There are generally two types of intercompany loans that a Treasury department may put in place:

1. An intercompany loan to fund short-term working capital. This is normally managed through an in-house bank structure. This loan is through a zero-balance sweep structure and does not have a fixed loan amount or a fixed term.
2. An intercompany loan to fund medium to longer term requirements. This is normally called a structured intercompany loan that has a fixed amount and a fixed term. This loan is usually put in place to provide funding for a medium to longer term or until more permanent funding can be established.

The intercompany loan process generally needs to go through a review process with different parties of the organization, particularly the Tax Department, to understand the regulatory requirements within the country of the lender and borrower with respect to such loans. The amount, tenure, and the terms of the loan require an internal review and approval process. Upon completion of that process and approval of the loan, the intercompany loan can then be entered into the SAP Treasury and Risk Management module for management and monitoring.

Using SAP’s Transaction Manager module for the tracking, accounting, and reporting of intercompany loans is a smart way to go, as it automates the processing of the intercompany loans, and integrates well into other SAP modules. We discuss the process for supporting intercompany loans using SAP’s Transaction Manager module. The example intercompany loan is a $10 million, five-year, fixed rate loan that pays interest every six months. Before covering the SAP process for intercompany loans, we explain the required master data.

Prerequisites

The functionality described in this article is included in SAP ERP Central Component (ECC), although licensing may be required to use the SAP Treasury and Risk Management module. SAP’s Transaction Manager module tracks treasury trades through their full life cycle–from trade entry to payments to month-end processing to maturity of the trades. All accounting entries related to the trades are triggered by the trades and are posted directly to the SAP General Ledger.

The primary advantages of implementing intercompany loans in an SAP system include:

• Mitigate technical and systemic risk
• Achieve further integration with other SAP modules
• Improve security
• Strengthen Sarbanes-Oxley compliance
• Improve cash forecasting and / or cash positioning
• Standardize and optimize treasury processes

Once the intercompany loans are in the SAP system, only minimal ongoing maintenance should be needed. All postings and payments related to the intercompany loans will be generated or triggered from the trades. The intercompany loans should only need to be modified if an issue is encountered or if the terms of the intercompany loans change.

To access the Transaction Manager in the Treasury and Risk Management functionality, follow menu path SAP Menu > Accounting > Financial Supply Chain Management > Treasury and Risk Management > Transaction Manager. SAP’s Transaction Manager is a module within Treasury and Risk Management. Within Transaction Manager, the intercompany loans functionality is in the Money Market sub-module of Transaction Manager.

Master Data

Before getting started on the processing of intercompany loans in the SAP system, we cover the master data relevant to the processing of intercompany loans.

The asset side of the intercompany loan is entered into the lending company code, and the counterparty of the trade is defined in the SAP system as a business partner, which is the entity that is on the borrowing side of the intercompany loan. Because an intercompany loan needs be entered both for the lending and borrowing entity, both the sender and the borrower need to be created as a business partner (i.e., when you enter an intercompany loan for the lending entity, the business partner is the borrowing entity and vice versa). Business partners are created or modified through transaction code BP. For user-friendliness of the system, it is important to keep the naming convention consistent. For example, entities that have intercompany loans could have associated business partners with the naming convention SUB_XXXX, where XXXX is the four-character company code number (e.g., SUB_1000). The Business Partner ID is 10 characters long.

If business partners have been created for other SAP modules, the use of the BP type is a way to categorize business partners. For example, the business partners created for treasury trades could have a BP type of SUTR so that you can distinguish them from business partners used in other SAP modules, such as the Credit Management module in the SAP system (Figure 1).

Figure 1

Business partner types functionality allows business partners to be categorized

When you assign a role to a business partner, this action opens up functionality that can be used for that business partner. All business partners to be used for trade processing must have the role of Counterparty assigned. Only business partners with the role of Counterparty (TR0151) assigned can be used in Transaction Manager.

