AMG_TRM_BBP _V2.0.

Business Blueprint

Global Business Blueprint

Project: TARABUT

Created by: RAVIPRAKASH

Created on: 12/27/2011

____________________ ____________________ ____________________

Signed on Signature: Customer Signature: Consultant

Business Blueprint

Revision History

Document Version #

Date Author Description of Change

1.0 27-Dec-2011 Ravi Prakash Initial document

1.1 21-Jan-2012 Ravi Prakash Changed the document as Per E&Y Recommendations

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Contents

SAP IMPLEMENTATION FOR AMG_TARABUT.................................................................................................3

1 BUSINESS SCENARIOS........................................................................................................................................31.1 Treasury and Risk Management..........................................................................................................3

1.1.1 Organizational Units.........................................................................................................................................31.1.1.1 Organizationsal Structure.......................................................................................................................31.1.1.2 Organizational Structure of CLM...........................................................................................................8

1.1.2 Master Data.......................................................................................................................................................111.1.2.1 Business Partner.....................................................................................................................................111.1.2.2 Transaction Manager..............................................................................................................................131.1.2.3 Master Data of CLM................................................................................................................................16

1.1.3 Business Processes.......................................................................................................................................191.1.3.1 Money Market...........................................................................................................................................191.1.3.2 Foreign Exchange...................................................................................................................................261.1.3.3 Securities..................................................................................................................................................291.1.3.4 Derivatives................................................................................................................................................341.1.3.5 Process of CLM.......................................................................................................................................37

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Acronyms

S.No Abbreviation Description1. AKMS Abdul Kader Al Muhaidib & Sons Co

2. FI Finance Module

3. CO Controlling Module

4. SAP Systems Application & Product In Data Processing

5. TRM Treasury and Risk Management

6. SAR Saudi Riyal

7. CLM Cash and Liquidity Management

8. FSCM Financial Supply Chain Management

9. Dr Debit

10 Cr Credit

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SAP Implementation for AMG_TARABUT1 Business Scenarios

1.1 Treasury and Risk ManagementTreasury and Risk Management (TRM)This document is a result of workshop study and requirement analysis carried out at Al-Muhaidib, Dammam. The purpose of this document is to map the Abdul Kader Al Muhaidib & Sons Co’s Treasury and Investment requirements on to SAP standard functionality of the Treasury and Risk Management based on the requirements narrated in the standard templates. This document is to be studied by core users, Business process owners and executive management team. The preparation of this document is an essential precursor to prototyping and testing.

Scope of Treasury and Risk Management ModuleThe Scope of SAP Treasury and Risk Management is to monitor Treasury flows including Investments and Borrowings. All the functions under Treasury and Risk Management will be depend on Product types, flow types and transaction types.The implementation of Treasury and Risk Management is confined to the following company codes

Company code Company Name1000 Abdul kader Al Muhaidib & Sons Co.1100 Al Muhaidib Holding Co.1200 Al Muhaidib Development Co.

1.1.1 Organizational Units

1.1.1.1 Organizational Structure

Organisational Structure

This Blueprint has been developed based on the discussions with Subject Matter Experts nominated by Abdul Kader Al Muhaidib & Sons Co, Al Muhaidib Holding Co and Al Muhaidib Development Co from Treasury and Investment departments.

Organisational Basic SettingsRequirements / expectations

The following company codes desires that the activities performed by the Treasury and Investment teams should be mapped to SAP Treasury and Risk Management within SAP FSCM Module.

Company code Company Name

1000 Abdul kader Al Muhaidib & Sons Co.1100 Al Muhaidib Holding Co.

1200 Al Muhaidib Development Co.Using SAP TRM the Treasury and Investment departments should be able to view real time Treasury positions, calculations and reports. The information should be accurate in terms of inflows and outflows

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and integrates with Finance and Cash and Liquidity modules.General explanations

Treasury and Risk Management (TRM) component, Transaction Manager fulfils the requirements of Treasury and Investment management by providing a comprehensive view of all business transactions related to it. Transaction ManagerThe Transaction Manager is a powerful instrument that executes efficient liquidity, portfolio and risk management and consists of sub components of Money Market, Foreign Exchange, Securities and Derivatives to facilitate different types of transactions in Treasury and transfer to Financial Accounting.All the functions under treasury will be depend on Product types, flow types and transaction types.Product Type- Helps to differentiate between different financial instruments. Differentiation is necessary when the individual instruments are subject to different processing rules. The product/category for example Medium Term Loan and Short Term Loan.Transaction Type- Determines the transaction posting of a product type. For ex: Borrowing of Term Loans/repayment of Term Loans..Flow type- The flow type/category allows the system to interpret the calculation category and determines the representation in the cash flow. Flow types also control the effective interest rate calculation and Valuation of the financial instrument. For ex: Forex valuation. All the expenses such as Commission, Management charges will be captured by using flow types Business Partner- It is a prerequisite for making transactions. Business partner will be our Banker, Issuer or Broker. The following Treasury and Risk Management functions would be used for the following company codes

Company code Company Name1000 Abdul kader Al Muhaidib & Sons Co.1100 Al Muhaidib Holding Co.1200 Al Muhaidib Development Co.

Money MarketAll Fixed Deposits and Borrowings will be covered under this function. Each type of borrowing/Investment is denoted by Product Type.Foreign ExchangeAll forward agreements/contracts of foreign exchange will be covered under this function.SecuritiesThe Investments in Various Shares (Listed/others), Funds will be covered under this function. Each type of Investment is denoted by a Product Type.DerivativesThe Investments in Various types of derivatives such as Interest rate Swap(IRS),Forward Rate Agreement (FRA) and Options will be covered under this function.

