Component documentationSAP Treasury and Risk Management (FIN-FSCM-TRM)

 

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

Besides 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 take evasive action.

See also: 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 regarding the economic success of investments. The focus lies on analyzing performance, that is, in precisely measuring the success of investments as well as comparing the success against the targets set. Furthermore, it is now possible to view the details of performance achieved according to their cause, that is, the contribution of each portfolio element to overall performance. 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 in the Customizing activity Activate Business Functions (transaction SFW5).

    See also: SAP Library under Start of the navigation path Business Function (SAP enhancement pacakge 5 for SAP ERP 6.0) Next navigation step Enterprise Extensions: Business Functions Next navigation step Financial Services End of the navigation path

  • 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 Start of the navigation path Business Function (SAP enhancement pacakge 5 for SAP ERP 6.0) Next navigation step Business Function for SAP ERP Next navigation step Accounting Next navigation step Financial Supply Chain Management Next navigation step SAP Treasury and Risk Management End of the navigation path (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 under Start of the navigation path Treasury and Risk Management Next navigation step Basic Functions Next navigation step SAP Business Partner for Financial Services End of the navigation path.

  • To make the settings for market data, go to Customizing and choose Start of the navigation path Treasury and Risk Management Next navigation step Basic Functions Next navigation step Market Data Management End of the navigation path.

Integration

Treasury and Risk Management is an integrated solution in which the various components are closely connected to each other. 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.

More Information

Roles in Treasury and Risk Management