Component documentation SAP Treasury and Risk Management (TRM) 

Purpose

SAP Treasury and Risk Management is based on a series of solutions that primarily analyze and optimize business processes in the financial area of a company.

Transaction Manager

A core task in many finance departments is concluding financial transactions. Depending on the company policy, the emphasis can either be on providing an internal service for the affiliated group companies, or participating actively in the financial markets in order to invest liquid assets, finance planned investment, or hedge existing risks. The Transaction Manager provides the instruments for processing the related financial transactions, from deal capture through to transferring the relevant data to Financial Accounting. The system supports both traditional treasury departments that focus on trading as well as asset management departments. This enables you to use the same platform for various types of transaction - from short-term finance to longer-term strategic investments.

See also: Transaction Manager

Market Risk Analyzer

Alongside traditional finance management tasks, such as cash management and liquidity assurance, effective market risk management is a decisive factor in securing your company’s competitive position. In this field, the Market Risk Analyzer offers extensive position evaluations, such as mark-to-market valuations of financial transactions. It also includes tools for calculating risk and return figures, including exposure, future values, sensitivities and value at risk. When you run these reports, you can incorporate both contracted positions and fictitious financial transactions in the calculations. The valuations can be based on both real and simulated market prices. Together with a high degree of flexibility for creating reports, the Market Risk Analyzer provides a reliable evaluation basis for market risk controlling.

See also: Market Risk Analyzer

Credit Risk Analyzer

The Credit Risk Analyzer focuses on measuring, analyzing and controlling counterparty default risk. The first phase aims to cover the specific risks associated with financial transactions in a company. The Credit Risk Analyzer enables you to control risks actively by setting limits. This is supported by flexible limit management functions with online monitoring, as well as extensive reporting options. As a result, managers are in a position to identify credit risks as they occur and act accordingly.

Credit Risk Analyzer

Portfolio Analyzer

Given that the funds available for investment are usually limited, and that there are numerous investment options to choose from, the crucial question for investment policy decisions is how well the investments have actually performed. The economic success of an investment is therefore a critical factor when it comes to making investment policy decisions. The Portfolio Analyzer is designed to provide the answers to this question. It measures the exact return on investments, compares the results to prescribed targets, and breaks down the overall performance into its component parts by attributing the individual portfolio positions to the total result. The basis for these evaluations is the portfolio structure, which lets you group investments into different categories. You can run evaluations for portfolios at different levels in the portfolio hierarchy, or for an asset category across several portfolios.

See also: Portfolio Analyzer

Implementation Considerations

  To be able to use SAP Treasury and Risk Management, you first need to activate the Enterprise Extension EA-FS Financial Services. You do this in the Customizing activity Activate Business Functions (transaction SFW5).

See also: SAP Library under Business Function (SAP enhancement package 5 for SAP ERP 6.0) Enterprise Extensions: Business Functions Financial Services

  Further, in the area of SAP Treasury and Risk Management, there are some Enterprise Business Functions that you can only use after you have activated the relevant Enterprise Business Function in the Customizing activity Activate Business Functions (transaction SFW5).

See also: SAP Library under Business Function (SAP enhancement package 5 for SAP ERP 6.0) Business Function for SAP ERP Accounting Financial Supply Chain Management SAP Treasury and Risk Management

  To be able to use the functions of the individual components of SAP Treasury and Risk Management, you need to make the required settings in the Implementation Guide (IMG) for Treasury and Risk Management.

  You make the settings for the SAP Business Partner in Customizing for Treasury and Risk Management under SAP Business Partner for Financial Services.

  To make the settings for Market Data in Customizing for Treasury and Risk Management, choose Basic Functions Market Data Management.

Integration

SAP Treasury and Risk Management is an integrated solution in which the various components are closely linked. The financial transactions managed in the Transaction Manager can be evaluated and monitored using the analyzer components. In addition to being linked to the TRM analyzer components Market Risk Analyzer, Portfolio Analyzer, and Credit Risk Analyzer, the Transaction Manager is also linked to SAP Cash Management.

This graphic is explained in the accompanying text

See also:

Roles in Treasury and Risk Management

Create Single Roles

 

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