Treasury PPT

Oracle TreasuryAn Overview What, Where, When and How Angus Ross

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pwc

Overview Describe and demonstrate the functionality provided by Oracle Treasury

• What is Treasury and Treasury Management • Who would would use Orac Oracle le Treas Treasury ury?? • Where Where does does Oracle Oracle Treasur Treasury y fit into into my ERP? • What instrumen instruments ts does does Oracle Oracle Treasury Treasury Support? Support? • What What is involve involved d in a deal? deal? • What What are the benefi benefits ts of Oracle Oracle Treasu Treasury? ry?

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PricewaterhouseCoopers

Overview Describe and demonstrate the functionality provided by Oracle Treasury

• What is Treasury and Treasury Management • Who would would use Orac Oracle le Treas Treasury ury?? • Where Where does does Oracle Oracle Treasur Treasury y fit into into my ERP? • What instrumen instruments ts does does Oracle Oracle Treasury Treasury Support? Support? • What What is involve involved d in a deal? deal? • What What are the benefi benefits ts of Oracle Oracle Treasu Treasury? ry?

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Treasury Definition • Treasury is NOT accounting • Treasurers Treasurers manage manage the the company’s company’s cash, cash, deals deals and risks risks – their aim is to conduct financial deals to support a company’s operation and add to the company’s bottom line

• Make Make sho short rt and long long term term cas cash h fore foreca cast stss • Deal Managem Management: ent: enter enter and and administe administerr fund and and investment deals • Risk Manageme Management: nt: interest interest rates, rates, foreign foreign exchang exchangee and commodity risks • Policy Policy setting: setting: determine determine risk risk policy, policy, limits limits and exposure exposure 3


Management Cash Management

Deal Management

Risk Management

• Cash forecasts

• Borrow

• Policies, limits

• Electronic payments • Invest

• Interest rate

• Bank relationships

• New instruments • Foreign exchange

• In-house bank reconciliation

• Deal capture

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• Insurance


Issues Affecting Treasurers • Centralisation of ‘Head Office’ operations Facilitated by Internet efficiency

• Increased Globalisation of business • Greater complexity of financial instruments • Greater regulation of companies eg FAS 133 • Need to reduce funding costs and external financial risk • More efficient deal capture and reporting • Need to make smarter decisions faster

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What does Gartner Say? The future of Finance applications is moving in the direction of "analytics, treasury and process extension such as corporate services and verticalization" Gartner, Accounting 1Q99 Large-Enterprise Magic Quadrant, Feb1999 6


Oracle Treasury Overview • New Release 11i solution – Corporate treasury across industries

• Typical treasury functions – Monitor cash flows and exposures – Make funding and investment decisions – Execute transactions in financial markets – Manage lifecycle of deals – Consolidate cash requirements of subsidiaries 7


Where does Oracle Treasury fit into my ERP? Bank Statements

Current Rates/ Prices

Oracle Treasury

Currencies & GL Accounts

Vouchers Exposure & Cash Deals

Oracle Payables

Oracle Cash Invoices Management

Journals

Oracle General Ledger

Receipts 8

Oracle


Oracle Integration Front Office

Back Office Systems

Middle Office Web SelfService

Inventory

Purchasing

Instruments

HR & Payroll

Accounts Payable

Accounts Fixed Assets Receivables

Bonds (buy & issue) Disc Instruments Money Markets Syndicated Loans Note Issuance Options FX

- Financial Accounting - Management Accounting - Budgetary Control by Fund, HQ, Resident Mission,Currency

Oracle Financial Analyser - Manage Planning Phase - Manage Budgeting Phase - Review/Approve Budget - Monitor Budget Standard Reports

Oracle Cash Mgt - Cashflow Analysis - Cash Forecasting - Cash Budgeting

Oracle Treasury (FO)

Oracle Treasury (MO) Trading Risk Management - Position Keeping - Limits Management - MO Analysis/Reporting

- Deal Capture - Market Feeds Capture - Dealer Support Positions Limits

Feeds

General Ledger

Analysis & Access

Oracle Treasury (BO) - Settlements - Accounting - Confirmations - Reconciliation

Portfolio Analysis Standard Reports

Messages

Reuters Bloomberg

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Confirmations, Bank Interfaces, Swift, etc. PricewaterhouseCoopers

O R A C L E

`R E P O R T S

Oracle Integration Front Office

Back Office Systems

Middle Office Web SelfService

Inventory

HR & Payroll

Accounts Payable

Control

Accounts Fixed Purchasing Systems Assets Receivables

Instruments Bonds (buy & issue) Disc Instruments Money Markets Syndicated Loans Note Issuance Options FX

Oracle Treasury (MO) Trading Risk Management Loan - Position Keeping Accounting - Limits Management - MO Analysis/Reporting

- Deal Capture Loan - Market Feeds Capture Accounting - Dealer Support Positions Limits

Messages

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- Financial Accounting - Management Accounting - Budgetary Control by Fund, HQ, Resident Mission,Currency

Standard Reports

- Cashflow Analysis - Cash Forecasting - Cash Budgeting

Treasury (FO)

Reuters Bloomberg

General Ledger

Oracle Cash Mgt

System Oracle

Feeds

Analysis & Access

Confirmations, Bank Interfaces, Swift, etc.