Intercompany loans are recorded in the financial statements of individual business units. The accounting entries related to intercompany loans are eliminated from the consolidated financial statements of a group of companies of which the business units are a part using intercompany elimination transactions.

To make this happen, assign the FS0005 FS – Direct Input role to each intercompany business partner. Then, on the Control tab, set the Trading Partner field to the corresponding group company ID for the entity in the SAP system. For example, SUB_0050 should have the Trading Partner field set to C0050 (Figure 2). (To view the company ID assigned to the entity, follow menu path IMG > Financial Accounting > Financial Accounting Global Settings > Company Code > Enter Global Parameters [not shown].) After you enter a setting in the Trading Partner field, the SAP system populates the appropriate trading partner field in all related accounting entries. (Note: The document type used must have the Trading Partner indicator selected in the definition of the document type [not shown].)

Figure 2

Assign a trading partner to the intercompany business partners

The bank accounts used for the intercompany loans are entered into the business partner master record bank details, just as it is done for vendors (Figure 3). Any intercompany trade-related payments use this bank account information.

Figure 3

Enter bank account information in the intercompany business partners

Standing Instructions

Standing instructions is a term used to set defaults for trade types in the SAP system. Standing instructions decrease manual processing, and therefore, decrease operational risk related to processing intercompany loans in the SAP system. There are four types of standing instructions: payment details, correspondence, authorization, and derived flow standing instructions. All standing instructions are set by company code and are associated with the Counterparty role.

To get to the standing instructions, execute transaction code BP, click the open icon , and in the pop-up screen (not shown), enter the trade-related business partner. This action displays the screen shown in Figure 4.

Figure 4

Display the business partner in the General Business Partner role

In the Change in BP role field, select the Counterparty role, as shown in Figure 4. After you select the role of Counterparty, a Company Code button appears on the tool bar, as shown in Figure 5.

Figure 5

Display the business partner in the Counterparty role

After you click the Company Code button, you are taken to the standing instructions screens, as shown in Figure 6.

Figure 6

Counterparty business partners and standing instructions

Notice the different standing instructions tabs shown in Figure 6. Each of the standing instruction functionalities set on each of the tabs is described next.

Figure 7 diagrams business partner master records and shows a general section of the business partner master record and a company code-specific section, similar to customer and vendor master records in an SAP system. As the diagram shows, business partner master data consists of general data and company code specific data. The standing instructions are set by company code.

Figure 7

An overview of business partner master data

Payment details standing instructions: The payment details standing instructions are set in the SI Payment Details tab. Payment details standing instructions are how the default settlement instructions are set by company code and trade type for each business partner. Once the payment details standing instructions are set for a business partner, currency, trade type, and company code, the payment instructions default into trades as the trades are created. The person entering the trade does not need to make any changes to the payment instructions. The fields set for each payment details key (Pay.Det.ID) in the payment details standing instructions are the house bank account, business partner bank details, payment method, and so on, which default into the trade for the company code and business partner for which the standing instructions are completed as the trade is being entered into the SAP system.

First, you enter the payment instructions, as shown in Figure 8.

Figure 8

Enter counterparty business partner bank details

After you double-click the row, the system displays a pop-up window that provides a nicer display of the fields in the row.

To have the payment details default into specific trade types, assign them to trade types by selecting the field (to the left of the Curr [currency] column and indicated by the arrow in Figure 8) and clicking the assign icon .

After you click the assign icon, the system displays the screen shown in Figure 9 in which you specify the trade types to which the standing instructions should be assigned by placing the cursor on a folder of the Trans. Hierarchy and then clicking the select/deselect icon . These steps are done for both columns P-ID Outg. (outgoing) and PmntID-Inc (incoming) flows in the trades.

