A Detailed Guide to Treasury Functionality and Enhancements from ...

A Detailed Guide to Treasury Functionality and Enhancements from SAP Christian Mnich, SAP AG Mark Stapleton, SAP America

Disclaimer The information in this document is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This document is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information on this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP intentionally or grossly negligent. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.

© 2012 SAP AG. All rights reserved.

1

SAP’s SOLUTIONS FOR FINANCE

How SAP Helps You Achieve and Maintain Financial Excellence

Manage Enterprise Risk and Compliance

REGULATORY COMPLIANCE & EFFECTIVE RISK MANAGEMENT

Accounting and Financial Close Treasury and Financial Risk Management

OUTPERFORM STAKEHOLDERS’ FINANCIAL EXPECTATIONS

Manage Financial Performance

Strong cash flow and liquidity Shared Service for Financials

SUPERIOR SERVICE AT REDUCED COST


SAP’s comprehensive portfolio of applications and end-to-end processes help you achieve Financial Excellence

Receivables Management

Invoice to Pay

Compliant and accurate financial reporting Maximized profitability Reduced cost of finance

Travel Management

2

Agenda 1.

Introduction Treasury Applications from SAP I. II. III. IV.

2.

Innovations 2012 I. II.

3.

Payments and Bank Communications Cash and Liquidity Management Debt and Investment Management Financial Risk Management

Optimized handling of Bank Statements Commodity Management

Wrap-Up

Effective Treasury Management More Important Than Ever

Business Problems


4

Treasury Trends Growing Pressures in Treasury That Are Here to Stay

Volatility in markets, commodity prices, and stocks

Increasing globalization and uncertain economics

Increased focus on risk

Importance of effective Cash and Liquidity Management

New Regulation and Compliance Requirements


Rationalization and Standardization

5

The Common Issues These Are the Challenges We Hear from Our Customers

Equities Subsidiary

Payments and Bank Communications (Treasury Operations) Commodities

Customers/ Vendors

Cash and Liquidity Management Derivatives

Debt and Investment Strategy Financial Risk Management

Brokers

Banks Fixed Rate Regulator


6

The Common Issues These Are the Challenges We Hear from Our Customers (cont.)

1. Decentralized organization with lack of information 2. Multiple systems and Interfaces 3. Compliance challenges and violations


Payments and Bank Communications (Treasury Operations) Cash and Liquidity Management

Debt and Investment Strategy Financial Risk Management

4. High operational costs and weak IT infrastructure 5. Poor cash and liquidity management 6. Reactive approach to risk

7

Solving the Issues Treasury and Financial Risk Management

Subsidiary

Banks

Payments and Bank Communications (Treasury Operations) Commodities

Cash and Liquidity Management Customers/ Vendors

Debt and Investment Strategy Brokers

Financial Risk Management Debt/ Investment Management Regulator


8

Solving the Issues Treasury and Financial Risk Management (cont.)

4. Low operational costs and strategic IT infrastructure

1. Centralized organization with integrated systems 2. Integrated system using central interfaces

Payments and Bank Communications (Treasury Operations) Cash and Liquidity Management

Debt and Investment Strategy

3. Auditable and compliant operations


Financial Risk Management

5. Accurate and timely cash positions and reliable liquidity forecasts 6. Proactive approach to risk

9

Current Situation in Many Cases From Spreadsheet Problems to End-to-End Integration

Without SAP

With Treasury Solutions from SAP Multiple Systems

Multiple Banks

Multiple Interfaces

Integrated Treasury Solution Portfolio © 2012 SAP AG. All rights reserved.

