SAP S/4HANA Treasury and Risk Management Training PDF

S4F51 Customizing in Treasury and Risk Management in SAP S/4HANA.. PARTICIPANT HANDBOOK INSTRUCTOR-LED TRAINING. Course Version: 17 Course Duration: 5 Day(s) Material Number: 50155855 SAP Copyrights, Trademarks and Disclaimers © 2021 SAP SE or an SAP affiliate company....

S4F51 Customizing in Treasury and Risk Management in SAP S/4HANA.. PARTICIPANT HANDBOOK INSTRUCTOR-LED TRAINING. Course Version: 17 Course Duration: 5 Day(s) Material Number: 50155855 SAP Copyrights, Trademarks and Disclaimers © 2021 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see http://global12.sap.com/corporate-en/legal/copyright/index.epx for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. 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This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. 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. © Copyright. All rights reserved. iii Typographic Conventions American English is the standard used in this handbook. The following typographic conventions are also used. This information is displayed in the instructor’s presentation Demonstration Procedure Warning or Caution Hint Related or Additional Information Facilitated Discussion User interface control Example text Window title Example text iv © Copyright. All rights reserved. Contents ix Course Overview 1 Unit 1: Overview of Financials for SAP S/4HANA 3 Lesson: Describing SAP HANA and SAP S/4HANA 17 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA 19 Lesson: Understanding the SAP Treasury and Risk Management Solution 34 Lesson: Maintaining Business Partner Settings 49 Exercise 1: Create a Business Partner 71 Lesson: Defining House Bank Accounts 75 Lesson: Defining Securities-Related Master Data 79 Exercise 2: Create a Securities Account 85 Exercise 3: Create Securities Class Data 93 Unit 3: General Configuration Settings 95 Lesson: Configuring the Company Code 97 Lesson: Defining Valuation Areas 103 Lesson: Configuring the Valuation Class © Copyright. All rights reserved. v 109 Unit 4: Transaction Manager – Basic Customizing for all Products 112 Lesson: Creating Traders and Portfolios 119 Exercise 4: Create Trader and Portfolio 123 Lesson: Defining Trade Types 135 Exercise 5: Maintain Product and Transaction Types in Money Market 143 Exercise 6: Assign Flow Types 149 Exercise 7: Assign Condition Types and Default Valuation Class 157 Exercise 8: Create Fixed-Term Deposit Transaction 171 Exercise 9: Maintain Product and Transaction Types in Foreign Exchange 179 Exercise 10: Maintain Flow Types for FX Transactions 183 Exercise 11: Define Open and Close Position Cash Flows 187 Exercise 12: Create a Foreign Exchange Forward Contract 201 Exercise 13: Define Product and Transaction Types for Derivatives 207 Exercise 14: Assign Flow Types for Derivative Product Types 213 Exercise 15: Assign Condition Types for Derivatives 217 Exercise 16: Define Derivative Open and Close Position Update Types 221 Exercise 17: Create Derivative Transactions 241 Exercise 18: Define a Securities Product Type 253 Exercise 19: Basic Settings for Transaction Management 273 Exercise 20: Create a Security Trade 293 Lesson: Maintaining Derived Flows 297 Lesson: Using the Deal Release Workflow 301 Exercise 21: Implement the Deal Release Workflow 307 Lesson: Defining Position Management 319 Exercise 22: Create a Position Management Procedure 327 Lesson: Valuing Trades 341 Lesson: Defining Derived Business Transactions 347 Lesson: Understanding Interest Accruals 353 Exercise 23: Carry Out Settlement and Interest Accrual 359 Lesson: Configuring Account Determination 371 Exercise 24: Link to Accounting 379 Lesson: Replacing LIBOR 401 Unit 5: Additional Configuration 403 Lesson: Maintaining Company Code Additional Information 407 Lesson: Entering Trade Field Selection 411 Exercise 25: Change Trade Field Status 417 Lesson: Establishing the Cash Management Integration 423 Lesson: Mirroring of Trades vi © Copyright. All rights reserved. 431 Unit 6: Back Office Functions Customizing 432 Lesson: Configuring the Correspondence Monitor 453 Exercise 26: Correspondence Activities 463 Exercise 27: Execute Correspondence 473 Lesson: Using the Payment Program 493 Exercise 28: Execute the Treasury Payment Run 507 Lesson: Using the Trade Repository 513 Unit 7: Hedge Management and Accounting 515 Lesson: Defining Exposure Management 525 Exercise 29: Create Exposure Activity Type and Reference Based Exposure 537 Lesson: Understanding the SAP Hedge Management Solution 576 Lesson: Creating Reference Based Hedging Areas 583 Exercise 30: Create Hedging Classification 585 Exercise 31: Create a Reference-Based Hedging Area 596 Lesson: Customizing Hedge Management Elements 607 Exercise 32: Customize Hedge Management 613 Exercise 33: Update a Reference Based Hedging Area and Create FX Trade 621 Lesson: Understanding FX Options Process and Customizing 629 Lesson: Understanding Hedge Accounting 641 Unit 8: Market Data 642 Lesson: Defining Market Data 655 Exercise 34: Reference Interest Rates and Yield Curves 675 Exercise 35: Define Credit Spreads 687 Lesson: Importing Market Data into SAP 695 Unit 9: Risk Management 696 Lesson: Configuring the Market Risk Analyzer 711 Exercise 36: Define Market Data Settings and Structures 721 Exercise 37: Define the Basic Analyzer Settings 731 Exercise 38: Define Value at Risk 742 Lesson: Credit Risk Analyzer 755 Exercise 39: Activate the Credit Risk Analyzer Integration 773 Exercise 40: Set Up Limit Types and Limits 779 Exercise 41: Set Up the Limit Management Application © Copyright. All rights reserved. vii 789 Unit 10: Commodities 791 Lesson: Understanding Commodities 794 Lesson: Defining Commodities Basic Data 799 Exercise 42: Define Commodity Market Data Elements 805 Lesson: Understanding Derivative Contract Specifications 811 Lesson: Defining Period Determination 814 Lesson: Defining Commodity Trade Types 819 Exercise 43: Define Product and Transaction Type Commodities 825 Exercise 44: Assign Flow Types Commodity Product Types 829 Exercise 45: Define Open and Close Position Commodities 833 Exercise 46: Create a Commodity Transaction viii © Copyright. All rights reserved. Course Overview TARGET AUDIENCE This course is intended for the following audiences: Industry / Business Analyst Consultant © Copyright. All rights reserved. ix x © Copyright. All rights reserved.  UNIT 1 Overview of Financials for SAP S/4HANA Lesson 1 Describing SAP HANA and SAP S/4HANA 3 UNIT OBJECTIVES Describe SAP S/4HANA and SAP Fiori © Copyright. All rights reserved. 1 Unit 1: Overview of Financials for SAP S/4HANA 2 © Copyright. All rights reserved.  