Naming convention

The following company codesCompany code Company Name1000 Abdul kader Al Muhaidib & Sons Co.1100 Al Muhaidib Holding Co.1200 Al Muhaidib Development Co.

intends use the following document type “TR” –(Treasury Posting )for posting of Treasury transactions to Financial accounting.

Treasury Number Range

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Number From Number To Number Int/Ext

14 140000001 150000000 Internal

Flow Chart

The TRM Organizational Structure for the following Company codes is defined belowCompany code Company Name1000 Abdul Kader Al Muhaidib & Sons Co1100 Al Muhaidib Holding Co1200 Al Muhaidib Development Co

Business Process flow Job Description

Transaction Process in TreasuryTransactions in various areas of the transaction manager (Money market, Foreign exchange, securities) generally follow the same procedure. They are first entered in the front-office component and then checked in the back-office component before being transferred to accounting.

Trading / Front officeThe front-office component contains functions for creating and displaying financial transactions. The

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software supports a range of practical auxiliary and control functions that can be used to optimize trading. These include functions for entering and evaluating offers, fast entry functions for common transactions, limit checks, date checks, expiration, and other support evaluations. Decision-making tools such as the cross-rate calculator, the option-price calculator, and the net present value (NPV) calculator are also available.Back officeIn the back-office component, the complete transaction data such as account assignment information and payment details and transfer it to accounting using the settlement function. Correspondence functions, such as automatic confirmations and counter confirmations, can also be used. Other typical back-office tasks include interest-rate adjustments based on variable interest rates, and payment netting arising from financial transactions.AccountingSAP Treasury and Risk Management also has automatic-posting functions to update the general ledger in real time. The system provides the process of valuation, accrual, and deferral procedure of financial instruments and flexible functions for processing payment transactions. The application also provides with reporting functions such as the posting journal and posting overview.

Changes to existing organization

Currently the following Company codesCompany code Company Name1000 Abdul Kader Al Muhaidib & Sons Co1100 Al Muhaidib Holding Co1200 Al Muhaidib Development Co

are using Microsoft office for maintaining Treasury and Investment transactions. Using SAP TRM Treasury and Investment departments would be able to view real time Treasury positions, calculations and reports.Description of improvements

Using the SAP Best adopted Practice the above organizational structure is defined and adopted for the following Company codes.

Company code Company Name1000 Abdul Kader Al Muhaidib & Sons Co1100 Al Muhaidib Holding Co1200 Al Muhaidib Development C

Description of functional deficits and Approaches to covering functional deficits

Sr. No. Gap/ Deficit Description Gap resolution

None

System configuration considerations

1. Financials Extension (business function EA-FIN) within the SAP ECC Extension needs to be activated.

2. Saudi Riyal Currency (SAR) would be used as default currency.3. Company code defined in Finance and controlling area, objects defined in CO, will be used in

TRM module4. Company code additional data has to be extended in Treasury and Risk Management.

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Integration Considerations

Sr. No. Module Description of integration

None

Reporting Considerations

None

Authorization and user roles

Creation (FTR_CREATE) and Settlement (FTR_EDIT) and posting to FI (TBB1) will be given access and should be approved by change control board.

1.1.1.2 Organizational Structure of CLM

Cash and Liquidity Management This document is a result of workshop study and requirement analysis carried out at Al-Muhaidib, Dammam. The purpose of this document is to map the Abdul Kader Al Muhaidib & Sons Co’s Cash Management on to SAP standard functionality of the Cash and Liquidity Management based on the requirements narrated in the standard templates. This document is to be studied by core users, Business process owners and executive management team. The preparation of this document is an essential precursor to prototyping and testing.

Organisational UnitsThis Blueprint has been developed based on the discussions with Subject Matter Experts nominated by

Al Muhaidib Group from Treasury department

Scope of Cash and Liquidity Management ModuleThe Scope of SAP Cash and Liquidity Management is to monitor Cash flows and Liquidity forecast including Treasury, Accounts payable and Accounts receivables. The implementation of Cash and Liquidity Management is confined to the following company codes

Company code Company Name1000 Abdul Kader Al Muhaidib & Sons Co1100 Al Muhaidib Holding Co1200 Al Muhaidib Development Co

Organisation Basic SettingsRequirements / expectations

The following Company codesCompany code Company Name1000 Abdul Kader Al Muhaidib & Sons Co1100 Al Muhaidib Holding Co1200 Al Muhaidib Development Co

desires that the activities performed by the Treasury team should be mapped to SAP Cash and Liquidity Management within SAP FSCM Module. The Treasury department is able to view real time cash positions and forecasting reports. The information should be accurate based on the actual data from other modules (SAP FI, MM, SD and Treasury) effecting the inflows/outflows. In addition any short term planning effecting inflow/outflows (not flowing from other SAP modules) should also get reflected in cash

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positioning & cash forecasting

General explanations

SAP Cash Management is used to monitor cash flows and to ensure that an entity has sufficient liquidity to cover various obligations.The SAP system provides the opportunity to determine bank status and liquidity forecast on different levels of the group. The liquidity decisions are taken centrally on a corporate level. The actual and detailed information from SAP Cash Management provides a good basis to net liquidity gaps and surpluses of subsidiaries and establish a centralized process. As a result of the high degree of automation within SAP Cash Management, only exception processing needs to be done manually. This principle treats with care the alertness of all involved parties who can fully concentrate on the exceptions and special cases that arise during the post processing procedure. In addition, daily automatic processing implicates a better operational control, because unexpected transactions are promptly visible and mistakes can be removed straight away. Naming Convention

None

Flow Chart

None


The following Cash Management functions would be used for the following Company codes


Data Transfer from Operative Systems – Commitments for forecasting purpose from Sales Order and Purchase Order. Open items (receivables and payables) from Customer Billing and Vendor Invoicing etc.