Oracle Treasury (BO) - Settlements - Accounting - Confirmations - Reconciliation

Structural Risk Management - Asset/Liability Management - Rate Risk Management - VaR analysis - Scenario Analysis - Stress Testing - Market Value Analysis - Earnings at Risk Analysis

Portfolio Analysis Standard Reports

Oracle Risk Manager


O R A C L E

O R A C L E

`R E P O R T S

`D I S C O V E R E R

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Who would use Oracle Treasury? Ideally suited for companies with: • Exposure to overseas markets • Multiple banking relationships • Portfolios with complex financial instruments – Need to look at things from an internal control and asset value rather than on a transaction basis

Why not Cash Management? • Cash Management provides centralised cash positions and reconciliation • Treasury provides tracking of hedges and investment positions 12


Key Features of Oracle Treasury • Position Management • Deal Capture • In-house banking • Risk Management- policies and controls • Deal Administration •100% web enabled

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What instruments does Oracle Treasury Support? Supports 2 major deal markets: Foreign Exchange

Money Market

•Deals

•Intercompany funding

•Options

•Term money

•Historic Rate Rollovers

•Negotiable Instruments

•Pre-deliveries

•Derivatives

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What Deal Transaction Types does Oracle Treasury Support? Short term money

Interest Rate swaps

Discounted Securities

Swaptions

Fixed Income

Bond Options

Wholesale term money

FX spot, forward, swap

Retail term money

FX option

FRA

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Limits/ Security Limits monitor and notify when a policy has been exceeded. There are 8 different limits types: •Global

•Currency

•Counterparty

•Sovereign

•Counterparty Group

•Dealer

•Settlement

•Time

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What you can do with Deals in Treasury • Quick Deals • Deal Orders • Linking Deals • Calculators • Exposure Transactions

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The Deal Process 1. Enter Deal

6. Cash Flows

2. Send Confirmation Letter

7. Accounting

3. Validation

8. Validation

4. Settlement

9. Revaluations

5. Positions

10. Accruals

• Limit checking occurs throughout the process

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What happens when a deal is entered? Select Deal Type

Exceeds Tolerance

Yes

Issues Warning

User enters new rate

No Insert deal details

User Saves Deal

Checks Dates and holidays

Checks deal details against monitored limits

Checks deal rates against deal rate tolerances 19

Exceeds Limits

User dismisses warning

Yes

Issues Warning

User cancels deal

No User confirms save

User accepts warning


Reports There are 43 standard reports in Oracle Treasury. These include: •Cash Flow by account or Currency

•Maturities by counterparty

•Consolidated Cash Flow

•Maturities by date

•FX Deal vs Spot

•Retail Term money overdue

•FX Exposure

•Intercompany Statements

•Interest Rate Exposure

•Cancelled Transactions

•Limit Utilisation

•Intercompany Interest Settlement Report

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Future Directions • Revaluation: Our current mark-to-market deal revaluation will be expanded to all the deal types included in our system. In addition, the revaluation process will calculate individual currency gains and losses associated with your deals. (FAS 52 accounting entries are handled by the General Ledger at an account summary level.) • Risk Management: as described earlier. 21


Future Directions • Equities: A new deal type will be added which accommodates equity securities. • Accruals: The effective interest method, or constant yield method, of accruals will be added to the straight line method as another available option. • Deal Open Interfaces: The ability to upload FX and Intercompany deal information directly from legacy systems or third party providers. • FAS 133: Comprehensive support of FAS 133 and IAS 39 Derivative and Hedge Accounting. 22


Reduce Costs & Risk with In-House Banking • Consolidate cash and FX requirements • Provide intercompany funding • Manage subsidiaries’ bank account balances

Reduce Exposures and Bank Fees

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Automate Back Office Data Entry • Split/net settlements • Authorize settlements

• Calculate interest accruals

• Settle in any currency

• Amortize premiums

• Define journal entry templates

• Revalue portfolios

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Manage Global Positions and Exposures • Record daily bank account balances • Project cash flows from internal systems • Monitor cash position in any currency • Record funds transfers • Identify available liquidity • Identify and monitor currency and interest rate exposures • Compare exposures to internal policies Proactively manage funds and eliminate undesirable cash positions PricewaterhouseCoopers 25

Control and Secure Global Treasury Operations • Define exposure limits • Define interest rate and FX policies • Control access for authorized users • Audit business events

Safeguard Treasury Operations

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Benefits of Oracle Treasury •Companies can improve corporate: •Stability •Continuity •Profitability •Enterprise-wide liquidity, currency & interest rate exposure management •Streamlined deal capture •Automated deal admin, settlement, reconciliation & accounting •Controlled and secure treasury operations •Reduced exposures and transaction costs 27


Benefits of Oracle Treasury (continued) •Integrated and streamlined corporate dealing •Improved internal controls •Meet international business needs •Satisfies international treasury regulations •Provides information on funding special projects •Provides access to performance and other bonds •Improved credit rating •Improved Investor Relations 28


Benefits of Oracle Treasury (in summary) •Easy and automatic posting to General Ledger reducing GL/ Treasury reconciliation •Enables fund management to eliminate undesirable cash positions •Optimises the Global use of cash •Can make smarter funding decisions faster •Limits and policy enforcement safeguard your treasury operations •fully functional front to back office corporate treasury department •Better capture of information ! better reporting •100% web enabled to leverage for global treasury operations

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Conclusion • Global exposure management Oracle Treasury delivers enterprise-wide foreign exchange, interest rate, and liquidity exposure management.

• Comprehensive treasury solution Oracle Treasury is a comprehensive solution, integrating front, middle, and back office functions.

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Treasury PPT

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