Unit 1 Lesson 1 Describing SAP HANA and SAP S/4HANA LESSON OBJECTIVES After completing this lesson, you will be able to: Describe SAP S/4HANA and SAP Fiori SAP S/4HANA Core Products Figure 1: Evolution of SAP Products SAP SE is a software corporation that provides enterprise software applications and support to businesses of all sizes globally. Headquartered in Walldorf, Germany, with subsidiaries around the world, SAP is the largest enterprise software company in the world (as of 2016). It is also the largest software company in Europe and the fourth largest globally, with more than 100,000 customers. Since the beginning of enterprise computing, SAP have been rebuilding the business applications whenever major technology shifts have occurred. Some key moments in SAP’s application development history are the following: 1979 – SAP invents ERP. SAP builds standard business software based on mainframe technology. The name, SAP R/2, supports and integrates major business functions in real time and handles multi-country and multi-currency implementations. (R means real time, and although there was an R/1, this is not regarded as the first major release.) © Copyright. All rights reserved. 3 Unit 1: Overview of Financials for SAP S/4HANA 1992 – With the rise of the personal computer, the introduction of client/server architecture means another rewrite of the applications to exploit the power of a layered, three-tier architecture approach, in which processing is split across three layers: client, application, and database. It is the end of the mono-chromatic, text-based, messy green screens and the start of a new graphical interface to improve the end user experience. This is the birth of SAP R/3. 2004 – Now the Web is firmly established as the common business network and customers demand better integration between their business applications and the Web. SAP develops a new integration application platform called SAP NetWeaver in order to enable this. Now all SAP applications run on a common platform, and customers and partners can build and integrate existing applications easily using widely adopted Web standards, such as service-oriented architecture (SOA). Additionally, a little later, a new switch framework is introduced to allow customers to selectively enable only the new functions developed by SAP in order to avoid disrupting their core processes. The SAP R/3 name is now replaced by SAP ERP. ERP is part of a larger family known as SAP Business Suite, which also contains many other line of business (LOB) applications from SAP, such as SAP CRM. 2015 – A new wave of advances in hardware architecture brings massive computing power at decreasing costs. Huge memory and multi-core processors arrive to offer massive computing power. The underlying design of existing SAP applications was not fully exploiting the power of the new hardware. A rewrite of the complete Business Suite is required. The new business suite is called SAP S/4HANA. Main SAP ERP Core Products Figure 2: Key Aspects of SAP S/4HANA Animation: Key Aspects of SAP S/4HANA For more information on Key Aspects of SAP S/4HANA, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. 4 © Copyright. All rights reserved.  Lesson: Describing SAP HANA and SAP S/4HANA SAP S/4HANA is built on SAP HANA, and so we inherit all the capabilities of this powerful in- memory data management and application platform. This includes advanced text mining, predictive analysis, simulations, and powerful real-time decision support, with access to any type of data in real time. A brand new user experience is delivered to improve the productivity and satisfaction of business users and brings the interface up to a consumer-grade experience optimized for any device. SAP S/4HANA can be deployed on premise or in the cloud or a combination of both to provide flexible consumption options to customers. The data model has been massively simplified. This means we lost unnecessary tables and of course the data in those tables in order to shrink the footprint dramatically and simplify the application design and extensibility. SAP S/4HANA Product Portfolio Figure 4: SAP S/4HANA Product Portfolio Animation: SAP S/4HANA Product Portfolio For more information on SAP S/4HANA Product Portfolio, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. SAP S/4HANA is not a single product, but covers many applications. Customers can start with the basic components and add others later. SAP S/4HANA Enterprise Management is a great place to start. This is known as the “simplified core”. It is helpful to think of SAP S/ 4HANA Enterprise Management as the replacement for SAP ERP. It offers support for all core business processes, such as quotation to cash, procure to pay, and so on. For many customers, this is where their SAP S/4HANA adoption begins. SAP S/4HANA Lines of Business (LoB) solutions seamlessly integrate with the core. There are options that can be added at any time, and provide best-in-class lines of business © Copyright. All rights reserved. 5 Unit 1: Overview of Financials for SAP S/4HANA solutions and connections to SAP business networks. Customers carefully choose the LOB solutions that suit their businesses in order to extend the functionality of the core. In the past, we had multiple add-on applications surrounding the core (for example, SAP CRM and SAP SRM surrounded the core ECC), but with overlapping models and much redundancy. Overlaps and redundancy have been completely removed from SAP S/4HANA. A key point is that SAP S/4HANA is built natively and optimally to run only on the SAP HANA platform. Core Processes within SAP S/4HANA Figure 6: Core Processes Within SAP S/4HANA There are two key layers in the SAP S/4HANA application framework. SAP S/4HANA Enterprise Management SAP S/4HANA Enterprise Management represents the core solution, covering all mission-critical processes of an enterprise. It represents the foundational core solution, natively built on the SAP HANA platform and designed with SAP Fiori UX. For customers who are coming from an existing SAP applications background, Enterprise Management can be loosely compared to SAP ERP. However, SAP S/4HANA is a completely new set of applications. Although there are many similarities to SAP ERP, many of the processes are redesigned, so there is often not a simple one-to-one comparison with traditional transactions. SAP S/4HANA Line of Business SAP S/4HANA Line of Business (LoB) solutions provide much broader and deeper functionality to support organizations in strategic areas, where they want to fully exploit innovative digital applications. LoB solutions can be on premise or in the cloud. The key point is that you extend the core by adding LoB solutions. The overall solution is extended seamlessly. When LoB solutions are added, the business users have the same SAP Fiori-based user experience as before, with the same SAP HANA-based high performance. 6 © Copyright. All rights reserved.  