Figure 9

Assign payment details to incoming and outgoing flows

Correspondence standing instructions: The correspondence standing instructions are set in the SI: Correspondence tab. This tab belongs to the classic customizing of correspondence. (SAP has enhanced the ability to send correspondence related to treasury trades with the Correspondence Framework. To use the Correspondence Framework, it must be activated with the FIN_TRM_CORR_FW business function. If the Correspondence Framework is activated, the correspondence standing instructions are entered through transaction code FTR_INT_ASSIGN (not shown). An internal trade sheet can be created for each intercompany loan. The internal trade sheet documents the characteristics of the trade, such as the amount, interest rate, and payment dates, including the settlement instructions. The correspondence standing instructions indicate that for any new trades entered into the SAP system, an internal trade ticket should be printed, faxed, or emailed. As intercompany loans are internal transactions, printing or sending trade correspondence for intercompany loans is typically not necessary. For example, Figure 10 shows that for BP SUB_3000, any intercompany trades entered in company code 0006 should print a trade ticket.

Figure 10

Specify correspondence standing instructions

Authorization standing instructions: The authorization standing instructions are set in the SI: Authorizations tab. In this step, specific trade types are authorized for a business partner in a company code. Without this authorization, it is not possible to enter trades for this business partner in this company code. The indicator to the right of the product type is selected to grant authorization (Figure 11).

Figure 11

Authorize business partners for trade types

Derived flow standing instructions: The derived flow standing instructions are set in the SI: Derived Flows tab (Figure 6). Derived flows are cash flows that are automatically added to the trade’s cash flows based on an existing flow. Uses of derived flows are taxes or charges. For example, withholding taxes may be based on the interest earned on an investment. Derived flow standing instructions automatically add the tax cash flows to the trade as it is saved. The advantage of this functionality is that the tax cash flows are set up in advance in the standing instructions and the person entering the investment into the SAP system does not need to enter them into the trade.

Process Steps

After the business partner master data has been set up, the process flow includes several steps. Before covering the details, we explain the end-to-end process flow when processing intercompany loans.

Table 1 lists the steps to process an intercompany loan in the SAP system.

Next, we cover the process steps. The example trade is a fixed rate, five-year intercompany loan where company code 100 is the borrower and company code XX01 is the lender. Interest will be paid every six months. To create an intercompany loan, execute transaction code FTR_CREATE, and in the screen that appears, populate the fields shown in Figure 12.

Figure 12

Enter data to create an intercompany loan

After entering the data and pressing the Enter key, you are taken to the Structure tab of the trade, where the main details of the trade are specified, such as the amount, start and end date, interest type, and frequency (Figure 13). It is in the Structure tab of the trade that the structure of the trade is defined. The intercompany loans can be fixed, floating, or a combination of fixed and floating interest rates through their life cycle. The reference interest rates are defined in configuration in advance and used in the floating rate trades. The reference interest rates can be any benchmark interest rate such as LIBOR or the Banker’s Acceptance rate.

Figure 13

Enter the main characteristics of the intercompany loan

When you are entering the main terms of the trade, you can use a number of shortcuts when entering trades, as shown in Tables 2 and 3. (The date shortcuts apply to the start date, end date, and contract date.)

If a date of a trade falls on a weekend or holiday based on the calendar assigned to the trade, you receive a pop-up message like the one in Figure 14 that indicates that a date in the trade (i.e., 9/26/2021) is not a working day. Click the enter icon  to keep the date in the trade. Alternatively, you could click the left pointing arrow to select the prior working day, or the right pointing arrow to select the next working day.

Figure 14

Non-working day pop-up message

After you enter the main terms of the trade and press Enter, the shortcut keys are filled in, as shown in Figure 15.

Figure 15

Specify the frequency of interest payments in the loan

Next, to have interest paid every six months, select Monthly for the Frequency, and in the All field, enter 6, as shown in Figure 16.