10

Treasury Challenges

In an uncertain world it is critical to have the right systems and controls in place for measuring, managing, and reporting operational risk Treasurer

1. Effective cash management for clearer visibility and centralization 2. Consider the changing world in Banking 3. Transforming treasury into a strategic business partner


11

Treasury and Financial Risk Management E2E Process Overview Treasury Operations Manager CFO/ Head of Finance

Cash Manager

Payments and Bank Communications

Process Payments


Cash and Liquidity Management

Financial Risk Manager

Debt and Investments Strategies


Manage Intercompany Transactions

Forecast Liquidity

Propose Deal

Identify Identify Risks and Consolidate

Manage Payment Factory

Reconcile Plans with Actual

Manage Investments/Portfolio

Manage Positions

Approval of High Volume Payments

Operational Cash Flow Planning

Processing of Deals

Deal Deal Request Request & & Management Management

Transmit and Monitor Payments

Process Electronic Bank Statements

Treasury Finance

Deals Request: Borrow or Invest

Get Cash Overview

Manage Treasury Transactions

Hedge Hedge Management Management & & Accounting Accounting

Identify Exposure

Provide Risk Indicators and Report Exposures

12

Treasury and Financial Risk Management (cont.) Roles and Objectives

Cash Manager

Treasury Operations Manager

Solutions

Challenges

Payments and Bank Communications


Treasury Finance

Cash & Liquidity Management

Debt and Investments Strategies


How do I ensure highly secure and quick payments and minimize external fees?

How do I improve cash and liquidity forecasting and gain more accurate and timely insight into global cash balances?

How do I ensure investment or borrowing at best rates and lowest costs?

How do I pinpoint my financial risks and take more effective steps to mitigate them?



SAP Bank Communication Management








SAP Treasury and Risk Management



SAP In-House Cash







SAP Integration Package for SWIFT


SAP Treasury and Risk Management, financial risk management for commodities


SAP Treasury and Risk Management

13

Agenda 1.


2.


3.



Wrap-Up

Most Promising Developments Based on PwC Research in 2011 and Beyond*

“

“Technology and processes in the form of in-house banks, payment factories and SWIFT connectivity are seen as promising new areas, which should allow increased control, visibility and forecasting of cash.” *Source: PwC, Corporate Treasury Solutions, Global Treasury Survey 2010


15

Optimize Payments and Bank Communication Process Overview Get cash overview

Process incoming bank statements

Processing of internal and external payments

Transmit and monitor external payments

Check daily cash overview

SAP Cash Management SAP Integration Package for SWIFT

SAP In-House Cash (for payment factory)



SAP Cash Management

Payment Infrastructure

Bank Connectivity and Payment Master Data

End-to-end best practices to streamline payments and bank communications; coordinated processes across SAP and non-SAP systems © 2012 SAP AG. All rights reserved.

16

Situation Without SAP Bank Communication Management SAP ERP

Third-Party System

Execute Payment Program

Upload File

File Server

Import Bank Statement

Send Payment Order to Bank

Bank

Security: Authorization Encryption Digital Signature

Create Payment Order

Collect Bank Statement

Security Post/Processing and Clearing


Download File 17

Process Flow with SAP Bank Communication Management SAP ERP

Execute Payment Program Create Payment Order


SAP NetWeaver Process Integration

Create Batch

Routing

Payment Approval Work List

Mapping

Security (Approval Workflow, Authorization, Digital signature)

Import Bank Statement

Post/Processing and Clearing


Receive Status Messages

SWIFTNet Security Encryption Digital Signature

SAP Integration Package for SWIFT SWIFT Alliance Access/Gateway

Bank Statement

Resource Adapter 18

SAP ISO 20022 CGI Mapping Group Driver: • Bank Norge AS, Bank of America, Citibank, Danish Bankers Association, Danske Bank, Deutsche Bank, HSBC, JPMorgan Chase, Nordea, RBS, SAP, SWIFT, TDI Consulting, UK Payments Administration, Wells Fargo Purpose • Develop mappings of CGI guidelines to SAP internal Data Fields Deliverables • Individual maps – DMEE/PMW XML Format, PI XML Schema, Excel Spreadsheet, or other • Supporting user documentation with explanations, amplifications, and guidance • Potential Incorporation into SAP product of selected transactions – to include new SAP data fields and Global Data Types Supported Message Types • Credit Transfer • Direct Debit • Payment Status Report • Bank Statements


19

Contributing Members In Total, 44 Members BBVA Bank of America Merrill Lynch Barclays Bottomline Technologies CBI Consortium Citibank Danish Bankers Association Danske Bank Deutsche Bank DNB NOR GXS HSBC ING Bank J.P. Morgan Nordea Bank The Royal Bank of Scotland SAP SEB Standard Chartered Bank Sydbank A/S UK Payments Administration UTSIT XMLdation

Global Common Implementation (CGI) initiative © 2012 SAP AG. All rights reserved.