Lesson: Describing SAP HANA and SAP S/4HANA Animation: Core Processes Within SAP S/4HANA For more information on Core Processes Within SAP S/4HANA, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. SAP S/4HANA Enterprise Management is very broad and includes support for key end-to-end business processes, including the following: Procure to pay Plan to product Order to cash Request to service Remember, core HR and core finance are also included in Enterprise Management, rather than only logistics and operations applications. For all these areas, there are additional LoB solutions that can be added to significantly extend the functionality and provide innovation on top of the core. SAP S/4HANA Enterprise Management is the digital core and represents the starting point on which modern, innovative digital applications are implemented and built. SAP ERP is an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment. Evolution of the Finance Application Figure 8: Evolution of the Finance Application © Copyright. All rights reserved. 7 Unit 1: Overview of Financials for SAP S/4HANA Animation: Evolution of the Finance Application For more information on Evolution of the Finance Application, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. Beginning with ECC 5.00, SAP customers had the choice between two different forms of financial accounting: Classic General Ledger Accounting New General Ledger Accounting Both options were part of an SAP ERP running on a traditional database. After introducing the SAP HANA database technology, SAP offered its customers the opportunity to enhance and speed up FI and CO processes not only by using the new and faster database technology but also by using a set of accelerators especially designed for using SAP Financials on an SAP HANA technology. Still classic and new G/L were the two options for SAP’s customers. With SAP S/4HANA and SAP Accounting within SAP S/4HANA Finance, there is only one possibility for general ledger accounting which bases on the functionalities of the former new general ledger accounting. Overview on the Functionality of SAP S/4HANA Finance Figure 10: Overview on the Functionality of SAP S/4HANA Finance 8 © Copyright. All rights reserved.  Lesson: Describing SAP HANA and SAP S/4HANA Animation: Overview on the Functionality of SAP S/4HANA Finance For more information on Overview on the Functionality of SAP S/4HANA Finance, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. SAP provides a fully integrated platform, based on the latest technology trends, to allow finance to lead the transformation to digital business. SAP S/4HANA Finance gives you the ability to centrally track financial accounting data within an international framework of multiple companies, languages, currencies, and charts of accounts. For example, when raw materials move from inventory into manufacturing, the system reduces the quantity in inventory and simultaneously subtracts values for inventory accounts in the balance sheet. The Financial Accounting function complies with international accounting standards, such as United States Generally Accepted Account Principles (US- GAAP) and International Financial Reporting Standards (IFRS). It also fulfills local legal requirements of many countries and fully reflects the legal and accounting changes resulting from European market and currency unification. Key features and functions of Financial Accounting in SAP S/4HANA Finances: General Ledger Accounting Accounts Receivable or Accounts Payable Fixed Assets Banks Fast-Close Functions Financial Statements Parallel Valuation Management Accounting in SAP S/4HANA Finance Management Accounting (Controlling) enables the valuation and recording of financial data, not only for financial reporting, but also as the basis for all cost and revenue-related reporting. As a result, analysts and managers can work with the same basic data as the company’s financial accountants. Because financial data is tightly integrated with the business processes of the logistic processes of SAP S/4HANA and human resources applications, users can also easily obtain detailed information about cost structures and profit margins. Easy access to this data helps support and enable management to achieve business goals, such as increasing revenue, maximizing customer profitability, and reducing operating costs while increasing efficiency, reducing the cost of goods sold, and improving the visibility of inventory. Key features and functions of Management Accounting in SAP S/4HANA Finance: Cost Element Accounting Cost Center Accounting Internal Orders © Copyright. All rights reserved. 9 Unit 1: Overview of Financials for SAP S/4HANA Product Cost Controlling Profitability Analysis Revenue and Cost Planning Budgeting SAP Fiori Scenario You want to ensure that everybody working with the system has the best possible experience when interacting with SAP S/4HANA, and that everybody can access business critical applications on any device without compromises. You need a solution that integrates with your existing IT system landscape and that can expand to cover your specific needs. You want to make sure that SAP Fiori meets these requirements. SAP Fiori User Experience Paradigm Figure 12: SAP Fiori User Experience Paradigm There are five pillars to the SAP Fiori user experiences paradigm: Role-based: Users have access to the applications they need to perform their tasks. The applications are specific to completing this task. Responsive: The application interface is responsive; it adapts to the size and device used by users accessing it. Simple: Simple application scope – one user, one use case, and up to three screens for each application. Coherent: The applications are developed with a coherent structure. All apps speak the same language, and can be implemented in multiple landscapes and environments. Instant value: Instant value through a low adoption barrier, both on the IT-system side and on the user-adoption side. Animation: SAP Fiori User Experience Paradigm For more information on SAP Fiori User Experience Paradigm, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. 10 © Copyright. All rights reserved.  