

External security price type =

...

Enter manually

CLOSE ...

Fill automatically Create Tables for Code Conversion

 SAP AG 1999

For each data provider, you must make the settings for converting the codes used by the R/3 System into the codes used by the data provider for the following: Currencies

(exchange rate types)

Securities

(security price types)

Volatilities

(volatility types)

Indexes

(index types)

To make the conversion settings, ask your data provider how the names you have defined in R/3 are defined externally, in other words, what the related instrument properties are called.

© SAP AG

AC810

10-20

Datafeed: Translation Table

Example: Securities

Data provider

R/3

Security price type Security ID no. Exchange

=

CLOSE

=

FSAG

...

Enter manually

...

Fill automatically Automatic Entry of Data in the Translation Table (= copy master data)

 SAP AG 1999

The translation table links the R/3 notations for the market data to the corresponding datafeed notations used by the external partner program. The R/3 notation can be derived automatically from the existing master data in R/3. You must enter the datafeed notation and any additional information manually. If you have already defined conversion codes, and fill the translation table automatically, the system converts the corresponding data and enters the instrument property in datafeed notation as the default value in the translation table. Defining the conversion codes beforehand saves you from having to maintain the translation table manually.

© SAP AG

AC810

10-21

Fill Translation Table Automatically (= Copy Master Data)

Select master data Currencies Securities Interest rates Indexes Datafeed Name

TELERATE

Selection 1st key definition

to

2nd key definition Instrument property

to to

 SAP AG 1999

© SAP AG

AC810

10-22

Maintain Translation Table: Securities

Instr. class

02

Security 0000000716460 0000000716460 0000000716460 0000000716460 0000000716463 0000000716463 0000000716463 0000000716463 0000000804010 0000000815510 0000000815510 0000000815512 0000000815512

Exchange FRANKFURT FRANKFURT XETRA XETRA FRANKFURT FRANKFURT XETRA XETRA XETRA FRANKFURT XETRA FRANKFURT XETRA

RT 01 05 01 05 01 05 01 05 01 01 01 01 01

Datafeed BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE BRIDGE

Instrument =FSAG =FSAG LQSAG LQSAG =FSAG3 =FSAG3 LQSAG3 LQSAG3 LQDBK =KCKST LQCKST =FCKSV LQCKSV

 SAP AG 1999

In the translation table you maintain the external datafeed notations and all the necessary parameters for the data provider. Example: R/3 notation: Security name: 716463 (SAP preference) Exchange: Frankfurt Rate type: 05 Datafeed notation (example for Dow Jones, April 1998): Instrument name: =FSAP3 Data source: BRIDGE Instrument property: CLOSE In the detail screen, you can set an indicator for each class to determine whether the user should have the option of saving the imported security prices permanently. If this is the case, the user can set an indicator in the application to actually save the updated values. (This save option is available for all types of datafeed data.)

© SAP AG

AC810

10-23

Import Securities Information from Datafeed Provider

Datafeed Name

TELERATE

Datafeed provider file to be imported /usr/sap/trans/tmp/germany File name Securities selection Security name Exchange

to to

Names for security price type 05 R/3 name CLOSE Datafeed name

 SAP AG 1999

Import Securities Information from Datafeed Provider: If the datafeed provider supports this function, you can import a file for each security price you request, which automatically translates the R/3 notation into the datafeed notation in the translation table and adds the relevant datafeed parameters. Prerequisites: You must use the same name in the security class data in R/3 as the datafeed provider uses, and the datafeed provider must make an input file available.

© SAP AG

AC810

10-24

Check Translation Table

Datafeed Name

TELERATE

Market data selection to

Instrument class 1st key definition

02 0000000716460

to

2nd key definition

FRANKFURT

to

Instrument property

0000000716463

to

 SAP AG 1999

This report checks whether the translation table is fully configured. Incorrect and incomplete entries are displayed in an error list.

© SAP AG

AC810

10-25

File Interface / Datafeed: Market Data Monitoring

Class 01 02 03 04 31 33

Percent 5 5 5 5 5 5

 SAP AG 1999

You can define a maximum tolerance limit for price deviations per instrument class. When you import market data, the system checks whether the price deviations fall within these limits. If the difference between the new price and the most recently imported price exceeds the defined range, the error log contains a warning message. This allows you to identify incorrect prices, which you can then adjust manually.

© SAP AG

AC810

10-26

Market Data Management: Unit Summary

You are now familiar with the various options for managing market data in the SAP System. By configuring the datafeed interface, you can import external market data to the SAP system upon request.