Cash Position & Monitoring - The cash position supplies information on the current financial situation of bank accounts and bank clearing accounts. Integration with single records means that the cash position can give an overview over short-term liquidity trends.

Liquidity Forecast & Monitoring - The liquidity forecast shows changes in liquidity in the sub-ledger accounts and helps to obtain information regarding expected payment flows. The liquidity forecast is based on incoming and outgoing payments from accounts receivable and payable, and also on open items and manually entered planned items.


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Currently the following company codes


are using Microsoft office for monitoring Cash Position & Liquidity forecast. Using CLM, the above mentioned company codes would be able to view its real time cash positions and forecasting reports. The information should be accurate based on the actual data from other modules (SAP FI, MM, SD and Treasury) effecting the inflows/outflows. In addition any short term planning effecting inflow/outflows (not flowing from other SAP modules) should also get reflected in cash positioning & cash forecasting.

Description of improvements

Using the SAP Best Practices the above organizational structure is defined and adopted for the following Company codes.




None


Financials Extension (business function EA-FIN) within the SAP ECC Extension needs to be activated.

Saudi Riyal Currency (SAR) would be used as default currency Company code defined in FI and controlling area, objects defined in CO, and TRM module will be

used in Cash and Liquidity Management.


Sr. No. Module Description

FI Integration to FI will be established through General ledger accounts and Sub ledger accounts.


None


Authorization for Planning Memo records (FF63), Cash Position (FF7A) and Liquidity forecast (FF7B) will be provided to Fund Manager.

1.1.2 Master Data

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1.1.2.1 Business Partner

Master Data for TRM

Requirements / expectations

The following Company codesCompany code Company Name

1000 Abdul Kader Al Muhaidib & Sons Co

1100 Al Muhaidib Holding Co

1200 Al Muhaidib Development Co

are intends to design a business process to handle Treasury and Risk Management activities associated with the Master Data.

Business Partner will be used as Master Data for Treasury and Risk Management


Business Partner:

Business partner is a natural or legal person with whom business relationships are maintained. Business partners are divided into different categories, which have different attributes assigned to them. The functions of the business partner in the contract are determined using business partner roles, for example Counter Party, Issuer and Depository Bank.

Naming Convention

Business Partners are divided into different categories based on their roles as Counter party, Issuer and Depository bank. The following would be the number ranges for Business Partner for the following Company codes





Business Partner Number Range

Number ranges for the Business Partner

Number Range for Business Partner

Number From Number To Number Int/Ext01 1001 9999 Internal

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Flow Chart

None


The event provides the details/process to create the Business Partner in Treasury and Risk Management and also highlight the key fields which are required for Creation of Business Partner.

Business Partner

The data process for a Business Partner is divided in to three areas,

i. General Data

This data is held centrally for all business partner roles. Access to the data can vary according to the role category, depending on the system settings in the Implementation Guide (IMG) for the Business Partner.

ii. Company Code-Dependent Data

This is data that only applies for a particular role in the relevant company code.

iii. Differentiated Data

In the standard version this is data from Additional Information, Ratings, and Customer Segments that can be defined differently by means of a differentiation criterion.

The following are Business Partner Roles defined for the above mentioned Company codes.

Business Partner Roles

Business Partner RolesCounter PartyIssuer

Depository Bank


In the current system there is no concept of Business Partner. Using SAP TRM and the concept of Business partner, Treasury department can identify and monitor the financial transactions in detail.


Using the object of Business partner, the identification and monitoring the financial instrument will be made easy.



None


Creation of number ranges for Business partner and Creation of Business Partner using Transaction

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code BP



1 Bloomberg Integration

Interface with external software called "Bloomberg" for stock market price updation.


N None

Authorizations and User Roles

Treasury Managers will provide access for executing the Transaction Manager for different product types.

1.1.2.2 Transaction Manager






intends to design a business process to handle Treasury and Risk Management activities associated with the Master Data.


Transaction Manager

The Transaction Manager follows the straight-through processing principle for entering different transaction types through to transfers to Financial Accounting. To achieve this goal, the front-end area has been regularly enhanced and functions and basic structures have been standardized for financial transactions through its Subcomponents of Money Market, Foreign Exchange, Securities and Derivatives.

Naming Convention

SAP standards have been followed for naming convention of Customized products for Money Market and Securities.

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Money Market

Product Type – ZML for Mid-term loans

Product Type – ZSL for Short-term loans

Product Type - ZPL for Promissory notes Payable

Product Type – ZIL for Inter company Loans

Securities

Product Type – 01A- Stocks for Shares(Listed)

Product Type – ZPE for Public Equity

Product Type – ZNP Non-Public Equity(Private Equity – cost method)

Product Type – ZNE Non-Public Equity(Private Equity – Equity method)

Product Type – ZPF Fund

Product Type – ZTP Trading Portfolio

Product Type – ZDP Discretionary Portfolio

Product Type - ZAM Application Money/ Advance towards Investment

Flow Chart

None


Transaction Manager

As per the business process of the following Company codes





and after discussions with the subject matter experts from Treasury and Investment departments, the following standard product types have been finalized in SAP TRM.

a. Money Market

I. Standard Products

Product Type – 51A for Fixed Deposits

Product Type – 56A for Facility

b. Foreign Exchange


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Product Type – 60A for Foreign Exchange Forward contracts

c. Securities


Product Type – 01A- Stocks for Shares(Listed / non listed equity)

d. Derivatives


Product Type – 62A Interest Rate Swap.

