BP080 Future Process Model - XTR Issue

Future Process Model

AIM

FUTURE PROCESS MODEL CLIENT Deal Entry to Settlement - Treasury Author:

Consultant

Creation Date:

May 11, 2004

Last Updated:

July 26, 2004

Document Ref:

FSI/300100879/BP080/Issue1.2

Version:

Issue 1

Reviewed and Accepted By:

Deal Entry to Settlement

File Ref: 90959095.doc

Date:

Process Flow Diagrams – Enter Withdrawals 10 of 28

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Document Control Change Record 1

Date

Author

Versio n

15-May04 27-May04 03-Jun-04

Consultant

04-Jun-04

Consultant

26-Jul-04

Consultant

Draft 1a Draft 1b Draft 1c Draft 1c Issue1. 2

Consultant Consultant

Change Reference

After review and suggestion by Deloitte Consulting. Added manange Bonds and stock; edited in reference to Deloittes Consulting review. Merged BR30 Gap analysia Updated Cash Positioning Report Customization requirement.

Reviewers

Name

Position

1.

2. 3. 4. 5. 6.

Distribution

Copy No.

Name

Location

1 2 3 4 5 6

Library Master

Project Library

Note To Holders: If you receive an electronic copy of this document and print it out, please write your name on the equivalent of the cover page, for document control purposes. If you receive a hard copy of this document, please write your name on the front cover, for document control purposes.




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Contents

Document Control..................................................................................2 Introduction...........................................................................................4 Purpose ...........................................................................................4 Scope and Application......................................................................4 Abbreviations...................................................................................4 Assumptions.....................................................................................4 Treasury Event Catalog..........................................................................1 Treasury Business Functions.............................................................1 Process Listing and Process Descriptions................................................2 XTR001 – Enter Deals: Fixed Deposits Short Term Money.................2 Process Flow Diagrams – Enter Deals: Fixed Deposits and Short Term Money ...................................................................................................3 XTR002 – Enter Placements..............................................................4 Process Flow Diagrams – Enter Placements............................................6 XTR003 – Enter Rollovers .................................................................6 Process Flow Diagrams – Enter Rollovers................................................8 XTR004 – Enter Withdrawals.............................................................9 Process Flow Diagrams – Enter Withdrawals.........................................10 XTR005– Enter Inter Account Transfer............................................11 Process Flow Diagrams – Enter Inter Account Transfer..........................12 XTR006 – Generate Journal Entry....................................................13 Process Flow Diagrams – Generate Journal Entries................................14 XTR007– Enter Exposure Transaction for Interest Adjustment.........15 Process Flow Diagrams – Enter Exposure Transaction for Interest Adjustment..........................................................................................16 XTR008– Manage Bonds.................................................................17 Process Flow Diagrams – Manage Bonds...............................................19 XTR009– Manage Stocks.................................................................19 Process Flow Diagrams – Manage Stocks..............................................21 Gap Analysis........................................................................................22 Open and Closed Issues for this Deliverable.........................................25 Open Issues....................................................................................25 Closed Issues..................................................................................25 Deal Entry to Settlement



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Introduction Purpose The purpose of this document is to illustrate the Future Process Models for Treasury – Capturing Al-Mudharabah fixed deposits. These processes describe the accounting related process using the Oracle Treasury (XTR) application to meet the functional requirements of Investment & Treasury Department. The major focus of this document is to center on common accounting processes, transactions and steps associated with each process.

Scope and Application Each business function contains the following sections: • Event Catalog: lists the events associated with Treasury business processes conducted by the Treasury Department • Process Listing and Descriptions: For every event, there is a process, which is executed to resolve the event. • Process Flow Diagram: This section of the document lists the steps associated with each process.

Abbreviations GIAGeneral Investment Account XTR

Oracle Treasury

HQ

Head Quarter

TN

Takaful Nasional

Assumptions The following assumptions are being made: 1. The proposed solution is based on mapping requirement from the TN Print. It has been edited to best fit into Oracle Business Flow for Treasury module. 2. The proposed solution enables TN to capture Al-Mudharabah deposits, Stocks, and Bonds in the future. 3. This document serves as a high level Future Business Model, it is not intended to be used as an operation manual. 4. Payment report for inter-account transfer is sent directly to the respective bank. It will not be coursed through Account Payables. 5. Upon bank reconciliation in Cash Management, Debit amount will be reconciled to treasury transaction through open interface.