20

Payment Solution Provided by SAP New Since SAP ERP 6.0, Enhancement Package 2 SAP Bank Communication Management

H2H or BSN*

SAP ERP GL

Payment Medium Workbench

Payroll Treasury In-house cash

Payment Run

Includes SEPA Package and ISO20022 support

Aggregate Payments

Approval Workflow

Digital Signatures

Transmit Payment

Mobile Use Case

Receive Status Report


* Banking Service Network/available 2012 © 2012 SAP AG. All rights reserved.

21

Features: Compliance Increased compliance • Multi-eye release procedures for payment approvals • Personal digital signatures for outgoing payments for internal audit • Release of individual payments or entire batches • Sanctioned Party List and Embargo Check with SAP BusinessObjects Global Trade Services • Integration to the component SAP BusinessObjects Global Trade Services, in order to check incoming and outgoing payments against sanctioned party list screening and embargo lists


22

Features: Integration to SWIFT and Banks Integration to SWIFT and banks Real-time integration with SWIFT via SAP Integration Package for SWIFT Optional integration with banks with the adapters in SAP NetWeaver® Process Integration on a project basis Increased payment-flow transparency Payment status monitor with full status history Processing of new ISO20022 payment status report and other status messages (ACK/NACK) Drill down to documents and master data Display of generated payment formats


23

DESCRIPTION

VALUE

Mobile Payment App for Bank Communication Management


Value Added for Customer Executive staff able to sign off on high-value payments is often travelling. Due to financial crisis and high-compliance requirements, there is a high demand for a strict control of all financial activities and processes. This mobile app will make it possible to push a lot of urgent tasks to the Treasurer, thus protecting from financial loss and process inefficiencies.

Context/Use Case Approval Workflow for Payments — Inform mobile user to confirm/reject outgoing payment, while providing some basic information about the payment (Amount, Currency, etc.)

24

Back-End vs. Mobile View •

Treasury Back office will use the Back-End Application of SAP Bank Communication Management

•

Executive staff will use Mobile App if travelling to release urgent payments


25

Payment Factory with SAP Bank Communication Management and SAP In-House Cash Corporate Client

SAP ERP

Subsidiary

SAP Cash Management

AP/AR/HR Subsidiary

Treasury


SWIFTNet

SAP In-House Cash SWIFT Service Bureaus* Subsidiary

SAP NetWeaver PI SAP Integration Package for SWIFT

SWIFTNet Interface

* www.swift.com/solutions/connectivity/ © 2012 SAP AG. All rights reserved.

26

Integrated Payment Factory Approach with different connectivity options SAP ECC 6.0

Subsidiary

Cash Management

AP/AR/HR Subsidiary


Treasury

SAP In-House Cash Non-SAP

SAP NetWeaver PI Middleware


27

Bank to Corporate Services Network Solution Overview Bank SAP Core Banking / Payment Engine

Bank Non-SAP Core Banking /Payments

Other 2 Bank

BSN Bank Agent SAP PI Bank DMZ

SAP Bank to Corporate Services Network On-boarding

User Interface

Value Apps

Admin

Banking Services

Monitoring

Corporate DMZ

iDOCs or ISO20022

BCM SAP CDP

ERP Modules e.g. IHC, TMS iDocs

PI / Middle ware

NonSAP Apps

BSN Generic Adaptor

Non-SAP Applications

SAP ERP

Corporate


 SAP NetWeaver PI for bank connectivity  Integration and orchestration with one or more core banking systems  Validation rules, security policies, message semantics

In the Cloud

ISO20022

BSN Corporate Agent

At the Bank

Corporate

 On-boarding of corporates  Agent management – configuration, upgrades  Shared visibility to corporate and bank  Transform and Mapping for non-standard message formats  Isolation between multiple tenants  Reliable and secure messaging  SWIFT optional routing capability to non-BSN Bank Members  Platform for value-added applications

At the Corporate  Lightweight, downloadable agent, installable with phone support in most cases  Single instance configurable for multi-banks’ services  In future will support all SAP ERP versions, and non-SAP ERPs 28

Why Do I Need In-House Cash?