Figure 16

Specify interest payments every six months

At this point, if we assume the standing instructions have been set up for the company code business partner combination, the trade can be saved. This is the benefit of using the standing instructions. They default into the trade automatically, decreasing operational risk with manual trade entries. Before saving the trade, we walk you through the other tabs in the trade.

The Administr. tab holds a number of fields. One field that is required is the Gen. Valn Class field, which is used to drive the accounting for the trade. The Gen. Valn Class field can be configured to automatically populate into the trade. The Assignment field is a free field that can be used for intercompany loan reporting. In Transaction Manager, there is field selection configuration that allows companies to set fields in trades as hidden, mandatory, or display only. In Figure 17, the field selection configuration has hidden a number of fields that are not being used. We discuss this configuration in Part II of this article series.

Figure 17

Sample fields displayed in the Administr. tab in a trade

The Other flows tab is used for miscellaneous one-off fees or charges such as an issuance fee (Figure 18). These entries would be for any flows that need to be attached to the trade, but are not part of the structure of the trade.

Figure 18

The Other flows tab in the trade

The Payment details tab of the trade holds the settlement instructions to be used for the cash flows of the trade (Figure 19). Notice the first field is the direction of the cash flow. The + row holds the payment instructions for incoming cash flows, and the - row holds the payment instructions for outgoing cash flows. The field in the second column is the currency of the cash flow. The field in Valid from column allows you to change the settlement instructions of a trade’s cash flows at any time adding a new entry with a Valid from date of the current date, which would apply for the current date and moving forward. The field in the FTyp… (flow type) column allows different settlement instructions based on the flow type of the cash flow. For most trades, specifying the settlement instructions for incoming and outgoing flows in the currency of the trade is all that is needed.

Figure 19

The Payment details tab

When you double-click either row in Figure 19, you can see all the fields that can be specified, as shown in Figure 20.

Figure 20

Display payment details of the trade

The Cash flow tab shows all cash flows of the trade based on the characteristics of the trade, and any additional cash flows entered in the Other flows tab (Figure 21). The flow type characterizes the type of flow, such as principal cash flows versus interest cash flows. It is a good practice to check the cash flows and payment dates of the trade before saving the trade.

Figure 21

View trade cash flows

After you double-click any cash flow in Figure 21, the system shows the details of how the flow amount was calculated (Figure 22). For example, the interest flow with a payment date of 4/07/17 and an amount of $115,000 is calculated as 180 days out of 360 at 2.3% interest rate on $10,000,000. (The amount of $115,000 is calculated as .023 * 10,000,000 * [180/360]).

Figure 22

Validate the interest cash flow calculations

The Status tab (Figure 23) shows information such as if correspondence standing instructions are relevant to the trade, the current status of the trade, who created the trade, on what date and time.

Figure 23

The Status tab in trade tracks the activities related to the trade being viewed

Figure 24 shows the Status tab of a trade where processing has started. Notice that the tab displays the current status of the trade.

Figure 24

The Status tab after processing has been done on the trade

Before saving the trade, click the check icon  to verify the correctness of the trade (Figure 25). The following message is displayed if all required fields have been filled: Check carried out successfully. Click the save icon  to save the trade. A message is then displayed showing the trade number created, such as Interest rate instrument 2000026 in company code XX01 is created.

Figure 25

Verify correctness of trade

To display the trades created, execute transaction code FTR_EDIT. This action displays the screen in Figure 26. In the Company Code and Transaction fields, enter XX01 and 2000003 (the trade number). Leave the default setting in the Financial Transaction field and then click the Display button.

Figure 26

Edit trade to view mirrored trade number

If the mirroring configuration has been done, the system displays the mirrored trade number when displaying either side of the intercompany loan, as shown at the bottom of Figure 27.

Figure 27

View the mirrored trade number

As only the initial creation of the intercompany loan will be mirrored, moving forward any changes must be made to both the investment and borrowing sides of the intercompany loan.