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Treasury Event Catalog This component lists all events to which the business responds.

Treasury Business Functions Event ID XTR001

Name

Type

Description

Frequency

Internal

Initial flow to Al-Muharabah entry

As required / Daily

XTR002

Enter Deals: Short Term Money Fixed Deposits Enter Placements

Internal

Entering New Placements Business flow

As required / Daily

XTR003

Enter Rollovers

Internal

As required / Daily

XTR004

Enter Withdrawals

Internal

XTR005

Enter Inter Account Transfer

Internal

XTR006

Generate Journal Entry

Internal

XTR007

Enter Exposure Transaction for Interest Adjustment

Internal

XTR008

Manage Bonds

Internal

Entering Rollovers Placement of Existing Placement Business flow Entering Withdrawals of existing Placement Business flow Entering Inter Account Transfer Business Flow Entering Journal Entries for GL Business Flow Entering Exposure Transaction for Interest Adjustment on existing placement Business flow Entering Bonds Business flow

XTR009

Manage Stocks

Internal

Entering Stocks Business flow

As required / Daily



As required / Daily As required / Daily As required / Daily As required / Daily As required / Daily


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Process Listing and Process Descriptions XTR001 – Enter Deals: Fixed Deposits Short Term Money

ub-process

Sub-process Name

F503

Daily Cash Position Report (Cash Management)

XTR102

Maturities Schedule

XTR103

GIA Reciprocal?

XTR104

Marketing Decides

XTR105

GIA Indicative Rate

XTR106

New Placement?

XTR107

Rollover?



Description of Sub-process

Output

The Daily Cash Position Report is required daily to access how much fund is available for TN. The bank account balances is obtained from Oracle Cash Management The Maturities Schedule can be produce by submitting standard Oracle reports in Treasury. The reports can be viewed on the screen or printed as a hard copy. When entering a placement, TN would decide if its is a GIA Reciprocal deal placement If it is a GIA-Reciprocal Placement, TN Marketing would make decision on FD placement. If it is a GIA Normal Placement, TN would obtain the highest possible indicative rates from the Financial Institution corporate website. If it is New Placement, follow the New Placement business flow. Please refer to XTR002 If it is a Rollover, follow the Rollover business flow (XTR003); else follow the Withdrawal business flow (XTR004).

This is identified as a customization requirement. Please refer to Gap Analysis. XTRG003


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Process Flow Diagrams – Enter Deals: Fixed Deposits and Short Term Money

Start

F503-Daily Cash Position Report (Cash Management)

103-GIA Reciprocal?

102-Maturities Schedule

Optional Generate and Review Maturities Schedule

Customization Report

No

105 -GIA Indicative Rate

Obtain GIA Indicative rates and select the highest rate

Yes

104 -GIA Indicative Rate

For GIA Reciprocal, Marketing makes FD placement decisions

No 106 - New Placement?

No 107 -Rollover?

Yes

Yes

C

Enterprise Roles Treasury User

A

B Marketing User




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XTR002 – Enter Placements

ub-process

Sub-process Name


Output

XTR201

Liaise with Financial Institute about placement details

XTR202

Enter Details in Oracle Treasury

XTR203

Validate the Data Entry in Oracle Treasury

XTR204

Generate the Placement Requisition Form

Generate the Placement Request Form from Oracle Treasury. The form is required as an initial appoval from management to authrorize any placement.

XTR205

Approve Placement?

The Placement Requisition Form would be routed manually to the respective managers for approval.

XTR206

Cancel the Deal In Oracle Treasury

If the placement is rejected, update Oracle Treasury to record the rejection.

XTR207

Generate & Route Placement Letter For Signature

Once approved, the Placement Letter is generated from Oracle Treasury and routed manually for approval. This represents the official placement form for correspondence with financial institutions.