Multinational corporate structures with a high volume of internal and external payment transactions can improve by using In-House Cash for the following issues:     

Payment transaction control on a regional and global level Cost-effective processing of internal and external payments Reduction of external bank accounts Reduction of cross-border payments Automation and standardization of financial processes


29

Geographic Structure of an Integrated In-House Bank Various and ever-changing multi-national corporate group structures …

Internal Bank

Head office (Europe) Internal Bank

USA Subsidiary

Region 2 Asia

Subsidiary

Subsidiary Subsidiary Subsidiary Subsidiary

Region 1

… with a high volume of internal and external payment transactions © 2012 SAP AG. All rights reserved.

30

Advantages of SAP In-House Cash

•

No additional software has to be installed in the subsidiaries

•

Reduction of transaction volume due to internal processing

•

Reduction of bank accounts and fees

•

Interest compensation

•

Bundling of currency quantities

•

Maintenance of accounts in any currency

•

Standardized, rationalized, and integrated business processes and controls by using standard payment programs

In-House Cash helps to increase the efficiency of your payment transactions significantly with lower costs © 2012 SAP AG. All rights reserved.

31

Key Instruments of SAP Cash and Liquidity Management Cash and Liquidity Management Decisions Are Based on: Cash Position

Bank accounts In-House cash banks

Bank clearing accounts Payments in transit

Memo records Intra-day bank statements

Liquidity Forecast

Treasury Deals

Customer/Vendoropen items

Purchase requisitions

Real estate

Blocked items

Purchase orders

…

Down payment requests

Sales orders

Earmarked funds

Disputes

…

Financials NonSAP


…

...

Industry Solutions

Financials NonSAP

Logistics NonSAP

32

Insight to Help Liquidity Analysis Cash Flow Analysis Enabled by SAP BusinessObjects Get overview on actual and planned cash position in the past several days or weeks and the next few days/weeks to come Display cash position in transaction currency and simulate display currency according to a variable exchange rate Check current cash position by bank group and list bank accounts of this bank group Get an overview on cash position by company code. Details per company code on bank groups and currencies.


33

Agenda 1.


2.


3.



Wrap-Up

SAP Treasury and Risk Management Risk Analyzers

Reporting

Credit Risk Analyzer

Market Risk Analyzer

Portfolio Analyzer

Utilization: Formulas, Credit risk, Settlement risk

Price calculator: NPV, Prices, Sensitivities

Limit management: Limits freely definable, multidimensional limits

Value at risk: Variance/covariance, Historic, Monte Carlo Simulation

Yield calculations: Money weighted, Time weighted, Modified Dietz method

Simulate rates: What-if scenario, Relative, Absolute

Benchmarking: Performance Indicators

Exposure Management

Hedge Management

Centralized Database to gather group and version data and transfer to Hedge Management

Administration of hedge plans, exposures, hedge items, and hedging relationships

Transaction Manager

Ad hoc reporting: Point & click, Unified databases, Position, P&L, Period, Cash Flow

Reporting tools: SAP Query, ABAP List, Other third-party providers, BI, SAP BusinessObjects Dashboards and Xcelsius Results database: Portfolio Hierarchy, Drill-down, Historic results

Front office: Position and deal reporting, Deal capture, Exercise, Dealer slip, Valuation tools, Online limit check

Back office: Standing instructions, Correspondence Monitor, Netting, Settlement, Rate fixing (interest, FX), References, Corporate actions, Process monitors Accounting: Flexible accounting determination, Accounting according to many international accounting standards Money Market

Foreign Exchange

Derivatives

Debt Mgmt

Fixed-term deposits Commercial Paper Repo

Spot Forward Swaps Options Futures

Cap Floor FRA Swaps Options Futures

Bonds Bank loans Commercial Paper Facilities


Securities Bonds Warrants Stocks Certificates Repo Sec. lending

Commodities Futures Forwards Traded Options

Management reports: Positions, Performance, Ratios, Compliance

Middle office: Risk exposure, Controlling, Compliance Data export: Excel, Flat files, BI 35