Within the sub-modules of Transaction Manager, SAP has Collective Processing programs. These programs are called Collective Processing because from these programs you can create a trade, change a trade, settle a trade, reverse a trade, or show the history of a trade. The output of the report is an SAP List Viewer (ALV) grid with a drilldown to the trades or business partners. This drilldown feature makes the Collective Processing program an excellent report on outstanding trades. Outstanding trades are trades that are currently active trades. Figure 28 is the Money Market Collective Processing program, which is used for any trades in the Money Market sub-module of Transaction Manager.  

Figure 28

Transaction Manager Collective Processing program

As shown in Figure 28, after you select a variant or specify the settings and click the execute icon, you see the output displayed in an ALV grid, like the one shown in Figure 29. The Money Market Collective Processing program (transaction code TM00) can be used as the primary report for displaying and processing outstanding trades.

Figure 29

Display intercompany loan trades

To release the flows to accounting, you need to select each trade line, click the Settle button, review the trade details, and then click the Save button to approve the trade. (Settling a trade allows the trade’s cash flows to post to the ledger. Note: This is an unfortunate translation from German because settling in Treasury terms also means paying. Moving forward, the SAP term of settling will be referred to as SAP settling.) Using standard SAP authorizations, a user other than the user who created the trade must do this step so that there is an approval process before trades are posted or paid. (This step could be done using workflow custom work, but it is not necessary.)

With the configuration set to require trades to be settled or approved, the trade must be settled before any accounting entries or payments can be made for the trade. This is a good control in that before accounting entries or payments can be made for a trade, a second person needs to approve or SAP settle the trades.

After the trades have been created and approved/SAP settled, the next step is to post its inception cash flows to the ledger, which is done using the Treasury: Post Flows program (transaction code TBB1) shown in Figure 30. The Treasury: Post Flows program is run to post trade-related cash flows to the ledger. This program is used at inception of the trades, for periodic payments, such as interest payments, and at the maturity of the trades.

Figure 30

Post trade cash flows to ledger

Keep in mind that a Treasury user is not able to change the G/L accounts posted to by Treasury trades. All accounting entries are driven by configuration. This is a good feature of tracking trades using Transaction Manager.

The Treasury: Post Flows program can be run across all company codes and trades or for specific trades, but for illustration purposes, we enter the specific company codes and trade numbers on the input screen for my example intercompany loan. The Up to and Including Due Date field defaults to the current date. The Test Run field, when populated, allows users to view the accounting entries in simulation mode. This is helpful to ensure the accounting entries are correct before they are posted to the ledger. The Test Run indicator is an input field on all the Transaction Manager accounting programs.  

After clicking the execute icon for the Treasury: Post Flows program, you see the accounting entries that are made to the ledger. Figure 31 shows the output screen of the Treasury: Post Flows program, which shows the accounting entries to be made for the intercompany loan on the inception date of the trades. At inception of an intercompany loan, the lending entity pays the borrowing entity the principal amount of the trade.

Figure 31

Posting inception cash flows to the ledger

If we assume the Treasury payment program is configured, when the post trade flows program (TBB1) is run, payment requests are created. The payment requests are paid through the Treasury payment program (F111). A payment request is created for both the incoming and outgoing flows. This is done to net flows on the incoming side so that one amount is posted to the cash clearing account and automated clearing by the bank statement is done. This is in the Electronic Bank Statement configuration, which is not part of Transaction Manager.

An example of when trade flows would net is at maturity of an investment. The repayment of principal and the last interest payment are made in one payment by the counterparty so that you want the posting to the cash clearing account to be netted as well. All trade-related flows (incoming and outgoing) are run through the Treasury payment program so that payments can net and there is a consistent process for all trade flows.