XTR208


If necessary, enter Inter Account transfer for cash placement. Refer to XTR005.

XTR209

Call and Fax to Financial Institute the Placement Letter

Call Financial Institution to confirm placement and fax the authorized Placement Letter to Financial Institution for placement confirmation.



Fund manager would correspond with Financial Institute representative regarding placement details. This represent the initial call to the Financial Institution to confirm on rates offered or advertised by them. Once information is obtained, the placement can be recorded in Oracle Treasury. Enter Al-Mudharabah deposits as Short Term Money Deal. The placement entered requires validation. This enables TN to ensure all deals are captured correctly.


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ub-process

Sub-process Name


Output

XTR210

Authorize the Settlement of the Placement

Authorize the Settlement of the placement in Oracle Treasury.

XTR211

Obtain Certificate from Financial Institute

Obtain the placement certificate from the Financial Institution

XTR212

Generate and Print Reports

Generate Placement listing reports from Oracle Treasury for filing.




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Process Flow Diagrams – Enter Placements XTR003 – Enter Rollovers A Subprocess ID

XTR301

201 -Liaise with Financial Institute Sub-process Name about placement details

202-Enter Details In Oracle Description of Sub-process Treasury

204 -Generate the Output Placement Requisition Form

203- Validate the Data Entry in Oracle Treasury

Liaise with Financial Institute About Rollover Details

Fund manager would correspond with Financial Institute representative regarding placement details. This represent the initial call to the Financial Institution to confirm on rates on rollover. XTR302 Enter Rollover in Renegotiate the repayment amount and interest settlement in Oracle Treasury Oracle Treasury for the Rollover Placement. Decide if the interest would be compounded or withdrawn from the principal 207 – Generate & Yes 208-isEnter 205-Approve amount. Oracle Treasury able to accommodate full or partial Route Placement D Interinterest Account amount. Placement? rollovers of principal and Letter For Signature Transfer XTR303 Validate the Data Entry The Rollover placement entered requires validation. This in enables TN to ensure all deals are captured correctly. Oracle Treasury Enter inter account No

XTR304

Generate the Letter of Requisition form

206 - Cancel the

XTR305 Deal In Oracle Approve Placement? Treasury

XTR306

Cancel the Deal In Oracle Treasury

XTR307

Generate the Letter of Renewal & Route for END Approval

XTR308

Call and Fax Letter of Renewal and Return Old Certificate

transfer in Oracle

Generate the Placement Request Form from Oracle Treasury. Treasury if The form is required asinsufficient an initialfunds appoval from management to authrorize any placement. The Placement Requisition Form would be routed manually to 211-Obtain 209 –Call and Fax 210 - Authorize the the respective managers for approval. Certificate from To Financial Settlement of the Institute the Placement If the placement is rejected, update Oracle Treasury to record Placement Letter

the rejection.

Financial Institute

Renewal Letter is generated from Oracle Treasury and routed manually for approval. 212- Generate Enterprise E placemnent Call Financial Institution to confirm and Roles fax the And Print Treasury authorized Letter of Renewal to Financial Institution for User Reports placement confirmation. Return the Old Certificate if Treasury Super necessary. User




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Subprocess ID

Sub-process Name


XTR309


Generate Placement listing reports from Oracle Treasury for filing.



Output


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Process Flow Diagrams – Enter Rollovers 301 -Liaise with Financial Institute About Rollover Details

B

Yes

305-Approve Placement?

302-Enter Rollover in Oracle Treasury

307 - Generate the Letter of Renewal & Route for Approval

304 - Generate the Letter of Renewal Requisition Form

303- Validate the Data Entry in Oracle Treasury

308 Call Financial Institute and Fax Letter of Renewal and Return Old Certificate

309- Generate And Print Reports

No

E

306 - Cancel the Deal In Oracle Treasury

Enterprise Roles END

Treasury User Treasury Super User




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XTR004 – Enter Withdrawals

ub-process

Sub-process Name


Output

XTR401

Liaise with Financial Institute About Withdrawal Details (Optional)

Fund manager would correspond with Financial Institute representative regarding Withdrawal details if necessary.