The business process of Transaction Manager will be discussed separately under different subcomponents as Money Market, Foreign Exchange, Securities and Derivatives individually


Currently the following Company codesCompany code Company Name




are using Microsoft office to monitor Treasury transactions using SAP TRM, entity can monitor Investments and borrowings.


Using the object of Transaction Manager, the identification and monitoring the financial instrument will be made easy from its sub components like Money market, Foreign Exchange, Securities and Derivatives for different types of financial instruments.



None


Transaction Manager discussed separately under different subcomponents as Money Market, Foreign Exchange, Securities and Derivatives individually.



FIIntegration to FI will be established through Account determination in TRM by assigning respective General Ledger accounts.

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N None

Authorizations and User Roles

Treasury Managers will provide access for executing the Transaction Manager for different product types.

1.1.2.3 Master Data of CLM


The following company codes





wants to view its cash positions at various levels to enable them to interpret their cash positions and forecasting easily thus enabling them to take timely and accurate decisions.Cash and Liquidity Management flows depend on Planning levels and planning groups.


Planning levels include outgoing checks, outgoing bank transfers, check receipts, FI postings, purchase orders, Sales orders, and confirmed or unconfirmed payment advices. For structuring purposes, planning levels are divided by where they came from, and assigned to either the cash position or liquidity forecast.

A planning level is defined in the Company Code specific part of the General Ledger Master Data. The planning level reflects the nature of the financial transaction:- FI posting to a bank account FI posting to a clearing account Confirmed or unconfirmed notesThe following types of levels are possible in SAP:- Noted items in cash position & liquidity forecasting Purchase Orders Sales Orders Financial payment transactions settlements (incoming payments and outgoing payments) Postings with payment blockings Financial bank transactions (Bank statement postings) Planning levels for Treasury transactions

Planning Groups select and structure the required dataset and are responsible for compiling the liquidity forecast. A planning group represents particular characteristics, behaviours or risks of the customer or vendor group. Planning groups helps in breaking down incoming and outgoing payments according to

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the amount, the probability of the cash inflow or outflow, and the type of business relationship.Naming Convention

None

Flow Chart

None


The event provides the details on the various master data used for Cash & Liquidity Management.The event will also highlight the key fields within each these master data which affect the cash positioning and liquidity forecast and also list the possible values for each of these important fields in the master data.

Planning LevelsThe planning levels makes the display of the cash position and of the cash forecast more transparent explaining the origin of the data

For all the Bank Accounts (Main, Issued and Collection A/c) would be assigned to a planning level. All the ledgers for which planning level would be assigned should also be checked as “relevant to cash flow”. This check also forms part of the company code specific data of GL Maser

Following Planning levels would be used by the following Company codesCompany code Company Name




Planning LevelsPlanning Levels DescriptionB0 Bank – Main

B1 Bank – outgoing

B2 Bank – Incoming

C1 Cash Account

T1 Treasury Borrowings

T2 Treasury Investments

T3 Treasury Forex

Planning Groups Planning groups for Cash Management are assigned to customer and vendor master records for the liquidity forecast. The field is part of the Accounting information tab of the Company Code specific data of the customer/vendor.

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The planning group reflects certain characteristics, behaviours and risks of the customer or vendor group

Cash management groups are supplied data from the relevant postings within MM (Purchase Orders), SD (Sales Orders) and actual FI Postings.

Planning groups for the above mentioned Company codes would be as under:

Planning groups for VendorsCash Management groups for Vendors

Description

V1 Domestic Vendors

V2 Foreign Vendors

V3 Petty Cash Vendors

V4 Employee Vendors

V5 Inter Company Vendors

V6 RE- Vendors

V7 One time Vendors

Planning groups for CustomersCash Management groups for Customers

Description

F1 Whole sale customers

F2 Key Account customers

F3 Super Market customers

F4 Mini Market customers

F5 Restaurant Customers

F6 Catering customers

F7 Export customers

F8 RE- Customers


Currently the following Company codes Company code Company Name




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are using Microsoft office for forecasting Cash Position & Liquidity forecast. The above mentioned company codes would be able to view its real time cash positions and forecasting reports. The information should be accurate based on the actual data from other modules (SAP FI, MM, SD and Treasury) effecting the inflows/outflows. In addition any short term planning effecting inflow/outflows (not flowing from other SAP modules) should also get reflected in cash positioning & cash forecasting.


Using the SAP Best Practices the above Master data is defined and adopted for the Company codes







None


1. Creation of Planning Levels

2. Creation of Planning group



None FI Integration to FI will be established through General ledger accounts and Sub ledger accounts.


N None

Authorization and user Roles


1.1.3 Business Processes

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1.1.3.1 Money Market

Money Market


The following are the financial instruments, the Company codesCompany code Company Name




intends to capture under Money Market in SAP Treasury and Risk Management.a. Fixed Depositsb. Term Loans (Medium term, Short term and Notes Payable )c. Facility


Money Market is a subcomponent of Transaction Manager which consists of different Product Types to capture different types of Financial instruments.All Fixed Deposits and Borrowings will be covered under this function. Each type of Borrowing/Investment is denoted by Product Type and the transactions of product type depend on transaction types and flow types.