The Display Payment Requests report (transaction code F8BT) is the report to view payment requests. Payment requests are payments to be paid by the Treasury payment program. Figure 32 shows the input screen to the Display Payment Requests report. When running the report, you can specify the company codes or use the company code field range to go across all company codes. If the Open indicator is selected, the report shows any payment requests that have not yet been paid. If the Cleared indicator is selected, the report shows paid payment requests. Either or both indicators can be selected when running the report. There are a number of input fields, such as the Created on field, that can be used to narrow down the payment requests displayed. After entering the inputs, click the execute icon.

Figure 32

Display payment request to be paid by the Treasury payment program

In Figure 33, you see the two payment requests created. You can drill down to see all details related to payments. Notice that there are two payment requests created. The first is an incoming payment request in the entity that is borrowing funds. The second is the outgoing payment request that is triggered from the investment side of the intercompany loan.

Figure 33

Display inception payment requests for intercompany loan

The next step would be for the Cash Manager to run the Treasury payment program. Most organizations would have straight-through processing of the Treasury payments going from the SAP system to the banks, without any manual processing of the payments.

At month-end, accrual postings for any outstanding trades are made by running the Treasury Accrual program (transaction code TPM44). To do this, the accrual program, shown in Figure 34, would be run across all outstanding trades. The program makes the month-end interest accrual entries to the ledger automatically. As with the Treasury: Post Flows (transaction code TBB1) program, there is a test run indicator to allow you to view the accounting entries before they are made to the ledger. The Treasury: Post Flows (transaction code TBB1) program should be run across all outstanding trades in a productive environment. However, for illustrative purposes, we run it for my sample trades by entering the company code and transaction fields with the sample trades, and entering the month-end date with the current month-end date.

Figure 34

Post month-end accrual entries

After you click the execute icon in Figure 34, the SAP system shows a report of the different accrual-related flows (these would be the interest or fee flows of the trade) and the number of days being accrued (Figure 35).

Figure 35

Display accrual interest flows of intercompany loans

From Figure 35, click the Logs and Messages button to see the accounting entries. In this case, the accrual postings are made using the book and reverse method. The SAP system supports the reset (book and reverse) or difference (incremental) methods of making accrual postings.

With incremental postings, the incremental interest accrual amount from the last accrual date or month-end date to current month-end date is booked on the last day of the month. On the payment date, interest payment is booked and the accrued interest is reversed with an additional posting.

With book and reverse postings, the full interest accrual amount from the inception of the trade or last interest payment to month-end date on the last day of the month is booked, and then the full amount is reset the next day. On the payment date, the full amount of interest is booked. This approach is the cleanest when dealing with foreign currency accruals as there is no chance for there to be exchange rate issues that would produce false gains and losses.

Figure 36 shows the posting log for the interest accruals. Notice how the first posting is made on 10/31/16 (top right corner of the accounting entry), and the reset is made on 11/01/16.

Figure 36

Month-end accrual G/L postings

Interest Rate Adjustments

For floating interest rate intercompany loans, interest rates can be set on the reset date either manually or automatically. The interest rate adjustment programs can be found on the SAP menu under Accounting > Financial Supply Chain Management > Treasury and Risk Management > Transaction Manager > Money Market > Back Office > Variable Interest Calculation.

To do trade-by-trade interest rate resets, use the Create Next Interest Adjustment program (transaction code TI10) shown in Figure 37. The user should enter the company code and trade number, and press the Enter key. (The Ref.int.rate field can be populated to filter the interest rate resets to specific reference interest rates, but as most intercompany loans would have only one reference interest rate, it is not necessary to populate this field.)

Figure 37

Interest rate adjustments done trade by trade

You are then taken to Figure 38, where the SAP system displays the interest rate adjustments of the trade. The user sees the prior interest rate adjustment rates and dates. The next interest rate adjustment date is displayed in the detailed view. To set the interest rate, the user enters the interest rate corresponding to the next interest rate adjustment date in the Interest rate field, as shown in Figure 38.

Figure 38

Interest rate adjustments done trade by trade

Click the save icon to save the changes. The message Manual rate/price adjustment created will be displayed to the user.

