The enterprise area Treasury focuses on efficient liquidity, portfolio and risk management within a company.

Parts of Treasury:

The Cash Management component allows you to ensure that you have sufficient liquidity for payments that are due and to monitor payment flows. The cash position and liquidity forecast functions display the movements on the various accounts.

Functional areas of Cash Management:

• Electronic banking
• Check deposit
• Cash management
• Cash forecast
• Cash concentration

Payment inflows and outflows can be entered in entered in Cash Management in the following ways:

• Manual/electronic bank statement
• POR procedure
• Lockbox procedure
• Manual/electronic check deposit
• Bill of exchange presentation
• Using payment advice notes

The core records and concentration channels are based on the concentration strategy you define in advance (cash concentration / cash pooling). The result of the cash concentration is output in the form of payment orders or confirmation letters. The payment advices required for the value-dated bank account balance are generated automatically and considered for the cash position.

The treasurer uses the analyses of the current liquidity and risk situation to make decisions about future investments and borrowings, taking the conditions on the financial markets into account. The resulting financial transactions are then entered in Treasury Management.

Targets of Treasury Management:

• To provide support for managing financial transactions and positions from the trading stage through to the transfer to Financial Accounting.
• To provide flexible reporting and evaluation structures for analyzing financial transactions, positions and portfolios.

You can control short-term liquidity and risk positions by concluding money market and foreign exchange transactions (for example, to iron out liquidity deficits/surpluses or hedge currency risks). The securities area supports instruments for the medium to long term.

Borrowing and lending in the form of loans is a key element of a company's liquidity and portfolio management.

Targets of Loans Management:

• To provide functions for entering and managing loan transactions at all stages, from making an offer to a prospective customer and drawing up the conditions of the actual contract (including complex collateral management), right through to posting in Financial Accounting.
• To automate and streamline typical loan processes as far as possible by using standardized procedures and accessing and processing the relevant loan information on a timely basis.

Since Loans Management is integrated with the Cash Management and Market Risk Management components, you can see the effect of your loans on your liquidity and interest rate risk immediately.

The objective of the Cash Budget Management component is to monitor and secure liquidity in the medium to long term. It delivers the actual and target figures for reviewing plans, analyzing deviations and as a basis for future planning.

In Cash Budget Management you can plan the expected incoming and outgoing payments for exact periods and split them up into specific groups. Planned incoming and outgoing payments are not netted (gross principle). Typical periods are weeks or months. The planned items indicate the source of incoming payments and the purpose of outgoing payments (for example, payments for raw material purchases, rent or salaries).

The system takes the relevant data from the documents posted in Financial Accounting and other operational systems (amounts and structure of the payment commitments (grouped according to planned items) / actual payments). At the same time you see the funds available for payment at the beginning and end of a period.

Market Risk Management (TR-MRM) is a subcomponent of Treasury that is used for planning, controlling and monitoring the market risks a company is exposed to.

Market risks result from the danger of negative market developments (changes to parameters on the money and capital markets), which in turn affect the financial assets of a company. You can differentiate between risks from changes to stock prices, interest rates and exchange rates.

Market Risk Management can be used to carry out the following basic functions:

• Create and maintain all the market data required to value financial instruments (both real data and fictitious data within scenarios)
• Select financial instruments according to various criteria, taking underlying transactions into account
• Value the following transactions on the basis of real and fictitious data:
• Forward exchange transactions
• Currency options
• Bonds
• Loans
• Money market transactions
• Forward rate agreements
• Interest rate guarantees
• Interest rate swaps / cross-currency interest rate swaps
• Swaptions
• Futures
• Bond options
• Options on futures
• Calculate the following key figures:
• Market values and differences to market values
• Future values for any time horizon
• Effective price and effective interest rate
• Currency exposure / interest rate exposure
• Sensitivity to changes in interest rates, exchange rates or volatilities
• Value at Risk
• Cash flow for options and instruments with variable interest rates

• Interactive analysis for the above values