Lesson: Describing SAP HANA and SAP S/4HANA What is SAP Fiori? Figure 14: SAP Fiori Application Types Animation: SAP Fiori Application Types For more information on SAP Fiori Application Types, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. SAP Fiori applications can be classified into different types. Examples include the following: Transactional: These follow an optimal design for fast transaction processing, such as purchase receipt entry. Transactional apps offer task-based access to tasks like change, create, display (documents, master records), or entire processes with guided navigation. Analytical: Provide tools required for analysis, graphs, charts, exploration, data mining, and drilldown. Analytical apps provide insight to action. They give you a visual overview of complex topics for monitoring or tracking purposes. Factsheet: Provide a 360 degree view of all key information related to a business subject. For example, enter an employee name and all information about that employee appears, such as working hours, vacation, pay, performance, manager, and awards. Factsheets give you the opportunity to search and explore your data. They provide a 360 degree view on essential information about an object, and contextual navigation between related objects. This is a good example of the SAP Fiori approach, which is to use a limited number of consistent interfaces to keep things simple. © Copyright. All rights reserved. 11 Unit 1: Overview of Financials for SAP S/4HANA When developers create a new SAP Fiori application, they begin by selecting a template that is based on transactional, analytical, or factsheet, so they have a consistent look and feel. SAP Fiori Launchpad — One Entry Point for the User Figure 16: SAP Fiori Launchpad The SAP Fiori Launchpad is a shell that hosts SAP Fiori apps and provides services, such as navigation, personalization, embedded support, and application configuration. It is the entry point to SAP Fiori apps on mobile and desktop devices. The launchpad displays a home page with tiles, which can display live status indicators, such as the number of open tasks. Each tile represents a business application that the user can launch. The SAP Fiori apps on the home page are arranged in tile groups. The user can personalize the layout of the home page, by grouping, moving, and removing tiles. The user can also add, delete, rename, and reorder groups. The ability to personalize the home page must be enabled in the launchpad configuration. To add tiles to groups, the launchpad provides a tile catalog, which displays all the tiles that are available to a user. 12 © Copyright. All rights reserved.  Lesson: Describing SAP HANA and SAP S/4HANA SAP Fiori Launchpad User Personalization Figure 17: User Personalization Animation: User Personalization For more information on User Personalization, please view the animation in the lesson Describing SAP HANA and SAP S/4HANA, online in the SAP Learning Hub. The following personalization options are available in SAP Fiori Launchpad: Adding applications from the catalog Removing applications that should no longer be used Modifying and adding applications for filtered report results For example, if the user is a group cash manager who is interested in the German market, the user can create an application to take them directly to the cash position of the German market. They can arrive at the cash position directly with one click from the SAP Fiori launchpad home page. LESSON SUMMARY You should now be able to: Describe SAP S/4HANA and SAP Fiori © Copyright. All rights reserved. 13 Unit 1: Overview of Financials for SAP S/4HANA 14 © Copyright. All rights reserved.  Unit 1 Learning Assessment 1. _____ provide essential information about an object, and contextual navigation between related objects. Choose the correct answer. X A Analysis sheet X B Transaction sheet X C Factsheet X D Hedge sheet © Copyright. All rights reserved. 15 Unit 1: Learning Assessment 16 © Copyright. All rights reserved.  UNIT 2 Customizing in Treasury and Risk Management in SAP S/ 4HANA Lesson 1 Understanding the SAP Treasury and Risk Management Solution 19 Lesson 2 Maintaining Business Partner Settings 34 Exercise 1: Create a Business Partner 49 Lesson 3 Defining House Bank Accounts 71 Lesson 4 Defining Securities-Related Master Data 75 Exercise 2: Create a Securities Account 79 Exercise 3: Create Securities Class Data 85 UNIT OBJECTIVES Describe the course goals and objectives Provide a functional overview of SAP Treasury and Risk Management Understand business partners Maintain business partner settings Configure business partner workflows Check business partner settings in the application Define house bank accounts Define securities-related master data © Copyright. All rights reserved. 17 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA 18 © Copyright. All rights reserved.  Unit 2 Lesson 1 Understanding the SAP Treasury and Risk Management Solution LESSON OBJECTIVES After completing this lesson, you will be able to: Describe the course goals and objectives Provide a functional overview of SAP Treasury and Risk Management Course Objectives Figure 19: Course Objectives This course provides insight into how to implement SAP Treasury and Risk Management as part of SAP S/4HANA. You will learn how to execute the most important configuration steps, specifically, the key customizing steps for Transaction Manager, Exposure Management, and the Market and Credit Risk Analyzers. The knowledge of the course S4F50 'Business Processes in SAP Treasury and Risk Management in SAP S/4HANA' or equal knowledge is a mandatory prerequisite. © Copyright. All rights reserved. 19 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Overview of SAP Treasury and Risk Management Figure 20: Overview of Treasury and Risk Management Animation: Overview of Treasury and Risk Management For more information on Overview of Treasury and Risk Management, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. 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. Transaction Manager configuration is extensive when considering the several submodules within Transaction Manager (e.g., Money Market, Foreign Exchange, Securities, Derivatives, Commodities, and Trade Finance). The Transaction Manager modules integrate well into other SAP modules, such as Cash Management and Financial Accounting. Transaction Manager configuration is consistent wherever possible across different trade types. For example, there are basic differences between money market trades and derivative trades. Derivative trades have underlying assets, but money market trades do not. The configuration required for the different trade types is going to be different but is largely going to be driven by the definition of the product and transaction type configuration. Financial Instruments in SAP The core component of the SAP Treasury solution is covering financial instruments. A wide variety of financial instruments is available in SAP: These are divided into the following groups: Money Market transactions for short, mid, and long-term investments and borrowing. 