If a company has many intercompany loans and the interest rate market data for the day of reset is being loaded into the SAP system, the Create Automatic Adjustment (transaction code TJ05) program can be used. This program does interest rate adjustments across multiple trades (based on the inputs selected). The input screen to the Create Automatic Adjustment program is shown in Figure 39.

Figure 39

Interest rate adjustments across multiple trades

Changes to Trades

When there is a paydown of the intercompany loan, the steps are the following:

1. Edit both sides of the trade to reflect the paydown (decrease in principal)
2. Run the Post Trade Flows program TBB1 to post the paydown to the ledger, creating payment requests.
3. The Treasury payment program (transaction code F111) is run to move the cash related to the paydown, and send the payments to the bank.

Use the Edit Financial Transaction program (transaction code FTR_EDIT) to change, display, SAP settle (approve), or reverse, a trade. Enter the company code and trade number and then select the activity (e.g., Change). The input screen to FTR_EDIT is shown in Figure 40. Enter the company code and trade number of one side of the intercompany loan, and then click the Change button.

Figure 40

Editing intercompany loan trades

This action displays the trade details. To adjust the principal amount of the trade, click the other changes in capital structure icon  to the right of the currency field. This action displays the pop-up screen in Figure 41. Enter the flow indicating a principal decrease in the FType field, the amount of the paydown in the Payment Amnt field, and the payment date in both the Payment Date and Calculation Date fields. When finished, click the Copy button on the bottom right of the pop-up screen.

Figure 41

Periodic paydown of intercompany loan

Whenever you are making a change to the terms of a trade, it is good to check that the cash flows have been adjusted correctly. Do this by selecting the Cash flow tab of the trade, as shown in Figure 42. Notice that the amount of the paydown is reflected on the payment date entered in Figure 41. Also, notice that the interest payment due at the next interest payment date (4/7/2017) has been adjusted due to the change in the principal amount.

Figure 42

View the periodic paydown in the cash flows of the trade

Click the save icon to save the changes. The steps described in Figures 40 to 42 should be made on the other side of the intercompany loan. In other words, both trades in the intercompany loan need to be changed to reflect the paydown.

As mentioned previously, the Treasury: Post Flows program (transaction code TBB1) shown in Figures 30 and 31 is run to post trade-related cash flows to the ledger. This would include interest payments and maturity cash flows of the trades.

Relevant Reporting

SAP Transaction Manager is delivered with several key reports that are useful for intercompany loan processing. Table 4 shows just a few of them. Some are shown in Figures 43 to 48. SAP Transaction Manager is delivered with many more standard reports.

Figure 43

Input screen to the Money Market Collective Processing program

The first report mentioned in Table 4 is the Money Market Collective Processing program (transaction code TM00). This is a program as well as a report. The input screen, shown in Figure 43, has many fields that can be used to select trades. The Term End date field defaults to be greater than or equal to the current date, which makes this a logical outstanding trade report. The user should enter the input criteria and click the execute icon.

The output of the Money Market Collective Processing program is an ALV grid with a drilldown to the trades or business partners, which makes the Collective Processing program an excellent outstanding trade report, as shown in Figure 44. Users can create display variants to show different fields from the trades, and to total and subtotal various fields. Many fields from the trades are available to be displayed on the output screen. The Money Market Collective Processing program is a multi-purpose outstanding trade report. The icons on the toolbar, shown below, can be used for processing on the trades, such as creating, changing, or displaying trades.

Figure 44

The output screen of the Money Market Collective Processing program is an ALV grid

A second Transaction Manager report that the Accounting department loves is the Posting Journal report. The Posting Journal displays all postings made related to treasury trades. The report includes cash flow postings, accrual postings, and reversed postings. This report, shown in Figure 45, has many input fields available to filter on the accounting entries, and the output screen is an ALV grid with many trade and accounting related fields to display.