XTR402

Renegotiate Withdrawal in Oracle Treasury

Update the Placement for Withdrawal in Oracle Treasury by performing a renegotiation.

XTR403


The Withdrawal entered requires validation. This enables TN to ensure all deals are captured correctly.

XTR404

Generate the Letter of Withdrawal & Route for Approval

Withdrawal Letter is generated from Oracle Treasury and routed manually for approval.

XTR405

Fax Letter of Withdrawal and Return Old Certificate

Fax the authorized Letter of Withdrawal to Financial Institution for withdrawal confirmation. Return the Old Certificate if necessary.

XTR406

Authorize the Settlement of the Interest and Principal in Oracle Treasury

The settlement of the Interest and Principal would be authorized in Oracle Treasury.

XTR407


Generate Withdrawal listing reports from Oracle Treasury for filing.

XTR408

Adjust Interest Rate?

If necessary, adjust interest rate (indicative rate different from actual rate) by using Exposure transactions.




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Process Flow Diagrams – Enter Withdrawals

C

401-Liaise with Financial Institute About Withdrawal Details

404-Generate the Letter of Withdrawal & Route for Approval

403-Validate the Data Entry in Oracle Treasury

402-Renegotiate Withdrawal in Oracle Treasury

Principal repayment amount and interest settlement

405-Fax Letter of Withdrawal and Return Old Certificate

407 - Generate and Print Reports

406 -Authorize the Settlement of the Interest and Principal in Oracle Treasury

408 - Adjust Interest Rate?

Yes

No E

Enterprise Roles Treasury User F Treasury Super User




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XTR005– Enter Inter Account Transfer

ub-process

Sub-process Name


Output

XTR501

Enter Inter Account Transfer in the System

XTR502

Authorize Settlement of Inter Account Transfer in Oracle Treasury

XTR503

Generate Payment Script Or Report

Payment Script or Report can be generated from Oracle Treasury as instruction to finance or banks

XTR504

Obtain Approval of the Payment Report

Payment Report is routed manually for approval

XTR505

Send Payment Report to Bank

Payment report is sent manually to bank

XTR506


Generate Settlement listing reports from Oracle Treasury for filing.



Enter Inter Account Transfer to transfer funds between accounts in Oracle Treasury. Example, transfer fund from BMMB Bank to May Bank for investment. Authorize the settlement of Inter Account transfer in Oracle Treasury


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Process Flow Diagrams – Enter Inter Account Transfer

D

501-Enter Inter Account Transfer in the System

502-Authorize Settlement of Inter Account Transfer in Oracle Treasury

504 -Obtain Approval of The Payment Report

503- Generate Payment Script Or Report

Customization Report

505 – Send Payment Report To Bank

506 - Generate and Print Reports

E

Enterprise Roles Treasury User Treasury Super User




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XTR006 – Generate Journal Entry

ub-process

Sub-process Name


XTR601

Generate and Authorize Batch Accruals

Generate Treasury.

XTR602

Generate Journal Entries for Batch Accruals and Non-Accruals

Generate Journal Entries for the authorized batch accruals and non –accruals. Accrual includes estimated expenses and income. Non-accrual includes cash flow related item from settlement authorization.

XTR603

Review Journal Entries

Review the generated Journal Entries online

XTR604

GL Code or Journal Date Adjustment?

Decide if Journal Entries are correct or require correction.

XTR605

Update Journal Entries

XTR606

Transfer Journal Entries to GL

Update Journal dates or Journal Accounts before transfer to GL Transfer the reviewed Journal entries to General Ledger.

XTR607

Period End GL Procedures



and

Authorize

Batch

Accruals

Output

in

Oracle

Generate Journal Entry listing reports from Oracle General Ledger for filing.


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Process Flow Diagrams – Generate Journal Entries E

602-Generate Journal Entries for Batch Accruals and Non-Accruals

601 -Generate and Authorize Batch Accruals

604 -Adjust GL Code or Journal Date?

