Transaction Manager

Purpose

The Transaction Manager is a powerful instrument that executes efficient liquidity, portfolio and risk management. You have the option of carrying out liquidity and risk analysis in the Transaction Manager. Based on these analyses and the current conditions on the financial markets, you can make decisions about future investments and borrowings.

The Transaction and Position Management Process

Flexible Processes for Transaction and Position Management• We can configure the transaction and position management

processes flexibly for each product type. We use rationalization to do this.

• At the same time, we can increase process security by implementing organizational requirements. The dual control principle, for example, is used as an important security measure to control releases.

Position Management• Position Management gives you a clear overview of your

positions according to your individual evaluation criteria. • It forms the basis for parallel position management according

to different accounting principles, and for performance and benchmark evaluations in the Portfolio Analyzer .

TradingYou can map financial transactions and exercise rights in the Trading area. The

following functions are available:• Entering and evaluating offers (Competitive bids)• Fast entry for the most common transactions• Order limit checks• Date checks• Expiration and barrier checks for options• Price calculators (for example, cross rate, option price, and NPV calculators)

Back OfficeThe following options are available in the Back Office area:• Managing account assignment information• Creating payment details• Correspondence functions (for example, automatic confirmations and

counterconfirmations)• Securities account transfers and processing corporate actions for your positions

AccountingYou can use the following functions in the Accounting area:• Managing your positions in parallel (for example, according to HGB:

German Commercial Code and US-GAAP )• Automatic posting functions for transferring data to Financial Accounting• Updating the general ledger in real time• Flexible functions for processing payment transactions• Valuation procedures and accrual/deferral procedures• Complete documentation of business transactions

Hedge Management:• Hedging Risks is an important prerequisite for continuing and securing

your company profit. Hedging currency risks therefore plays a central role.• Preparing and analyzing open currency exposures is an important step in

hedge management, in particular in large companies.

The following graphic illustrates the interrelationships:

Trading In the Trading area you can enter, edit and display financial transactions of

the areas Money Market , Foreign Exchange, Derivatives , Securities and Debt Management . To find these areas, on the SAP Easy Access screen, choose Accounting → Financial Supply Chain Management → Treasury and Risk Management → Transaction Manager

“In the Money Market , Foreign Exchange , and Derivatives areas, you can also give notice on and roll over transactions.”

Back OfficeUseIn the back-office area, you process and settle transactions that

were entered in the trading area.FeaturesAs in trading, the back-office functions also enable you to call up

information on existing transactions or make retrospective changes. Using the Settlement function , you can monitor and check financial transactions.

• This enables you to add missing data, such as payment instructions or posting specifications.

• When you save a settlement activity, the system changes the activity category of the transaction to document that it has been monitored and processed in the backoffice area.

Collective processing: Financial Transaction

• This function makes it easier for you to manage your transactions effectively by displaying a list of all transactions with common selection criteria and providing the necessary processing functions.

• You can branch directly from the processing list to the individual transaction to display detailed information.

• You can use collective processing to speed up selection and processing for all financial transactions. From the collective processing function you can also perform all the necessary tasks (such as knock-in or knock-out, exercise or rollover).

CorrespondenceUseUsing the Correspondence function, you can generate specific letters for the

financial transactions managed in the system.• You can send this correspondence directly from the system by Fax or e-

mail or by SWIFT files or IDocs (in the Money Market and Foreign Exchange area) or print it out.

• This correspondence can be used as a form of internal documentation for financial transactions (dealing slips) as well as for comparing the financial transactions concluded with business partners using external correspondence that can also be counterconfirmed.

NettingUSE• The Netting function allows you to group together transactions from the

Money Market, Foreign Exchange and Derivatives areas and to pay them collectively.

• Situations can arise where several transactions are to be paid collectively; this happens especially in the case of transactions with business partners that are not house banks, that is payments need to be exchanged.

Example:§ Fixed-term deposit investment in EUR and fixed-term deposit borrowing in EUR§ You balance the open payment amounts and only pay or receive the net amounts§ Advantage: Saving of transaction costs or bank chargesTo do this, you can group transactions to form “Netting transactions”.

References

Use• A reference between Treasury transactions records a relationship between

any number of transactions. The reference category defines the meaning of a reference.

