“In January 2008, SAP received the 2007 Treasury Management International (TMI) award for “the best back-office and accounting system”, and for demonstrating innovation and excellence in treasury management.“(www.sap.com)

SAP Treasury and Risk Management is the corporate treasury solution of SAP and offers a broad range of treasury functionality. SAP has heavily invested in its treasury functionality and now has a competitive product in the TMS space.

For those corporations that have/are implemented (-ing) SAP as their core ERP solution, SAP Treasury and Risk Management offers a potential opportunity to integrate treasury systems into other business applications. Treasury and Risk Management is one of the components of SAP that really exploits the power of ERP. With correct design and configuration, central treasury can have access to firm-wide financial data in real time, such as underlying transaction data for exposure management, cash forecasts and bank balances in addition to powerful transaction management functionality, consolidated reporting and risk management functions.  

SAP Trasury and Risk Management Business Process

Functional Overview
 
SAP Treasury and Risk Management offer a large number of commonly used
instruments in the following areas:

• Money Market:
  o   Fixed Term Deposit
  o   Deposit at Notice
  o   Commercial Paper
  o   Interest Rate Instrument
   
  SAP Treasury - Money Market full supported for:
• Contract:
  Placement, Final Repayment, Premature Settlement, Rollover, and Give Notice.
• Additional Derived Transaction:
  Interest Income Tax, Charges, Penalties, Bonus, Adjustment Interest
  Late, etc.
• Interest Rate:
  Calculate automatically, supported for capitalized or not capitalized
  calculation, able to use fixed or variable interest, Flexible to set for due interest receivable periodically or receive on contract end of term, accommodate all interest calculation method.
• Full Integration to Accounting Module
• Automatic posting & support accounting closing (automatic calculation and posting for Accrual/deferral, valuation & reset, calculate and posting for realized gain/loss forex)
• Support to audit trial.
• Automatic update report and form:
  Correspondence, Cash Flow, Cash Management, Position, Accounting Reporting, etc.  
  
• Foreign Exchange:
  o   Spot Transaction
  o   Forward Transaction
  o   Swaps
  o   Option
  o   Futures
   
  SAP Treasury – Foreign Exchange full supported for:
• Contract
• Additional Derived Transaction:
  Charges, Penalties, Tax, etc.
• Full Integration to Accounting Module
• Automatic posting & support accounting closing (automatic calculation and posting for valuation & reset, calculate and posting for realized gain/loss forex)
• Support to audit trial.
• Automatic update report and form:
  Correspondence, Cash Flow, Cash Management, Position, Accounting Reporting, etc. 
  
• Securities
  o   Stock
  o   Investment Certificates
  o   Subscriptions Right
  o   Zero Bond
  o   Fixed Rate Bond / Obligation (Ex : ORI, SUN)
  o   Variable Rate Bond
  o   Drawable Bond
  o   Warrant Bond
  o   Index Warrant
  o   Equity Warrant
  o   Current Warrant
  o   Bond Warrant
  o   Shareholding
  o   Mutual Fund / Reksadana
  o   Etc
   
  SAP Treasury - Securities full supported for:
• Contract:
  Buy, Sell, Corporate Action (Stock Split, Stock Swap, Transfer New
  Stock, Posting Subscriptions Right, Currency Change Over), Bonus Dividend, Dividend Stock, etc.
• Additional Derived Transaction:
  Interest Income Tax, Charges, Penalties, Bonus, Adjustment Interest
  Late, etc.
• Interest Rate:
  Calculate automatically, supported for capitalized or not capitalized
  calculation, able to use fixed or variable interest, accommodate all interest calculation method.
• Full Integration to Accounting Module
• Automatic posting & support accounting closing (automatic calculation and posting for Accrual/deferral, valuation & reset, calculate and posting for realized gain/loss forex)
• Support to audit trial.
• Automatic update report and form:
  Correspondence, Cash Flow, Cash Management, Position, Accounting Reporting, etc.
  
• Derivatives:
  o   Swap
  o   Interest Rate Swap
  o   Currency Swaps
  o   Discount Swap
  o   Compound Swap / Eonia Swap
  o   Forward Rate Agreement (FRA)
  o   Cap / Floor
  o   OTC Options
  o   Currency Options
  o   Currency Barrier Options
  o   Swaptions
  o   Interest Rate Guarantee (IRG)
  o   Security Options
  o   Compound Options
  o   Average Rate Options
  o   Basket Options
  o   Correlation Options
  o   Listed Derivatives
  o   Listed  Options
  o   Futures
  o   Etc
   
  SAP Treasury - Derivatives full supported for:
• Contract
• Additional Derived Transaction:
  Interest Income Tax, Charges, Penalties, Bonus, Adjustment Interest
  Late, etc.
• Interest Rate:
  Calculate automatically, able to use fixed or variable interest,
  Flexible to set for due interest receivable periodically or receive on contract end of term, accommodate all interest calculation method.
• Full Integration to Accounting Module
• Automatic posting & support accounting closing (automatic calculation and posting for Accrual/deferral, valuation & reset, calculate and posting for realized gain/loss forex)
• Support to audit trial.
• Automatic update report and form:
  Correspondence, Cash Flow, Cash Management, Position, Accounting Reporting, etc.

Featurs and Benefits

• Offer a straight through processing
• One data capture and the data available for front office, back office,
  cash management and accounting instantly
• Accounting in parallel according to several accounting principle for
  example IAS/IFRS/GAAP or HGB
• Help you to identify the financial risks
• Changes in currency rates
• Yield curve changes
• Value at Risk calculation
• Calculates the financial credit exposure
• Using formula to calculate financial credit exposure
• Manage the exposure with a flexible limit management
• Provide you with integrated reporting
• Central reporting point for all your financial transaction and position

Fully Integrated Transaction Manager

Many corporations still maintain a proliferation of systems, spreadsheets and databases to meet the complex information needs of their Treasury. Inefficiencies and the lack of integration in these systems too often lead to incomplete and inconsistent information that hamper process improvements and value-added decision taking activities. For Treasurers to achieve optimum operation benefit from technology investment it is critical to maximise the integration.

Reporting on Financial Position