20 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Foreign Exchange transactions for all types of spot and forward transactions, including swaps, plain vanilla options and many exotic options, through to knock-in and knock-out structures and average rate options. Loans cover both bilateral contracts, such as bank loans and syndicated contracts, issuing programs and facilities. Derivatives cover many types of OTC derivatives, such as caps and swaps as well as futures and options dealt on the stock exchange. Securities contain both bonds and stocks, with all types of rights and corporate actions. Active, passive, and lending position can be managed. Different types of Commodities. Matching of long/short future position and margin management. Trade Finance which includes instruments such as letters of credit and bank guarantees. SAP Treasury: Analyzers Transaction Manager covers the management of deals and requirements for the front, middle, and back office, as well as accounting. SAP Treasury provides the following Analyzers. Market Risk Analyzer and Credit Risk Analyzer will be covered in unit 9. Market Risk Analyzer (e.g. NPV, Sensitivity key figures, value at risk) Portfolio Analyzer (calculates the yield on balances, including benchmarking) Credit Risk Analyzer (manages limits and calculates utilization for the front office and risk controlling) Accounting Analyzer (calculation of accounting key figures) Figure 22: Hedge Management Solution The SAP Treasury and Risk Management solution includes the following components: Master Data (House Bank Accounts, Business Partner, Securities Account, Future Account, Security Class) Transaction Manager (Front, Middle, Back Office and Accounting) Market Data Management (e.g. Currency Rates, Yield Curves) © Copyright. All rights reserved. 21 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Risk Management (Market Risk Analyzer, Credit Risk Analyzer, Portfolio Analyzer, Accounting Analyzer) Payment Program Hedge and Exposure Management In addition, there is integration with the Cash Management module, as well as other components in SAP S/4HANA Finance. Transaction Manager provides you with the instruments you require to process the appropriate financial transactions, from entering the relevant data right down to transferring it to Financial Accounting. Both conventional Treasury departments and Asset Management departments are supported with a trading-related focus. This has the advantage that all types of transaction – from short-term financing to strategic long-term investment – can be processed on the same platform. The FX Risk Management process uses the Trading Platform Integration SCP App as the connection between the FX Trading Platform, such as 360T or FXAll, and SAP’s Treasury and Risk Management module. With the use of the Trading Platform Integration app and the functionality delivered in Treasury and Risk Management, companies can have an FX trading process that is very automated and requires little manual interaction. Figure 23: Understanding Key Date Valuations Animation: Understanding Key Date Valuations For more information on Understanding Key Date Valuations, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. Before proceeding, consider the treasury process flow shown here. Throughout the day, payments related to Treasury processing accumulate and will need to be transferred to the banks. Using straight-through processing of payments is best so there is no re-entry of payment details. 22 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Figure 25: Support Throughout the Trade Life Cycle Animation: Support Throughout the Trade Life Cycle For more information on Support Throughout the Trade Life Cycle, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. Entering into financial transactions is a task carried out by most financial departments. Depending on the corporate policy, the emphasis here may be placed on providing an internal service focused on the associated group companies or on actively investing liquid funds, financing planned investments, or hedging existing risks in the financial markets. The transaction management processes are split into the following areas: In the front office department, you create transactions and exercise rights. In the middle office, you validate the transactions, that is, you check the entered transactions and carry out position management-related processes such as securities account transfers. You manage the correspondence (e.g. dealing slip, confirmation, and counter-confirmation) process. Back Office/Accounting covers the accounting treatment of the relevant activities in the subledger and the transfer of the posting information to the SAP General Ledger. At closing, valuation and interest accrued is carried out for each subledger position to the SAP General Ledger. For securities and traded derivatives/commodities, a position management process is defined in addition to the transaction management process. The resulting posting activities are automatically transferred to Financial Accounting. Enter master data (e.g. commodity ID, security class, security account) settings before you can start the transaction management process. For example, before you can map the purchase (or sale) of a security in the system, you first have to enter its relevant structure and condition characteristics as a class. You can use master data as well as transactions and positions to create reports in the information system. © Copyright. All rights reserved. 23 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Treasury and Risk Management Customizing Figure 27: Treasury and Risk Management Customizing Once you understand the processing and configuration for one trade type, it is easy to build on that knowledge to other trade types, such as Foreign Exchange or Derivative trades. Configuration for types of trades across all Transaction Manager submodules requires the following: Define Accounting Codes Assign Accounting Codes to Valuation Areas Definition of Product Type Definition of Transaction Types Definition of Flow Types Definition of Update Types and Assign Usages Set Effects of Update Types on Position Components Derived Business Transactions Account Determination In addition, the valuation class, position management procedure and account assignment reference are required fields for trades across all Transaction Manager submodules. Note: The above list is not an exhaustive list. There are other configuration nodes that are relevant to all Transaction Manager trade types. Said another way, although the settings for each of the above configuration nodes could be different across the different trade types, understanding the structure of the trades and the configuration process for Money Market trades is going to be helpful in understanding how to configure Foreign Exchange or Derivative trades. 24 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Figure 28: Overview of SAP Treasury and Risk Management Animation: Overview of SAP Treasury and Risk Management For more information on Overview of SAP Treasury and Risk Management, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. The process flow shown above references the components covered in this course. Note: The Bank Communication Management (BCM) and In-House Cash (IHC) modules, and the Accounting Analyzer, will not be covered in this course. © Copyright. All rights reserved. 