Product Type- Helps to differentiate between different financial instruments. Differentiation is necessary when the individual instruments are subject to different processing rules. The product/category for example Fixed Deposits and Term Loans

Transaction Type- Determines the transaction posting of a product type. For ex: Borrowing of Term Loans/repayment of Term Loan

Flow type- The flow type/category allows the system to interpret the calculation category and determines the representation in the cash flow. Flow types also control the effective interest rate calculation and Valuation of the financial instrument. For ex: Forex valuation. All the expenses such as Commission, Management charges will be captured by using flow types

Naming Convention

SAP Standard procedure has been adopted for the customizing product types ZML, ZSL, ZPL and ZILThe following would be the number range for Money Market transactions for the following Company Codes





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Number Ranges for Money Market transactions

Product Type Number Range From Number To Number Int/Ext51A 01 100001 200000 InternalZML 02 200001 300000 InternalZSL 03 300001 400000 InternalZPL 04 400001 500000 InternalZIL 05 500001 600000 Internal56A 06 600001 700000 Internal

Flow Chart

a. Fixed Deposit

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b. Term Loans

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c. Facility

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The event provides the details/process to capture the Financial Transactions in Treasury and Risk Management and also highlight the key fields which are required for entering Financial transactions.The following are the financial instruments applicable for the below mentioned Company codes





Under Money Market in SAP Treasury and Risk Management.

a. Fixed DepositThe Fixed deposit will be captured in Treasury and Risk Management by using Product Type, Transaction Type and Business PartnerProduct Type – 51ATransaction Type – determines the transaction whether it is investment or maturity including prematureWithdrawals.Transaction Type - 100 (Investment)Business Partner – Where the Fixed deposit has to be made (ex: Banker)Financial Entries for Fixed Deposit Fixed Deposit A/c Dr XXXX

To Bank Account Cr XXXX(When Fixed Deposit is Made)

Bank Account Dr XXXX To Fixed Deposit A/c XXXX To Interest Received A/c XXXX ( At the time of Maturity of Fixed Deposit) b. Term Loans

Term loans are classified into 3 categories for the following Company codesCompany code Company Name



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as Medium term loans, short term and Notes Payable and will be captured by using product type. Transaction Type and Business Partner.

Product Type – ZML for Medium term loans Product Type – ZSL for Short term loans

Product Type – ZPL for Notes Payable Transaction Type – 200 Borrowings

Business Partner- where the Borrowings has to be made.(for ex- Banker)Financial Entries for Term Loans Bank Account Dr XXXX

To Term Loan a/c Cr XXXX(When Term Loan is Taken from Bank)

Interest on Term Loan A/c Dr XXX To Bank Account Cr XXX (When interest on Term Loan paid) Term Loan A/c Dr XXXX To Bank Account XXXX ( At the time of Closure of Term Loan)

c. FacilityThe Facility will be captured in Treasury and Risk Management by using Product Type, Transaction Type and Business Partner Product Type – 56 A Transaction Type – 100 Facility assigned 200 Facility obtained Business Partner - where the Facility has to be made.(for ex- Banker)

There will not be any financial entries for facility. Facility can be viewed/monitored against each borrowings made against each facility in TRM.

a. Business Process flow for Money Market – Fixed Deposit

Step No. Step Name Process step description Delivered By

10 Fixed deposit Creations

Fixed deposits would be created in SAP by the Treasury department

TM01 (or )FTR_CREATE

20 Fixed Deposit transactionSettlement

Fixed deposit would be settled in SAP Treasury before posting to finance.The purpose of settlement is to check the accuracy of the transaction and to authorize it in SAP Treasury

FTR_EDIT

30 Fixed Deposit transaction postingto Finance

Fixed deposit will be posted to Finance from SAP Treasury

TBB1

40 Fixed DepositReversal Reversal Fixed deposit will be carried out in SAP TRM

FTR_EDIT

50 Fixed Deposit Accrual Entry

The system will take care of Accrual interest calculations by running transaction. The system will post the values of accrual/deferral on the date on which the transaction is executed and reverse on the next day automatically

TBB4 (Accrual/deferral)

60 Fixed Deposit Fixed Deposit maturity or premature will be carried out in FTR_EDIT

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Maturity / prematureClosures

Treasury

70 Fixed DepositRollover

Maturity date/period of existing Fixed deposit term can be extended by using Rollover in SAP.

FTR_EDIT

b. Business Process flow for Money Market – Term Loans


10 ZML/ZSL/ZPL creation

ZML/ZSL/ZPL would be created in SAP by the Treasury department.

TM01 (or )FTR_CREATE

20 ZML/ZSL/ZPL transactionSettlement

ZML/ZSL/ZPL would be settled in SAP Treasury before posting to finance.The purpose of settlement is to check the accuracy of the transaction and to authorize it in SAP Treasury

FTR_EDIT

30 ZML/ZSL/ZPLtransaction posting to FI

ZML/ZSL/ZPL will be posted to Finance from SAPPS Note: Transactions cannot be modified once they have been posted to Finance.

TBB1

40 ZML/ZSL/ZPL Reversal ZML/ZSL/ZPL can be reversed after posting to Finance

in SAP Treasury first and then reverse in Finance

FTR_EDIT

50 ZML/ZSL/ZPL Closure

ZML/ZSL/ZPL can be closed by editing the original transaction which has its unique identity (Separate number) generated by SAPOnce the ZML/ZSL/ZPL has been prematurely closed the same needs to be settled again and then eventually posted to FI.

FTR_EDIT

60 ZTL/ZSL/ZPL Accrual Interest

The system will take care of Accrual interest calculations by running transaction in SAP Treasury.

