Money Market in SAP Treasury Risk Management Functionality

The purpose of this document is to describe the functionality of money market instruments.

Money market transactions are used for short-term investments and for borrowing liquid funds. After a fixed-term deposit investment contract created, you execute correspondence and pay the money. When the transaction at maturity date, you will receive the capital and earn some interest income. You can also run accrual and calculate net price value when period end has been reached.

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 scenario includes processing of the related financial transactions, from cash position analysis in Cash Management, over deal capture in the front office, and deal confirmation and payment in back office through to transferring the relevant data to Financial Accounting.

Several monitors for transactions, correspondence, and alerts helps you to manage you financial transactions safely with a high degree of automation.
The solution will produce the accounting results automatically. Postings of positions and flows are done at inception and maturity of the deal. At period end accrual & deferral and unrealized profit and loss is calculated and posted. The solution is closely linked to the Financial Accounting (FI) component since all the data that is relevant for posting in the money market area is automatically transferred to FI.

Also flexible reporting and evaluation structures for analyzing your financial transactions, positions, and portfolios are provided.



Features

Trading

The trading area contains functions for entering money market transactions. It also enables you to also call up information on transactions or make changes at a later date. Collective processing functions are available to help you manage your transactions efficiently.

The product types in the Money Market area are:

• Fixed-Term Deposits

• Deposits at Notice

• Commercial paper

• Interest rate instruments

• Cash flow transactions

• Facilities

Back office

Once you have entered financial transactions in the trading area, you settle them in the back office. The back office area also contains functions for checking and changing the transactions. Transaction postprocessing primarily involves:

• Adding any missing transaction data that is needed to process the transaction further

• Preparing for posting and payment (for example, by checking the accounts used)

Generating correspondence in the form of internal or external confirmations.

The collective processing functions are also available in the back office. This area also includes functions for netting transactions and for entering and editing references .

Accounting

Once you have entered the transactions in the Trading area and checked them and added any missing details in the Back Office , you then need to process them for accounting purposes. The accounting area includes functions for transferring data to Financial Accounting, such as posting reports or position management postings. It also includes functions for parallel valuation.

Master Data Management

Financial transaction processing in the Transaction Manager is based on master data.

Information System

The information system provides a range of reports for analyzing your money market transactions. The Money Market Information System is part of the Transaction Manager Information System, which offers analyses and evaluations across the whole of the Treasury and Risk Management dataset.

The link to the SAP drilldown reporting tool and SAP Query also allows you to define your own reports in addition to those provided by SAP.

Process Overview Table for MM Instruments - Standard

Process STEPS