• References are supported in the money market, foreign exchange, derivatives, securities and loans areas. In the securities and loans areas there is a General reference category, which you can use to represent relationships between transactions in these areas.

• In other words, you can use this reference category to link any transactions you choose in these areas.

Rate FixingUseYou must fix rates for derivatives and foreign exchange transactions that you

have created in the trading transaction.

Features• You can use the Fix Average Rates report to determine exchange rates for

creating average rates or the Reset Average Rate Fixing to delete these rates.• You can fix rates manually or have the system fix them automatically. In

foreign exchange trading there are an additional two functions available:• When you opt for Automatic Fixing the system first imports the

corresponding rate (as a rule the average rate) from the rates table. Subsequently, a premium/discount to the value of the separately defined fixing margin is calculated. This method allows you to use spreads that differ from the ask/bid spread.

• If you use the Manual Fixing Processing function, you set the exchange rate manually.

• When you fix rates, the transaction is transferred to the Contract activity.• Double-click to go to the individual fixing transactions.

Regulatory ReportingUseThe premium reserves are created from insurance premiums and are disclosed

as liabilities in the balance sheets of insurance companies. The premium reserves cover the assets belonging to the premium reserve fund.

This premium reserve fund must be created in order to fulfill German supervisory requirements. It is used to ensure that claims from insurance policyholders can be met.

The assets of the premium reserve fund are documented in premium reserve fund lists (PRF Lists). In general, a separate premium reserve fund is set up for each branch of insurance operated by an insurance company.

The premium reserve fund is divided into various asset categories. Examples of possible asset categories:

Securities Account ManagementVarious functions are available for managing your securities positions. You can

use these to map the changes that securities positions undergo over time. On the SAP Easy Access screen, choose Accounting → Financial Supply Chain Management → Treasury and Risk Management → Transaction Manager →Securities → Back Office → Securities Account Management.

FeaturesPosition Information• Here you can use the evaluation reports for securities account management.

They provide you with a lot of information about the security positions.Securities Account Transfer• The Securities account transfer function enables you to transfer a position

from one securities account to another.External Securities Account Statements• You can use these functions to import external securities account statements

and compare them with internal information.

Payments• Here you can use the functions for the Automatic and Manual Debit

Position and the function Manual Posting .Updating Planned Records• The function Update Planned Records recalculates the cash flows for the

selected securities positions and updates the database.Restraints on Disposal• You can use this function to block and unblock securities positions.

Corporate Action

Use• Corporate actions are part of position management in the securities area.

You can use this function to display changes made by the issuer to the capital structure for classes in your position. On the SAP Easy Access screen, choose Accounting → Financial Supply Chain Management → Treasury and RiskManagement → Transaction Manager → Securities → Back Office → Corporate Actions (FWK0)

Accounting Use• The Transaction Manager and Loans Management are FI

subledgers in which the information on the various financial transactions and finance positions is held.

• With the parallel position management of the Transaction Manager , it is possible to manage these positions according to other accounting principles parallel in different valuation areas.

Master DataDefinitionMaster data is basic data that rarely changes. You can edit and manage

master data in the Transaction Manager in the following areas:

1. Banks2. House Bank3. SAP Business partners for Financial Services4. Class5. Facilities6. Master Agreement7. Position Management Procedure8. Securities Account9. Redemption Schedules

Information SystemsPurpose• You can use the Information System in the Transaction

Manager to execute the reports defined by SAP or to create your own reports.

• When defining reports, you can used the tools SAP Query and SAP Drilldown Reporting, or load data into the Business Information Warehouse for analysis.

Payment Program for payment Requests (FI-BL)

Purpose• The payment program for payment requests is an additional

automatic payment option in the SAP system. • You can use this payment program to make payments to

customers and vendors, or between G/L accounts. • Unlike the standard payment program, the payments are not

based on open items (FI documents) but onpayment requests.

Features• The functions of the payment program include:

• Payment processingAllows you to control the selection of the payment

requests, posts and clears the corresponding documents in the system, and generates the payment media.

• Payments in third currencies• Update of payment data in Cash Management.

Initialization Guide- Initialization of the Parallel Valuation AreasPurposeYou can use the initialization process to generate new valuation

areas in the Treasury subledger (Treasury Ledger).