TBB4

70 ZTL/ZSL/ZPL Extension

Extension of existing ZTL/ZSL/ZPL can be extended by using Rollover in SAP

FTR_EDIT

c. Business Process flow for Money Market – Facility

Step. No.

Step Name Process step description Delivered By

10 Facility Creation Facility would be created in SAP by the Treasury department.

FTR_CREATE

20 Facility Utilisation

Facility can be viewed/monitored against each borrowings made against each facility

FTR_EDIT


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are using Microsoft office to maintain the record of transactions. Treasury department should be able to view real time Treasury positions, calculations and reports through SAP TRM.


System provides automated calculation of interest and repayment of borrowings at the time of making transaction for the entire tenure of the borrowings. This helps to monitor the interest payments and repayment of the borrowings on a periodic basis.



1Product types

There are no standard product types for Medium Term Loans (MTL), Short term loans (STL) and Promissory note loans(PFL) in SAP.

Create new product types for ZML, ZSL ZPL and ZIL for the MTL,STL,PFL and ICL loans respectively


1. Configuration of customized product types ZML, ZSL and ZPL for borrowings.2. Number range for the transactions product wise(refer above mentioned step: Naming convention)



FI Integration to FI will be established through Account determination in TRM


Position of Financial instruments for Product Types on Periodic basis.

TPM 13– Fixed and Schedule flows for product type

TPM 12 – Fixed flows (Posted flows to Finance) for Product type


Roles for Front office to make transaction of financial instrument (FTR_CREATE) Back office to validate and settle the transaction(FTR_EDIT) and Accounting for posting the transaction to Finance.(TBB1).

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1.1.3.2 Foreign Exchange


The following are the financial instruments AKMS (company code: 1000) wants to capture under Foreign Exchange in SAP Treasury and Risk Management. The Scope of Foreign Exchange transactions are applicable for AKMS only.Product Type – 60A for Forward contractTransaction Type – 102 Forward Transaction


The foreign exchange area covers all the business processes arising from both traditional foreign exchanges trading as well as trading with over-the-counter (OTC) currency options. The functions offered support the entire trading process – starting from concluding the transaction in the front office, through to processing in the back office, and on to transferring data to financial accounting.

For Premature/Rollover functionality, the system generates two single transactions that are linked by a reference unit. One transaction offsets the forward exchange transaction originally entered and the other transaction, a new one, allows the term to be adjusted using the amount data as default values. The two new transactions are linked to the original transaction.

The relationship of a swap to the original forward transaction is automatically documented by the assignment of the individual transactions to a common finance project with an identical project number. This project number is in the administrative data which enables to display this referencing between related transactions in the transaction data.Naming Convention

The following would be the number range for Foreign exchange transactions for AKMS.Number Range for Foreign Exchange transactions

Product Type

Number Range From Number To Number Int/Ext

60A 07 700001 800000 Internal

Flow chart

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The event provides the details/process to capture the Financial Transactions of Foreign exchange in Treasury and Risk Management and also highlight the key fields which are required for entering Financial transactions.The following are the financial instruments AKMS(company code:1000) wants to capture under Foreign Exchange in SAP Treasury and Risk Management.Product Type – 60A for Forward contract Transaction Type – 102 Forward TransactionFinancial Entries for Forward Contract When forward contract is Premature/closure Bank Account Dr XXXX

To Foreign Exchange clearing A/c XXXX (When buying Foreign exchange ) Foreign Exchange Clearing A/c XXXX To Bank Account Cr XXXX (When Selling Foreign exchange)

Business Process flow for Foreign Exchange


10 Forward Transaction Creation

Foreign Exchange transactions would be created in SAP by the Treasury department

TX01 (or )FTR_CREATE

20 Forward Transaction Settlement

Forward transactions would be settled in SAP Treasury before posting to finance.The purpose of settlement is to check the accuracy of the transaction and to authorize it in SAP Treasury

FTR_EDIT

30 Forward transaction posting to FI

Forward transactions will be posted to Finance from SAP Treasury

TBB1

40 Premature Forward transaction Premature settlement or rollover will FTR_EDIT

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settlement / Rollover\

be carried out in SAP Treasury.


There is no existing system defined in the organisation. At present AKMS is using Microsoft office to maintain the record of transactions. Treasury department should be able to view real time Treasury positions, calculations and reports.


The functions offered support the entire trading process – starting from concluding the transaction in the front office, through to processing in accounts and help to take accurate decisions. The system provides the Valuation of the positions of foreign exchange on periodic basis and generates accounting entries which reduces duplication of work.



None


1. Maintenance of currency pair for forward contract.2. Number range for Transactions.( refer above mentioned step: Naming Convention)



. FI Integration to FI will be established through Account determination in TRM





TPM1 – Valuation of Financial instrument.



1.1.3.3 Securities

SecuritiesRequirements / expectations

The following are the financial instruments which the following Company codesCompany code Company Name

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wants to capture under Securitas in SAP Treasury and Risk Management.









The following are the Portfolios used under Securities in SAP Treasury and Risk Management.

STOCK -Stocks & Shares(Listed / non listed equity)

PUBEQ - Public Equity

NPUBEC - Non-Public Equity(PRIVATE EQUITY- Cost)

NPUBEQ - Non-Public Equity(PRIVATE EQUITY- Equity)

FUND - Fund

TRDPRT - Trading Portfolio

DESPRT - Discretionary Portfolio

The above mentioned Company codes wants to update its market data ((exchange rates, securities prices, reference interest rates, indexes etc.) through either Using a Market data file interface or Data feed and wants to analyze its position of securities by utilizing the SAP tool of Portfolio analyzer.