No

606Transfer Journal Entries to GL

603-Review Journal Entries

607Period End GL Procedures

END

Yes

605-Update Journal Entries Enterprise Roles Treasury User Treasury Super User Finance Super User




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XTR007– Enter Exposure Transaction for Interest Adjustment

ub-process

Sub-process Name


Output

XTR701

Compute for Interest Adjustment

Manual computation of Interest adjustment (difference between indicative rate and maturity rate)

XTR702

Enter Interest Adjustment using Exposure Transactions

Enter the adjustment as an Exposure Transactions in Oracle Treasury. Capture the confirmed maturity profit rate, and the difference in interest yield. Screen would be customized to auto calculate the interest amount.

XTR703

Validate the data Entry in Oracle Treasury

The data entry would be validated before processing.

XTR704

Authorize the Settlement in Oracle Treasury

The Settlement of the Interest and Principal would be authorized in Oracle Treasury.




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Process Flow Diagrams – Enter Exposure Transaction for Interest Adjustment

F

701-Compute For Interest Adjustment

702 - Enter Interest Adjustment using Exposure Transactions

703 - Validate the data Entry in Oracle Treasury

704 - Authorize the Settlement in Oracle Treasury

Customized screen to auto calculate interest amount from principal

F





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XTR008– Manage Bonds

ub-process

Sub-process Name


Output

XTR801

Investment Community Bonds Decision

Bonds activity decision is based on the outcome of the Investment community. The Investment Community decides if the Bond to be entered is New, or a Resell Bond

XTR802

Enter Resell Bonds information

Use the Fixed Income Securities Resales window to query existing Bonds for resell. Enter the Sale Amount for which you resold the security.

XTR803

Setup New Bond Issue

To enter a new purchase deal in Oracle Treasury, the Bond Issue must be setup to record information of the security investment.

XTR804

Enter Bonds Information

Use the Fixed Income Securities window in Oracle Treasury to enter new bonds puschase. Enter Bonds information like Portfolio, Issue Code, Settlement Date, value and etc.

XTR805


The data entry would be validated before processing.

XTR806

Generate the Authority Purchase slip

The Authority Purchase Slip is printed and routed for approval manually.

XTR807

Approve Bond Placement?

The Bond Placement Form would be routed manually to the respective managers for approval.

XTR808

Cancel the Placement in Oracle treasury

If the placement is rejected, update Oracle Treasury to record the rejection

XTR809

Authorize the Settlement in Oracle Treasury

Authorize the settlement of the Bond in Oracle Treasury




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ub-process

Sub-process Name


Output

XTR810

Generate Confirmation Letter

Confirmation letters of Bond purchase can be generated.

XTR811


If necessary, enter Inter Account transfer for cash placement. Refer to XTR005.




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Process Flow Diagrams – Manage Bonds Resell Bond

802 - Enter Resell Bonds Information

XTR009– Manage Stocks

ub-process

Sub-process Name

XTR901 Start

Stock Placement 801 – Investment Reports are obtained Community from Brokerage Bonds Decision

Summary of stock activity New Bond Purchase 803 - Setup obtained New Bond Issue

XTR902

Setup New Stock Issue

XTR903

Enter Sell Stocks Information

806 - Generate the Authority Purchase Slip

XTR904

XTR905

XTR906


Output

from stock brokers are

804 - Enter Bonds Information

To enter a new purchase deal in Oracle Treasury, the Stock Issue must be setup to record information of the security investment.

Use the Equity Market Transactions – Stocks Resales window to enter new stock purchased. Query your deal 809 - Authorize the 807-Approve 811- Enterof Yes number and enter stock sellininformations like number Settlement Placement? Inter Account resale shares, resale price. Oracle Treasury

805 - Validate The Data Entry in Oracle Treasury

D

Transfer

Enter Stocks Information

Use the Equity Market Transactions – Stocks window to enter new stock purchased. Enter stock information like Enter inter account No portfolio, number of shares, price per share, etc. transfer in Oracle Treasury if Enter Cash Dividends Use the Equity Market Transactions – Cash Dividends insufficient funds Information window to enter stock cash dividends. Enter information like dividends declaration date, payment, and dividend 810 - Generate 808 - Cancel the per share. Confirmation Placement In Validate the Data Entry The data entry wouldLetter be validated before processing. Oracle Treasury in Oracle Treasury

Enterprise Roles

XTR907

XTR908

Authorize the Settlement in Oracle Treasury Generate Confirmation Letter



The settlement of the purchase stock or cash dividends Treasury User would be authorized in Oracle Treasury.