25 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Corporate Treasury: The Strategic Role, Main Tasks and Challenges Figure 30: Corporate Treasury: The Strategic Role and Main Tasks Strategic or tactical Much has been written over the years about the role of treasury. The modern treasury group is strategic, collaborates with the businesses it serves, and is using automation, offshoring and treasury centers of excellence to consolidate and standardize tactical areas. CFO mandates Treasurers clearly have strong mandates to be strategic. More than 70% of respondents noted the following mandates from their CFOs: Liquidity risk management Efficient capital markets access Steward for risk management company Strategic advisor to the business Value-add partner to the CFO in areas such as mergers and acquisitions (M&A) Leading, governing and driving working capital improvement initiatives Enhanced governance and control over domestic and overseas operations Creation of scalable treasury organization to support company growth Animation: Corporate Treasury: The Strategic Role and Main Tasks For more information on Corporate Treasury: The Strategic Role and Main Tasks, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. 26 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Source: survey by Deloitte 2015: Responses were received from the treasury groups of more than 100 top corporations from around the globe, representing a wide array of global scales, industrial footprints, and geographic headquarters. Figure 32: The Strategic Challenges Treasury Organizations Face Key challenges persist Fifty percent of treasurers noted their biggest challenges are the ability to repatriate cash and to manage foreign exchange (FX) volatility. These challenges continue, despite the ongoing trend toward leveraging technology solutions. The primary challenges facing treasury groups today have not yet been resolved with the increased investment in treasury technology, a trend over the past few years. Inadequate systems, FX management, and visibility to global operations continue to be difficult. Most corporate treasury groups rely on multiple ERPs for data sources and use multiple solutions (some manual) to address their company's needs. This may lead to increased operational difficulties and risk rather than providing sufficient solutions to address these challenges. Source: survey by Deloitte 2015 © Copyright. All rights reserved. 27 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Key Drivers SAP Identified: Input for Further Development of the SAP Treasury Solutions and S/4HANA Use Figure 33: Key Drivers SAP Identified: Input for Further Development of the SAP Treasury Solutions and S/ 4HANA Use Figure 34: Treasurers Task Profiles and the SAP Solutions Provided Our training: SAP Treasury and Risk Management. Separate trainings exist for Cash and Liquidity Management, Payments and Bank Communication. TRM: Treasury and Risk Management. 28 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Figure 35: An Integrated Solution: Connectivity and Coordination Strong treasury and cash management are critical needs in times of reduced bank lending and general liquidity challenges. Businesses need cash to operate, and when it can't be procured easily from outside, it must be generated and conserved from within. In addition, today's challenges in treasury and cash management are very different from that several years ago. This all puts significant additional pressure on corporate treasury operations to adapt and evolve. Today more than ever, companies need to better integrate their treasury functions into their overall finance operation, to gain both efficiency, as well as effectiveness. Their older treasury and cash silos can no longer remain stand-alone, but must become more integrated with the cash generating (accounts receivable) and cash depleting (accounts payable) operations of the company, so that every economy can be gained, and every impact to daily cash position can be predicted and understood. Enterprises rightfully expect the treasury function to provide real-time analysis of cash positions and an apparatus to allocate cash to strategic locations and geographies instantaneously, or to procure it if it is needed from the most efficient and lowest-cost source. New standards for financial reporting also require better functions and controls. Treasury managers need analytical and transactional tools to execute trades and hedging transactions that are visible, and comply with accounting standards and that are auditable. In short, much more coordination and visibility is required by today's corporate treasury function across the board, and much tighter integration with operational and enterprise finance and accounting systems. © Copyright. All rights reserved. 29 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Overview Treasury and Risk Management Customizing Figure 36: Overview of Treasury and Risk Management Customizing Animation: Overview of Treasury and Risk Management Customizing For more information on Overview of Treasury and Risk Management Customizing, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. Customizing is entered in a development system and is captured in a transport. A transport request in SAP simply refers to a method by which you can modify customizing, capture the changes, and then move them to other systems, such as a quality assurance system, and then to production. The customizing changes should be tested both in the development system and the quality assurance system before being moved to the production environment. The exact landscape used may vary by customer but typically there is a development, QA, and productive environment. Figure 38: SAP Reference IMG 30 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Animation: SAP Reference IMG For more information on SAP Reference IMG, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. To get to the customizing menu, enter SPRO in the transactions box, then press on the SAP Reference IMG button, as shown above. Following these steps will take the user to the SAP customizing menu. It is from the SAP customizing menu where changes to customizing are made. Figure 40: IMG - Financial Supply Chain Management Animation: IMG - Financial Supply Chain Management For more information on IMG - Financial Supply Chain Management, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. All the Treasury and Risk Management customizing is found on the SAP customizing menu under Financial Supply Chain Management. The Treasury and Risk Management customizing is structured into organized sub-node. For example, the above slide shows where the business partner customizing nodes can be found and where the customizing related to market data management is entered. © Copyright. All rights reserved. 