SAP Treasury and Risk Management manage securities efficiently by helping by defining structure characteristics, conditions, and parameters for valuation and position management in security master data. This provides the basis for automating trading, back-office, and accounting processes.

The current market data (exchange rates, securities prices, reference interest rates, indexes etc.)can be maintained in a number of ways:ManuallyUsing a Market data file interface: To maintain the relevant data in an external application (such as Microsoft Excel), either manually or via a data provider, and then import the data into the system in an SAP-compatible format.By transferring the market data to the system from a spreadsheetData feed: The data feed connection can be used to make real-time market data available in the system.Portfolio AnalyzerPortfolio Analyzer is a component to calculate and monitor the yields on financial assets. It is designed to be

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used to measure the profits from investments from different perspectives. The calculations are based on the structure of the portfolio maintained in the portfolio hierarchy based on the characteristics. For ex: Portfolio hierarchy can be based on sector, country or based on Product type.Portfolio Analyzer contains various methods for calculating the time-weighted rate of return (TWRR) and the money-weighted rate of return (MWRR).Time-weighted rate of return(TWRR)The time-weighted rate of return describes the returns that result from the actions of the portfolio manager. The rate of return is calculated net of the effect of the deposits into or withdrawals from the portfolio. Money–weighted rate of return(MWRR) It is defined as rate of return, which used to calculate the interest rate of the portfolio, including all incoming and outgoing cash flows. This gives the exact market value of the portfolio at the end of the analysis period.

Naming Convention

The following would be the number range for Security ID and Security transactions for the following Company codes





Number Range for Security ID

Number From Number To Number Int/Ext01 100001 200000 Internal

Number Range for Securities transactions

Product Type Number Range From Number To Number Int/Ext

01A 08 800001 900000 InternalZPE 09 900001 1000000 InternalZNP 10 1000001 1100000 InternalZNE 11 1100001 1200000 InternalZPF 12 1200001 1300000 InternalZDP 13 1300001 1400000 InternalZAM 14 1400001 1500000 InternalZTP 15 1500001 1600000 Internal

Flow Chart

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The event provides the details/process to capture the Financial Transactions of Securities in Treasury and Risk Management and also highlight the key fields which are required for entering Financial transactions.The following are the financial instruments used to capture under Securities in SAP Treasury and Risk Management.









The following are the prerequisites for recording financial transactions under securities

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a. Business Partner – Counter Party, Issuer and Depository Bank

b. Security ID – The ID number is used to uniquely identify a security or the category of Investment.

c. Security Account –It is a unit used for position management and valuation of financial instrument.

Financial Entries for Securities Investment (Stocks/Fund) Account Dr XXXX

To Cash Account Cr XXXX(When acquisition of New investment is made )

Cash Account Dr XXXX Unrealized gain Dr XXXX To Investment (Stocks/ Fund) Cr XXXX To Profit / Loss on Investment ( OR ) I/S Cr XXXX (When Sale of Investment takes place) Dividend Receivable Dr XXXX Deferred Credit Cr XXXX ( When Declaration of Cash Dividends) Cash Account Dr XXXX Dividend Receivable Cr XXXX (When Collection of Cash dividends)

Business Process flow for financial transactions – Securities


10 Creation of Security ID

Security ID would be created in SAP TRM by the Investment department

FWZZ

20 Creation of Security Account

Security Account would be created in SAP by the Investment department .

TRS_SEC_ACC

30 Creation of Security Transaction

Security transactions would be created in SAP by the Investment department

TS01

40 Settlement of Security Transaction

Security transaction would be settled in SAP TRM before posting to finance.The purpose of settlement is to check the accuracy of the transaction and to authorize it in SAP TRM.

FTR_EDIT

50 Security Transaction posting to FI

Security transaction will be posted to Finance from SAP TRM

PS Note: Transactions cannot be modified once they have been posted to Finance.

TBB1


There is no existing system defined in the organisation. At present the following Company codesCompany code Company Name

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are using Microsoft office to maintain the record of transactions. Treasury department should be able to view real time Treasury positions, calculations and reports.


System provides the facility of updating market data of securities to update the book value of the security market price and to take decision on investment Portfolio accurately.



1Product Types

There are no standard product types to suit the requirements of the following Company codesCompany code Company Name




To meet the requirements of the above mentioned company codes the following Customized product types ZPE, ZNP, ZPF, ZTP, ZDP and ZAM are to be created.

Create new Product types ZPE, ZNP, ZNE ZPF, ZTP, ZDP and ZAM.


1. Configuration of customized product types ZPE, ZNP, ZNE,ZPF, ZTP, ZDP and ZAM2. Number range for the transactions product wise.( refer above mentioned step: Naming convention)3. Number range for Security ID.( refer above mentioned step: Explanation of events and functions)4. Account determination for Positions and post flows to Finance.






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Roles for Front office to make transaction of financial instrument(FTR_CREATE) Back office to validate and settle the transaction(FTR_EDIT) and Accounting for posting the transaction to Finance.(TBB1).

1.1.3.4 Derivatives


The following are the financial instruments AKMS wants to capture under Derivatives in SAP Treasury and Risk Management. The Scope of Foreign Exchange transactions are applicable for AKMS only. Product Type – 62A for Interest Rate Swap (IRS)Transaction Type – 300 Payer 301 Recipient


Derivatives play an important role in interest and currency management.Derivatives are dependent on variable financial market values (such as reference interest rates), SAP Treasury and Risk ManagementGives access to a real-time data feed, which provides up-to-the-minute market price information.