Figure 45

The many fields to query trade-related accounting entries using the Posting Journal

With this report, users can see all postings made for an intercompany loan contract, or across intercompany loan contracts. The output of the report is an ALV grid, from which users can drill down to the financial accounting document, to the trade, and/or to the payment request from this report. Display variants can be created on the Posting Journal to show book values, total income across entities, or accrued interest summaries. Figure 46 shows a sample output screen of the Posting Journal report.

Figure 46

Sample output screen of the Posting Journal report

The last report covered in this article is the Interest Rate Adjustment Schedule (transaction code TJ07). Using the Interest Rate Adjustment Schedule, you can see all upcoming interest rate adjustment dates across all intercompany loan trades. To use the report, enter the relevant company codes in the Company Code field and the date range within which the interest rate adjustments should be displayed. If relevant, the reference interest rate can be entered in the Reference interest rate field, as shown in Figure 47. Depending on how the Fixing Date is populated, the report can show past and future interest rate adjustments.

Figure 47

Report to view interest rate adjustments

After entering the inputs, click the execute icon to run the report.

The output is an ALV grid. Figure 48 shows a sample output screen that shows the fixing date, day of the week of the fixing, the product type, transaction type, company code, trade number, and reference interest rate sorted by the fixing date. The lock icon displayed between the reference interest rate and the interest rate fields in Figure 48 indicates if the interest rate has been fixed or not. If the interest rate has been fixed, the icon displays as a closed lock. If the interest rate has not yet been set, the icon shows as an open lock.

Figure 48

Sample Interest Rate Adjustment Schedule report layout

The Interest Rate Adjustment Schedule can be found on the SAP menu by following menu path Treasury and Risk Management > Transaction Manager > Information System > Transaction > Deadline Monitoring > Interest Rate Adjustment Schedule (transaction code TJ07).

Integration Points

The intercompany loans are reflected in the cash position report and postings for the intercompany loans are made from Transaction Manager directly to FI. If a cost center is needed for posting, the cost center is entered into the Transaction Manager configuration. (The path to enter the configuration to include a cost center in postings is SPRO > Financial Supply Chain Management > Treasury and Risk Management > Transaction Manager > Accounting > Link to Other Accounting Components > Allocate Additional Account Assignments to Account Assignment References.)

When an intercompany loan is saved in the SAP system, its cash flows are immediately visible in the Cash Position or Liquidity Forecast reports. When the Post Flows program (transaction code TBB1) is run and the trade cash flows become payment requests, the payment requests reflect in the cash position reports, and the associated cash flows no longer show in the Cash Position or Liquidity Forecast reports as trade cash flows.

Any postings made for Treasury trades are posted directly from the Transaction Manager accounting programs to the SAP General Ledger.

Mary Loughran

Mary Loughran has been specializing in the SAP Financials area since 1997 and has worked with numerous clients throughout North America and Europe in the areas of finance and treasury. She was employed as a consultant with SAP America and was a designated expert within SAP America for treasury before she left SAP in 2004. Mary’s expertise is in the areas of SAP Treasury and Risk Management, SAP In-House Cash, Liquidity Planner, Accounts Payable, payments from SAP in general, Cash Management, and Electronic Banking. Mary was an independent consultant from 2004 to 2016. 

You may contact the author at loughran@gmail.com.

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Valerie Choo

Valerie Choo is a global treasury subject matter expert. She has been involved in multiple SAP Treasury and Risk Management projects such as implementing global treasury systems, consolidation of SAP Treasury and Risk Management activities, and process improvements, particularly in Cash Management Operations. Valerie’s expertise in the functional areas includes cash management back office operations, electronic bank statement processing, in-house cash, and SAP Treasury and Risk Management integration with other work streams, particularly accounts payables, accounts receivables, intercompany and tax.

You may contact the author at choova24@gmail.com.

If you have comments about this article or publication, or would like to submit an article idea, please contact the editor.