Unit 2 Treasury and Risk Management: Overviw

Identifying processes in Treasury

Treasury and Risk Management (TRM): Overview

Transaction Manager

Market Risk Management

Credit Risk Management

From a strategic point of view, the analysis and trading process is the starting point for the various Treasury processes.

Once you have decided to complete certain financial transactions, you enter the trading processes for these transactions in Transaction Manager.

with Transaction Manager you can optimize yields and cost structures
with Risk Management secure against market and credit risks

use Market Risk Analyzer to analyze interest rates, currency and stock risks
Credit Risk Analyzer helps you assess credit risks and includes an Online Limit Check

Functions overview

Comprehensive management of financial transactions and positions

Monitoring, checking, and releasing

Data transfer to financial accounting (including accrual/deferrals and valuations)

Trading and back office support

Flexible configuration of company-specific transaction and position management processes.

Assignment of financial transactions to portfolios or management in securities accounts.

Flexible reporting and portfolio analysis

Datafeed interface

central functions

Structuring financial transactions

Central data

Central functions

Transaction and Position Management Process

In Trading, you create transactions and exercise rights #

In Back Office, you settle transactions, that is, you check entered transactions and carry out position management-related processes, such as securities transfers. #

In Accounting, you carry out all bookkeeping for relevant activities in the subledger and transfer posting information to the Financial Accounting general ledger. #

controlling market risk

risk or performance figures

Valuations can be based on either real or simulated market prices

The first release covers the specific risks related to your company's financial transactions.

Further releases will concentrate on integrating the sales/accounts receivable area. This will enable company management to recognize credit risks when they arise and avoid them.

Business Partner

Definition

A business partner is a person or legal entity with whom/which you have a business relationship.

The data you can maintain for a business partner is split into two areas

General role data

Company code-dependent data

is centrally stored for all roles

is data which only applies for the role category in the respective company code

Relationships

map relationships on the Relationships tab page

The relationship categories you can choose from are predefined in the system and depend on the business partner classification.

You can refine the relationship categories by defining different relationship types

Company Code-Dependent Business Partner Data: Standing Instructions

Standing Instructions

are master agreements concluded with a business partner

Master agreements can be made according to

Authorizations

Payment details

Correspondence

Derived flows

In order to make use of a business partner (BP), you must

Create the BP

Release the BP for use

Authorize the BP as a partner for specific financial transactions

You can assign transaction authorizations at the following levels

Contract type

Product type

Product category

Transaction type

include all information required to conclude payments, that is, you own (house bank) account data and, where applicable, business partner bank details.

Correspondence serves to document and match concluded financial transactions.

You can choose - by determining any level from contract type to transaction type - whether correspondence with the business partner for a particular transaction should be in print, by fax, email, IDoc or Swift form.
These details must be specified if correspondence is to be exchanged with a business partner.

You can use derive flows in the money market, foreign exchange, derivatives and securities areas to simplify calculation of taxation amounts.

To generate derived flows, you must assign a derivation procedure to the relevant partner.

confirmation status

This includes information about when the confirmation was sent/received, the relevant activity, the user, the form used, and the output type of incoming or outgoing confirmation.

You can define correspondence as internal correspondence types (such as dealing slips) and external correspondence types (such as confirmations)

Correspondence that has been generated is stored in the financial transaction data.

Derivation procedures enable you to automatically generate and calculate certain financial flows (which result from other financial flows).