 SAP AG 1999

© SAP AG

AC810

10-27

Information System

Contents: Overview of reporting options Standard reports

 SAP AG 1999

© SAP AG

AC810

11-1

Information System: Unit Objectives

At the conclusion of this unit, you will be able to: Describe the various reporting options in SAP Treasury

 SAP AG 1999

© SAP AG

AC810

11-2



© SAP AG

AC810

11-3

Information System: Business Scenario

You have created various transactions in the SAP Treasury applications and now want to gain an overview of the reporting options the module offers, including drilldown reporting.

 SAP AG 1999


© SAP AG

AC810

11-4

Information System Structure: Example - Journal ...3 Accounting 3 Treasury 3 Treasury Management 3 Money Market Area-specific journal

3 Information System 3 Transaction 3 Information System 3 3 Treasury Reports

Transaction Overview 3 Journal - Money Market

3 Treasury: Strategic View 3 Treasury: Operative View 3 Transaction

Cross-application journal

3 Transaction Overview 3 Journal: Money Market, Forex, Derivatives, Securities  SAP AG 1999

For an overview of all Treasury reports, see Treasury Reports. You find the cross-Treasury reports in the menu option Treasury: Strategic View. These include reports from Cash Management for analyzing liquidity, reports from the Limit Management and Market Risk Management areas for controlling risk, and cross-Treasury reports for analyzing your positions and revenue. For detailed analyses that support work processes in day-to-day business, see the menu option Treasury: Operative View. Information on area-specific reporting is aggregated in the cross-application reporting section in the Treasury Information System. The reporting tree displays a complete directory of all reports defined in Treasury that can be assigned to users. You can assign reports, like transactions, to specific users (role-specific).

© SAP AG

AC810

11-5

Money Market: Journal

Overview list of Money Market transactions Information on

Company code 1000 Product type 51A Transaction Act. categ. 1 Contract

Transaction type

Counterparty Portfolio Fin. project Status Curr. Amount StartTerm 1000 Deutsche Bank Active UNI 100,000.00 09/06/YYYY

Company code 1000 Product type 52A Transaction Act. categ. 3 Contract

Ent./Changed on 09/06/YYYY

IDES AG Fixed-term deposit

IDES AG Deposit at notice

Trader StartRoll.

100 Investment

OutConf. EndTerm 1 required 11/06/YYYY

IncomConf. Int. rate 1 required 2.5

ContDate Valid since 09/06/YYYY 09/06/YYYY

Chgd/Entd on Chgd/Entrd 09/06/YYYY BAUERT

Ent./Changed on 09/06/YYYY Transaction type

Counterparty Portfolio Fin. project Status Curr. Amount StartTerm 1000 Deutsche Bank Active UNI 100,000.00 09/06/YYYY

Trader StartRoll.

100 Investment

OutConf. 1 required

IncomConf. ContDate Int. rate Valid since 1 required 09/06/YYYY 2.6 09/06/YYYY

Chgd/Entd on Chgd/Entrd 09/06/YYYY BAUERT

 SAP AG 1999

The Money Market journal enables you to call up an overview of the money market transactions stored in the system using any number of selection criteria. For each selection, you can define selection options (single values or ranges, incl./excl.). You can use the journal to select transactions, for example, that were concluded with certain traders or with certain business partners.

© SAP AG

AC810

11-6

Payment Schedule Area-specific payment schedule

Cross-application payment schedule

Payment schedule: Money Market, Forex, Derivatives, Securities

Payment schedule: Money Market

Company code Payment date, payment amount, payment currency Transaction, name Product type, transaction type Posting status, posting release Bank key of house bank, bank account of house bank Bank key of business partner bank, business partner bank account ...  SAP AG 1999

You use the payment schedule to call up incoming and outgoing payments within a specified period. Considerable enhancements have been made to the payment schedule. You can now use the ABAP List Viewer to output lists flexibly, and have the option of: - Defining and saving your own display variants - Sorting by any field - Filtering according to any values - Forming group totals The payment amounts for a payment date are added together automatically, provided all the amounts for this date are in one currency. The layout of the payment schedule is flexible. You can have a maximum width of 255 characters, you can define new column characteristics, or delete existing ones.

© SAP AG

AC810

11-7

Money Market - Position List

CoCd Trans.

PrC TCat

PTypTTypPartner TCurr. Amount

Int. rate

StartTerm

EndTerm ...