Optimize Debt and Investment Strategies Process Overview SAP Treasury and Risk management, combined with other SAP Treasury applications, provides visibility into anticipated cash balances so that treasury managers can optimize investment returns. It also helps monitor and control investments and portfolio risks. Process Steps

1

Cash Management Data

Collect Cash Data of today Create and update forecasts

2

Investment or Borrowing Decision

Take investment or borrowing decision according to the companies Treasury guidelines Take care of limits, e.g., on counterparties Determine best options based on cost of capital or best risk-adjusted investment returns


3

4 Deal Execution and accounting

Execute financial transaction Generate Correspondence Execute Payments Execute postings, valuations, and accruals

Performance Analysis Produce performance analysis compared to defined benchmark Control Cash reporting Monitor capital structure for best options Monitor investment portfolio for performance Monitor counterparties for risk exposure

36

Preconfigured Treasury Software and Services Enabling Rapid Deployment SAP brings software and services together in a new offering that gives you essential treasury functionality quickly and affordably

SAP Treasury and Risk Management rapid-deployment solution

Analyzer Tools

Transaction Mgr.

Best Practices


SAP Consulting

Correspondence & Reporting

ERP Integration

SAP Treasury and Risk Management rapiddeployment solution

Preconfigured software to eliminate the guesswork Rapidly delivered in as little as two months using SAP Consulting An affordably priced solution Establishes a footprint in treasury that can be expanded

37

SAP Treasury and Risk Management Rapid Deployment Solution Core Process Overview Market Risk Analyzer

Credit Risk Analyzer Limit Management Market Data

Reporting

Net Present Value Calculation

By Company Code By Business Partner/ Company Code

Deal Processing

File upload:

Positions

Exchange Rates Yield Curves

Master Data

Deal/ Product Types

Business Partner Internal Business Partner External Business Partner Counterparty Address/Communication Authorizations Derived Flows, e.g., Tax (Payment**)

Correspondence

eob: “KLNACHT”

Transaction Manager

Postings Net Present Value (key date)

Alert Monitor Simulation of key figures

Run & Post Accrual

Limit check

Post realized P&L (Derived flows)

Money Market Investment, Borrowing

Flows

Create Deal

Settle Deal

Foreign Exchange

Post Deal

Valuate Deal

SWIFT/IDOC

Spot, Forward

Correspondence

Interest Rate Swap Payer, Receiver Basis

Profiles & Assignments

(SWIFT/IDoc)

Financial Accounting* (Bank**) BALANCE SHEET

Classic or NewGL Chart of Accounts Company code(s) VALUATION P&L IFRS and/or US-GAAP, German GAAP

* Prerequisite for RDS ** Typically customer-specific settings configured in Financial Accounting © 2012 SAP AG. All rights reserved.

(Release Cash**) (Payment**)

Use customerspecific Cash Mgmt. settings Use customerspecific payment methods, e.g., SAP F111, SWIFT, BCM, InHouse Cash

 Interface to customer-specific settings, not covered via RDS configuration 38

Agenda 1.


2.


3.



Wrap-Up

Commodity Risk Management •

•

•


Addresses the new mega-trend of raw material and commodity management Manages risk exposure from commodity sales and purchases and related financial risk management Ensures legal compliance under IFRS, i.e., IAS 39

40

Commodity Price Volatility Is Increasing Commodity Price Volatility is constantly increasing for Commodities like oil, copper, lead, zinc, wheat, etc. Volatility is significantly higher than for currencies or interest rates This has a high impact on the profit of many companies • Calculating the material cost for end products becomes difficult • Liquidity and cash planning becomes challenging • Hedging with financial derivatives can be a strategy to manage the challenges

Source: Commerzbank/Wirtschaftswoche – Commodity radar screen for October 2010 © 2012 SAP AG. All rights reserved.

41

Commodity Risk Management

Commodity Risk Management provides robust functionality that enables companies to identify and quantify their exposure towards commodity price risk and foreign-exchange risk and take steps to mitigate them


Key Needs

Key Innovations

Efficiently manage and reduce risk arising from commodity price volatility, i.e., of agricultural products

Solution enhancements planned in key areas, such as exposure management and exposure reporting

Streamline treasury processes and reduce the resources required to execute in order to concentrate on valueincreasing activities

Integration of logistics processes to Treasury & Risk Management to allow for near real-time updates of exposure positions

Ensure compliance to newest accounting regulations

Batch/Quality change-driven update of exposure positions (industry-specific)

PLANNED INNOVATIONS © 2012 SAP AG. All rights reserved.