The counterparty paying the fixed rate of interest is called the "payer" (while receiving the floating rate), and the counterparty receiving the fixed rate is called the "receiver" (while paying the floating rate).

Naming Convention

The following would be the number range for Derivative transactions for AKMS.

Number Range for Derivative transactions

Product Type Number From Number To Number Int/Ext62A 16 1600001 1700000 Internal

Flow Chart

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The event provides the details/process to capture the Financial Transactions of Derivatives in Treasury and Risk Management and also highlight the key fields which are required for entering Financial transactions.The following are the financial instruments AKMS(company code:1000) wants to capture under Foreign Exchange in SAP Treasury and Risk Management.Product Type –62A for Interest Rate Swap (IRS) Transaction Type – 300 Payer - 301 ReceiverFinancial Entries for Derivatives(Interest Rate Swap) Fixed Interest Dr XXXX

To Bank Account Cr XXXX(When Fixed interest is paid )

Bank Account Dr XXXX To Interest Receivable Cr XXXX (When floating interest is received)

Business Process flow for Derivatives


10 IRS Transaction Creation

Interest Rate Instrument (IRS) transactions would be created in SAP by the Treasury department

TO01 (or )FTR_CREATE

20 IRS Transaction Settlement

IRS transaction would be settled in SAP Treasury before posting to finance.The purpose of settlement is to check the accuracy of the transaction and to authorize it in SAP Treasury

FTR_EDIT

30 IRS transaction posting to FI Interest Rate Swap will be posted to Finance from SAP

TBB1

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Treasury

PS Note: Transactions cannot be modified once they have been posted to Finance.

40 IRS Premature Settlement /closure

IRS Premature settlement/ closure will be carried out in SAP Treasury

FTR_EDIT


There is no existing system defined in the organisation. At present AKMS is not using/exercising the financial instrument Interest Rate Swap. Treasury department should be able to view real time Treasury positions, calculations and reports.


Product Type Interest Rate swap provides the interest calculations of payer and receiver (i.e Outgoing and incoming) and helps to take timely decision on payment of interest.



None


1.Creation of number ranges for Derivative transactions.( refer above mentioned step: Naming Convention)2. Reference rate of interest which helps timely update of variable interest rates and calculation of interest accordingly.









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1.1.3.5 Process of CLM

Business Processes for CLM






wants to view its cash positions at various levels to enable them to interpret their cash positions and forecasting easily thus enabling them to take timely and accurate decisions.


The main purpose of SAP Cash Management is to monitor cash flows and to ensure that an entity has sufficient liquidity to cover various obligations.

SAP Cash Management uses the cash position to reflect movements in bank accounts, while movements in the sub-ledger accounts (AR & AP) are represented using the liquidity forecast.

SAP Cash Management is integrated with a range of other SAP components. For example, the liquidity forecast – in a medium to long term liquidity trend – integrates expected incoming and outgoing payments in financial accounting, purchase and sales.

Naming Convention

None

Flow Chart

The process of Cash flow and Liquidity forecast of CLM is defined below :

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Incoming and outgoing payments that are not transferred to the SAP Cash Management System via actual posting can be entered manually in the planning through Memo record.There are two types of Memo Records:

Payment Advices relevant for Cash Position - These are advices of confirmed nature and would appear in the Cash Position reports. The Planning levels for Payment Advice updation would be separately configured.

Planned Items – These are the items which are forecasted and appear in the liquidity forecast report. The planning levels for such planned memo records would be separately configured. Standard Planning Type “MP – Noted Items” would be used for capturing any Memo Item. Planning group used would be ZZ – Unconfirmed Inflow/Outflow

Following important fields are entered while entering of Memo Records. The details would be covered during user training:-

Value Date

Account Name

Currency Amount

Assignment

Business Process flow for Cash and Liquidity Management.


10 Creation of Memo record

Memo record would be created for Cash position or Liquidity forecast

FF 63

20 Change Memo record

Memo records (entered for confirmed inflow/outflow) can be edited.

FF6A

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(Confirmed for inflow/outflow) Using List

The same transaction can also be used as a report for viewing the list of memo records

30 Change Memo Records (Planned Data) Using List

The Memo records (entered for planned data) can be editedThe same transaction can also be used as a report for viewing the list of memo records

FF6B

40 Report The two important reports are:-

Cash Position (FF7A) – The memo records in nature of confirmed inflow/outflow will impact the Cash Position Reports. The listing of such records can also be viewed in FF6A report as written above in the step no. 20

Liquidity Forecasting (FF7B) - The memo records in nature of planned item will impact the Liquidity Forecast report. The listing of such records can also be viewed in FF6B report as written above in the step no. 30


There is no existing system defined in the organisation. At present the above mentioned Company codes would be using Microsoft office to generate reports for Cash Management. Using CLM Treasury department will be able to view the Cash position for all the banks and also able to generate Liquidity forecast at any given point of time.


CLM provides the option of generating the Liquidity forecast on daily, weekly and monthly at any given point of time taking into consideration of receivables and payables.



None


1. Maintenance of Planning levels for Cash position.2. Maintenance of Planning groups for Liquidity forecast.



FI Integration to FI will be established through General ledger accounts and

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Sub ledger accounts.


Cash position (FF7A) and Liquidity forecast (FF7B).

Custom report for Loan movement and LC movement will be developed as per the requirements.



1.1.3.6 WRICEF

During the workshops the following Gap’s are identified and which are accomplished using RICEFW’s

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AMG_TRM_BBP _V2.0.

Documents

Transcript of AMG_TRM_BBP _V2.0.