31 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Figure 42: IMG - Transaction Manager Animation: IMG - Transaction Manager For more information on IMG - Transaction Manager, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. The screenshot above shows where the customizing across the Transaction Manager submodules is done, as well as where the customizing nodes for Market Risk Analyzer and Credit Risk Analyzer can be found. Customizing for types of trades across all Transaction Manager sub-modules requires the following: Define Accounting Codes Assign Accounting Codes to Valuation Areas Definition of Product Type Definition of Transaction Types Definition of Flow Types Definition of Update Types and Assign Usages Set Effects of Update Types on Position Components Derived Business Transactions Account Determination In addition, the valuation class, position management procedure and account assignment reference are required fields for trades across all Transaction Manager sub-modules. 32 © Copyright. All rights reserved.  Lesson: Understanding the SAP Treasury and Risk Management Solution Note: The above list is not an exhaustive list. There are other customizing nodes that are relevant to all Transaction Manager trade types. Figure 44: IMG - Money Market Animation: IMG - Money Market For more information on IMG - Money Market, please view the animation in the lesson Understanding the SAP Treasury and Risk Management Solution, online in the SAP Learning Hub. The screenshot above shows the main customizing nodes for Money Market trades. This customizing drives the characteristics of the Money Market trades. The customizing nodes under the Transaction Manager submodules, e.g. Foreign Exchange, Securities, etc., are organized similarly. Understanding the structure of the trades and the customizing process for Money Market trades is going to be helpful in understanding how to configure Foreign Exchange or Derivative trades. Once you understand the processing and customizing for one trade type, it is easy to expand that knowledge to other trade types. LESSON SUMMARY You should now be able to: Describe the course goals and objectives Provide a functional overview of SAP Treasury and Risk Management © Copyright. All rights reserved. 33  Unit 2 Lesson 2 Maintaining Business Partner Settings LESSON OBJECTIVES After completing this lesson, you will be able to: Understand business partners Maintain business partner settings Configure business partner workflows Check business partner settings in the application Business Partner Overview Figure 46: Business Partner Overview Before entering business transactions in the Transaction Manager module, business partner customizing settings must be done and then business partners can be created. In this lesson, the following will be covered: Steps to create business partners Business partner general data Company code dependent settings (also known as standing instructions) Relevant business partner roles (examples: counterparty, issuer, depository bank) One of the first steps in a Transaction Manager implementation is to define on SAP the business partners. 34 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings Figure 47: Treasury Process Review Animation: Treasury Process Review For more information on Treasury Process Review, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. This slide reviews the Treasury trade process flow on SAP. In the front office processing, the traders make decisions of the trades to enter into, then the trades are then created on SAP. As part of middle office processing, the trades are reviewed and approved. Often details of the trades are sent to the counterparties to ensure all trade details are correct. As the trade is created in SAP, it is automatically reflected in the cash position report. Next, as part of back office processing, the trades are posted to the SAP general ledger, and trade cash flows are paid using the Treasury payment program. Figure 49: Business Partner Master Data Activities © Copyright. All rights reserved. 35 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Animation: Business Partner Master Data Activities For more information on Business Partner Master Data Activities, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. A prerequisite to creating trades is to have business partners created and standing instructions set-up, both of which are master data activities. Business Partner Role Concept Figure 51: Overview of the Business Partner Animation: Overview of the Business Partner For more information on Overview of the Business Partner, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. There are two types of business partner master data. The first is the general settings, which apply across all company codes. This includes the name, address, and contact information for the business partner. Next, is the company code specific information, which is referred to as standing instructions on SAP. Within the Treasury and Risk Management, financial transactions are executed by means of the business partner. Typical partners are bank branches or company subsidiaries. You create a master data record for each business partner. The business partner master record holds all relevant information for the business partner on SAP. There are two areas of the maintain business partner master record: 1. General role data is stored centrally for all roles. The data may vary according to the role category and depending on the settings in customizing. 36 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings 2. Company code specific data that only applies for the role in the respective company code. Company code specific settings are part of the standing instructions. Figure 53: Business Partner (General Settings) The general settings apply across all company codes. This includes the basic name, address, and contact information for the business partner. The address settings are relevant for the communication (e.g. Correspondence, Payment). Depending on the correspondence type, the following information is required: E-Mail address Fax number SWIFT code Figure 54: Master Data - Maintaining Business Payment Instructions Animation: Master Data - Maintaining Business Payment Instructions For more information on Master Data - Maintaining Business Payment Instructions, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. The payment transactions, which are the business partner's bank accounts, are part of the business partner general settings. Payment Transactions: Set up the relevant bank settings for this business partner, which you can later use in the payment transactions standing instructions. © Copyright. All rights reserved. 