42

SAP’s System Landscape and Solution Architecture Helps Companies Properly Manage Their Commodity Risk Status

Benefit by using SAP

SAP’s Commodity Management solution is an integrated platform with open interfaces

Correct data – risk managers can do their job



Direct transfer of physical sales and purchases data to treasury solution

Real-time data for proper position management



Complete audit support

Authorization concept, change history, etc.

Physical pricing rules & calculation engine fully integrated inside system

Correct pricing results

 

With SAP you know your REAL risk exposure timely and you can properly manage it! © 2012 SAP AG. All rights reserved.

43

Commodity Management Connects Processes Across the Organization to Enable Timely and Profitable Purchasing, Selling, and Hedging of Commodities Typical end-to-end process flow for companies focused on risk management

VP Sales/ Purchasing

CFO Finance

Commodity Sales & Purchasing

Define Risk Policy



Exposure Management

Hedge Management

Define Risk Profile Compliance/ Risk Reporting



Paper Trades



Provisional Invoice



Differential Invoice

 © 2012 SAP AG. All rights reserved.



 Deal Settlement

PLANNED INNOVATIONS

MTM: Paper, Physicals, and Inventory Hedge Effectiveness & Accounting

Commodity Risk Reporting

Risk Review

Settlements/ Accounting

Financial Reporting

Credit Management

Order

Transportation & Delivery

VP Accounting




Contract with Commodity Pricing

Sales Purchasing and Logistics Risk Management

VP Treasury

AR/AP

General Ledger

 44



SAP Helps Nyrstar Manage Metal Purchasing, Sales, and Risk QUICK FACTS Nyrstar Headquarters: Zurich, Switzerland Industry: Mill products – primary metals manufacturers Products and services: Mining, smelting, and production of metals Revenue: €2.4 billion Employees: 4,000 Web site: www.nyrstar.com SAP solutions and services: SAP ERP application, SAP Best Practices for Mining package Implementation partner: SAP Consulting

Challenges and Opportunities

Improve visibility of metal sales and Power of SAP ERP to enable global purchasing, metal accounting, and risk management of all metal movements management across company High degree of fit with business Optimize profitability analysis by metal processes supported by the SAP Best Practices for Mining package component

Objectives

Benefits

Standardize key global business processes

Substantial improvement in visibility of metal price exposures and customer and product profitability

Set up metal accounting using new general ledger

RQ 1xxxx (10/09)

“Our project delivered central SAP ERP software capable of globally managing all our metal sales, purchases, and movements integrated with our metal risk and hedge management and metal valuation across our commercial function.”

Why SAP?

Implementation Highlights Finished on time and below budget Retired over 10 legacy systems Served as pilot customer for the enhancement package for the SAP ERP application, specifically for the treasury and risk management for commodities functionality

Reliable company profit from worldclass operations through minimized impact of price volatility Higher hedge accuracy and compliance with International Financial Reporting Standards Reliable daily commodity risk reports 20% faster financial close time

Phil Palmer, Global Manager, Business Systems, Nyrstar © 2012 SAP AG. All rights reserved.

45

Agenda 1.


2.


3.



Wrap-Up

Ramp Up Just Started https://service.sap.com/rampup *

* Requires login credentials to the SAP Service Marketplace © 2012 SAP AG. All rights reserved.

47

Treasury and Financial Risk Management With SAP Business Suite Innovations 2011 Integrate cash, liquidity and treasury and risk management. Integrate treasury functions with banks. Improve reporting, mitigate financial risks, improve returns, and institute better financial controls.

Treasury Operations Manager CFO/Head of Finance Local/HQ Finance Dept.