Treasury Super User

Confirmation letters of Bond Epurchase can be generated.

END


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Process Flow Diagrams – Manage Stocks Update Sell Stocks

Start

901 – Placement Reports From Brokerage

Update New Stock Purchase

903 - Enter Sell Stocks Information

902 - Setup New Stock Issue

Update Cash Dividends

907 - Authorize the Settlement in Oracle Treasury

906 - Validate the Data Entry in Oracle Treasury

904 - Enter Bonds Information

905 - Enter Cash Dividends Information

908 - Generate Confirmation Letter

E





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Gap Analysis This section details the analysis of the mapping solution for the above requirement identified as a Gap above at the Oracle Fit column. Each gap will have a Gap ID assigned to. Each Option is named with the Process Number and suffix with a character(A,B,C, etc.) to identify each Option. Description describes the solution identified. Costs/Benefits lists the various pros and cons for the selected option. Estimated Work Effort provides details of the effort required to perform any customization if required the selected option. Option Selected will have YES is the selected option is determined. And the selected option with comments and date of the decision made is noted at the Resolution and Date columns.

Gap ID: XTR-G001 Process Name: The system should automatically generate fund transfer letter to the bank. Process ID: XTR503 Requirement Description:

The system should automatically generate fund transfer letter to the bank.

Priority: H

Options

Description

Costs/Benefits

1

Minor custumization Cost – Easy Script/Report requirement to output script Benefit – Auto produce letter, frequently used, security and data integrity

2

Manual Process – Use Desktop tools

Resolution:

Cost – Security issue , can change letter content Benefit – save on customization cost

Frequency/Volumes High

High

Estimated Work Effort 3

Option Selected YES

0-1

Recommend Option 1.




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Date:

May 11 2004

Gap ID: XTR-G002 Process Name: The system should support 3-way comparison of forecast, budget, current and previous year actual information for multiple userdefined periods.

Process ID: F 05.14 (reports requirement identified in RFP) Requirement Description:

The system should support 3-way comparison of forecast, budget, current and previous year actual information for multiple userdefined periods.

Priority: L

Options 1 2

Description

Costs/Benefits

Frequency/Volumes

Estimated Work Effort

Option Selected YES

Use Oracle Discover

Cost – effort to build Weekly/monthly Benefit – full requirement fit

Not determined, range of 5 days.

Retain current manual process

Cost – Minimal Weekly/ monthly Benefit – full requirement fit

0

Resolution: Date:

Recommend Option 1. May 11 2004

Gap ID: XTR-G003 Process Name: Daily Cash Position Report (Cash Management)

Process ID: F503 Requirement Description: The Daily Cash Position Report is required daily to access how much fund is available for TN. The bank account balances is obtained from Oracle Cash Management Deal Entry to Settlement



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Priority: H

Options

Description

Costs/Benefits

Frequency/Volumes

1

Customize Report

Cost – Complex Report Benefit – Meet most requirements. Cash position numbers are available from submitting a report anytime (assuming daily consilidation is completed)

2

Oracle Cash Management Cash Positioning Funtion

Cost – Implementation High effort, some workaround required Benefit – Standard function, no customization.

Resolution: Date:

High

Estimated Work Effort 5

Option Selected YES

N/A

Recommend Option 1. July 26 2004




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Open and Closed Issues for this Deliverable Open Issues

ID

Issue

Resolution

Responsibility

Target Date

Impact Date

Resolution

Responsibility

Target Date

Impact Date

Closed Issues

ID

Issue




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BP080 Future Process Model - XTR Issue

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