1000 1

510 100

51A 100 1000

UNI

100,000.00 2.5

09/06/YYYY11/06/YYYY

1000 3

520 100

52A 100 1000

UNI

100,000.00 2.5

09/06/YYYY

1000 4

510 100

51A 100 1000

UNI

100,000.00 2.7

09/07/YYYY11/07/YYYY

Connection to the ABAP List Viewer

 SAP AG 1999

You can use the position list to carry out profit/loss checks for traders or business partners, by listing transaction types sorted by conditions. The positions for money market transactions are displayed in the position list for specific key dates. You can also select money market transactions that are due as of a certain start of term or up to a certain end of term. The connection to the ABAP List Viewer means you have a whole range of options for generating lists, as regards the row/column layout, and sorting and totaling lists. You can save these as display variants and use them later.

© SAP AG

AC810

11-8

Drilldown Reporting Principle

Portfolio

as a drilldown report

BOND

as a list (list viewer)

Data output

Term From To

MM

Basic transaction

MMkt/Sec./ Loans

Forex/ Derivatives

Open item

as a graphic

FX JPY USD FLOOR

EUR

CAP

Product type

FRA

Currency

 SAP AG 1999

You use the drilldown reporting tool to prepare your own reports and process them interactively. Functions for analyzing the results graphically, or transferring them to PC applications, as well as features that enable you to link reports and assign them to a hierarchical tree structure, all contribute to make drilldown reporting an extremely flexible reporting instrument. Drilldown reports enable you to represent the information available in different business views by selecting a useful combination of characteristics and key figures. The idea behind drilldown reporting is to make the information you require available in a multidimensional dice. Each cell (= each part of the dice) is specified by characteristics. The characteristics correspond to the dimensions (example: 3 characteristics: portfolio, product type, currency). Each cell contains n key figures (example: 2 key figures: investment/purchase; borrowing/sale). By linking the characteristics and key figures, you can generate different views from the possible combinations of the corresponding values.

© SAP AG

AC810

11-9

Drilldown Reporting Principle Characteristics

Key figures Forms

Report

Report index

save

save

Winword

( Create ( Change ( Execute Batch list

Lists Graphics Navigation/ Drilldown

Mail

Excel

...

 SAP AG 1999

You can use characteristics, key figures, and forms to define reports. A report compiles a number of lists that you can access interactively and display on your screen. You can also print reports, export them to MS Word or Excel, or enter them in a file. Forms describe the contents and format of reports. Forms provide the basis for reports, which you complete later when you define the reports. Characteristics define the different ways in which the dataset can be classified, for example, by company code, business partner, portfolio. You can include characteristics both in forms and reports. Key figures can be amounts and quantities; you can use a key figure transaction to define additional key figures from existing key figures (key figure tree). You can select key figures in forms or in reports. Note: For more detailed information, see the general documentation on Drilldown Reporting.

© SAP AG

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11-10

Functions of Drilldown Reporting Navigation to all levels (characteristics) Exception reporting provides a visual warning when critical values deviate from expectations Hierarchy processing shows external hierarchies (such as flow type hierarchy) Graphics improve visualization of the figures Analysis functions allow you to classify your data Data mining enables you to identify conspicuous values in the dataset automatically Currency translation determines currency influences

 SAP AG 1999

© SAP AG

AC810

11-11

Form Report

Form report For reports prepared individually with form-oriented layout specific formatting (colors, etc.) integration of variables complex selection

 SAP AG 1999

The general maxim for creating reports is that simple tools are available for generating simple reports, while more sophisticated tools are available when you need to generate more complex reports. In the Treasury area, you create form reports. These are reports based on forms and are suitable for printing reports. Drilldown reporting is always related to the business objects of an application. Reports are complex structures, which comprise many subcomponents are language-dependent and can therefore be translated can be transported and delivered contain authorization checks and can therefore be blocked for a specific user. It is now possible to define "Basic reports". When you use these types of reports, you do not need to create forms.

© SAP AG

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11-12

Drilldown Reporting: Overview

Create form

Treasury Management: Application; Customizing

Create reports

Treasury Management: Application; Customizing

Link report to report tree

Treasury Management; Customizing

Execute report

Treasury Management; Application

 SAP AG 1999

© SAP AG

AC810

11-13

Information System: Unit Summary

The reporting functions provide you with additional options for monitoring and evaluating financial transactions in SAP Treasury Management. The drilldown reporting tool, in particular, offers a high degree of flexibility for evaluating your transactions.

 SAP AG 1999

© SAP AG

AC810

11-14

Ac810 Treasury Management Basic Functions[1]

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