Cash Manager

Payments and Bank Communications Receive

Payments






Debt and Investments Strategies Deals Request: Borrow or Invest

 Operational Cash Flow

Receive Payments

Manage Accounts Receivables

Accounts Payable

Process Payment Orders

Manage Accounts Payables

Treasury Management



Manage Intercompany Transactions

Ensure Compliance

Accounts Receivable

Cash Management

Treasury Finance



Payment Processing

Process Electronic Bank Statements

Manage In House Cash

Reconcile Plans with Actual

Approval of High Volume Payments

Bank-toBank Reconciliation

Manage Bank Communications

Manage Treasury Transactions



Planning





Provide Risk Indicators and Report Exposures

 Analyze Bank Status



Forecast Liquidity

Propose Deal Processing Entering Post Value Processing Manage Sales Orders Services in and Interest Invoices by inPortfolio Supplier Supplier SelfSupplier Earned Self-Service Service

Manage Manage Valuation and Investments Accruals



Identify Risks and Consolidate

Deal Request & Management

Manage Positions

Hedge Management & Accounting



 Enhancements delivered with SAP Business Suite Innovations 2011 © 2012 SAP AG. All rights reserved.

48

Process Overview Electronic Bank Statement Processing

Receive and import bank statement

Automatic Posting

Postprocessing Bank Statement

Analyze results

Bank Statements

Bank Statement Overview

Subsidiary


PostProcessing

Subsidiary

49

Outlook – Optimized Processing of Bank Statements Better Efficiency – Replacement of multiple screens with a single efficient UI


50

Bank Statement Post Processing – Details Work list

 The work list shows all bank statement items to be processed according to the selection criteria Clearly Arranged Details Area

 Proposal of transaction in order to trigger a new search

 Determined business partner  Demonstration of the assigned amount and the open amount

 Editing and recheck of the note to payee Document Entry and Logging

 Fast assignment to open items through direct display of found documents

 Read more items with search parameters (Debtor, invoice number or amount)

 Posting on debtor/ vendor accounts Residuals and partial payment

 Posting on G/L accounts with account assignment templates

 Overview of documents, log, attachments


51

Note to Payee Adaptation and Scanning Possibility Edit & Check Note to Payee

 Edit Note to payee* E.g. Delete spaces and search for open invoices, documents, checks, payment advices *Original & Changed version are saved

3

Insert Advice information into note to payee and check again

 Possibility to insert complete

1

payment advice information (Copy & Paste)

 Scan Note to payee See result list & Open amount is cleared

2

 Post the documents


52

Automated Import and Transfer

Bank Statements of different formats are automatically imported into the system, processed, and transferred to local systems Automatic import of multiple files (variable path names) Monitoring and exception handling supported Support of standard formats

Bank Statements

Import and transfer bank statement

Bank Statement Overview

 SWIFT MT940/MT942  BAI Benefits  Support of central bank connectivity scenario with dispatching of bank statements  Mass upload of files allows for update of balances as soon as bank statement files are provided  Application log for exception handling


53

Agenda 1.


2.


3.



Wrap-Up

Analyst and Press Assessments Referring to Treasury and Financial Risk Management Solutions from SAP Source

Description

Treasury Technology Implementation Project of the Year – Implemented wall-to-wall SAP Treasury Solutions in less than 12 months timeframe A survey stated clearly that Integration strengths weighted higher than functionality benefits by choosing a Treasury Management System

“SAP have made serious attempts to deliver a depth of treasury functionality,” and the advice: “Evaluate any capabilities from your ERP provider against the specialist vendors” © 2012 SAP AG. All rights reserved.

55

Treasury and Financial Risk Management Performance

KPI

Industry Benchmark

STP – automated clearing rate of payment transactions

30%

75%

0%

STP – settlement time for FX transactions

99%

90%

4 hours

15 min

Optimize working capital – reduce average subsidiary cash balance

5 hours

100%

50 %

Improvement Potential

100%

100% Source: ASUG Benchmarking


56

Treasury and Financial Risk Management Performance (cont.) KPI Process efficiency/STP

Optimize Working Capital

People efficiency

Improvement Potential

97%

Description In-House cash center processing times reduced from 16 hours to under 30 minutes

80%

Reduced short-term cash requirements by 80%

81%

Decreased cash management and payment processing resources by 81% Source: SAP reference data base


57

Treasury and Financial Risk Management Performance (cont.) KPI

Description

Optimize working capital

Reduced borrowing costs by CHF 5 million globally

People efficiency

Managed global treasury operations for 11 currencies across 50 subsidiaries with 8 people

Process efficiency

Achieved 5 year ROI of over 400% and a payback period of approximately 1 year Savings of 1 FTE annually due to higher automation

Customer

Source: SAP reference data base © 2012 SAP AG. All rights reserved.

58

LoB Finance – Treasury and Financial Risk Management

Customer Facts: Amsterdam/ Netherlands-based, world’s largest global paints and coatings company Solutions: • SAP Treasury and Risk Management • SAP In-House Cash • SAP Bank Communication Management • SAP Cash Management Highlights/What’s special: • Global reference actively using all Treasury applications from SAP • Treasury Applications from SAP help speed Cash Flow and lower operating expenses © 2012 SAP AG. All rights reserved.

Customer Facts: Stockholm/ Sweden-based, Europe’s fifth largest telecom operator with 164.4 million subscriptions, €12 billion revenue Solutions: • SAP Treasury and Risk Management • SAP In-House Cash • SAP Bank Communication Management • SAP Cash Management Highlights/What’s special: • Global reference actively using all Treasury applications from SAP • Implemented BCM in less then 3 months

Customer Facts: New York/ US-based, world’s leading oral, personal, and home care product manufacturer Solutions: • SAP Treasury and Risk Management • SAP In-House Cash • SAP Cash and Liquidity Management Highlights/What’s special: • Global reference using Treasury all over the world • Established Centralized Cash Management and Foreign Exchange Trading Model in Switzerland

59

Recent Innovations That Enable the End-to-End Process

SAP Payment Approval Mobile App

In-Memory

Mobility

On-Demand

Analytics

 Release payments from everywhere

SAP Rapid Deployment Solutions  Fast time-to-value for Treasury and Risk Management

Analytics  Embedded Analytics (Cash Dashboard)  HANA Applications for Cash Forecasting


60

Treasury Applications from SAP Summary Roadmap Mid-Term (Plan)

Short -Term (Plan)

EhP 5 – Today • Support of Commodity Risk Management • Enhanced hedge accounting using new commodity paper deals • Hedge Management for FAM • Rapid Deployment Solution available • Readiness for SEPA and UNIFI/ISO20022 standard


•

Continuous Innovations in regards to Commodity Risk Management

•

Support of CGI ISO20022 payment formats

•

Continued investment in customer innovations

•

IFRS9 and FASB

•

Dodd-Frank Act and EMIR

•

Mobile App for the release of payments

•

TCO Reduction for Payments and Bank Communications

•

Improved processing of Bank Statements in SAP Cash Management (FEBAN)

•

Further enhancements in the area of Commodity Risk Management

•

Optimized import of Bank Statements

•

In-memory (HANA)-based Cash Forecasting

This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This This document presentation is provided and SAP‘s without strategy a warranty and possible of any kind, futureeither developments express orare implied, subject including to change butand not may limited beto, changed the implied by SAP warranties at any time of merchantability, for any reason fitness withoutfor notice. a particular This document is provided purpose, without or non-infringement a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement

61

Thank You! Contact information: Christian Mnich Solution Management | Treasury and Risk Management | LOB Finance SAG AG | Dietmar Hopp Allee 16 | 69190 Walldorf | Germany [email protected] Mark Stapleton [email protected]


No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iSeries, pSeries, xSeries, zSeries, eServer, z/VM, z/OS, i5/OS, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Adobe, the Adobe logo, Acrobat, PostScript, and Reader are either trademarks or registered trademarks of Adobe Systems Incorporated in the United States and/or other countries.

SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, StreamWork, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects Software Ltd. Business Objects is an SAP company. Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL Anywhere, and other Sybase products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Sybase, Inc. Sybase is an SAP company. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. The information in this document is proprietary to SAP. No part of this document may be reproduced, copied, or transmitted in any form or for any purpose without the express prior written permission of SAP AG.

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A Detailed Guide to Treasury Functionality and Enhancements from ...

A Detailed Guide to Treasury Functionality and Enhancements from ...

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