37 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Figure 56: Company Code-Dependent Settings (Standing Instructions) Animation: Company Code-Dependent Settings (Standing Instructions) For more information on Company Code-Dependent Settings (Standing Instructions), please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. The company code-dependent settings are referred to as standing instructions on SAP. The three types of information above for the business partner data are known as standing instructions. They are: Authorizations Which are the financial transactions are allowed with business partner A Payment details For transactions with business partner A, what payments details should be used for a specific type of transaction Derived flows For transactions with business partner A, if flow X occurs in a transaction with BP A, a tax / commission of Y % shall be calculated on it and added to the financial transaction's cash flows. For example, derived flows can also be done to account for withholding taxes. Master Data - Maintaining Business Partner Groups Figure 58: Master Data - Maintaining Business Partner Groups 38 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings Animation: Master Data - Maintaining Business Partner Groups For more information on Master Data - Maintaining Business Partner Groups, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. To create a business partner, from the Maintain Business Partner tile or from transaction code BP, press the create business partner option. Business partners can be created in different BP groups. SAP differentiates between the following groups: Person Organization Group Figure 60: Master Data - Maintaining Business Partner General Settings If you create a new business partner in the system, you need to specify the General Business Partner role, the business partner category and the grouping in the initial screen. The grouping is defined in customizing and is used to classify business partners according to any criteria, to control authorizations, and to assign the number ranges. For example, it is within the customizing of the grouping where the internal number range is specified, as well as if for that grouping, the business partner IDs should be internally generated or externally generated. In the business partner configuration, it is possible to specify the field selection using the Field Groupings configuration, which is found in the IMG menu under Financial Supply Chain Management → Treasury and Risk Management → Basic Functions → SAP Business Partner for Financial Services → General Settings → Business Partner → Basic Settings → Field Groupings. In addition, field selection can be done by SAP client, by BP role, by activity or by business partner type. © Copyright. All rights reserved. 39 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Figure 61: Master Data - Maintaining Business Partner Roles Animation: Master Data - Maintaining Business Partner Roles For more information on Master Data - Maintaining Business Partner Roles, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. Business partners are maintained using the Maintain Business Partner tile. Each business partner must be created as a "General BP" in the first step. In our example, we will only examine the "Counterparty" BP role; other BP roles are controlled in exactly the same way. To get to the standing instructions screens from the Maintain Business Partner tile, change the role to Counterparty, then press the company code button. The standing instruction tabs will then be displayed. By assigning different roles to a business partner, specific functionality can be used for the business partner. For example, after the role of Counterparty is assigned to a business partner, the business partner can be used to create trades in Transaction Manager. To be able to use a business partner in Transaction Manager, the business partner must have the role of Counterparty assigned. Additionally, the following standing instructions should be specified for all business partners that have this role: Payment details, Derived flows (if used), and Authorizations. Note the steps to get to the standing instructions. The business partner role must be set to Counterparty, otherwise the „Company Code" button does not appear. Maintaining the standing instructions can also be done by using the following transaction codes: TBI1 - Payment Details 40 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings TBI6 - Transaction Authorizations TBI7 - Derived Flows Note: The correspondence monitor has been redesigned and replaced by the Correspondence Framework, thus the correspondence tab is no longer available. Figure 63: Master Data - Maintaining Business Partner Payment Details Business partner payment details standing instructions are done so that the correct bank accounts to be used for trades will default into the trades automatically and not need to be manually entered. This saves times and reduces the possibility of manual entry errors. In the payment details area, you specify the company code-specific payment details. Payment details are controlled for each currency and house bank. You can use various different payment details for each transaction type. In order to be able to assign house banks, the house bank accounts must already have been defined. The payer field enables you to specify which of the business partner's payment details are used to settle the payment item. Settlement can also take place via another BP, depending on how payment transactions are to be managed in the company. The payment request specifies whether a payment run is to be carried out for the item. Figure 64: Master Data - Maintaining Business Partner Authorizations © Copyright. All rights reserved. 41 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Animation: Master Data - Maintaining Business Partner Authorizations For more information on Master Data - Maintaining Business Partner Authorizations, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. In the business partner authorization standing instructions, the business user authorizes specific trade types to be entered into with the business partners. Without the business partner authorization standing instructions specified for a business partner and trade type, the trade cannot be entered into SAP. The transaction level authorization standing instructions can be defined down to the product type and transaction type level. Figure 66: Master Data - Maintaining Business Partner Derived Flows Derived Flows standing instructions enable you to automatically generate and calculate certain financial flows that result from other financial flows. One example of how derived flows can be used is to generate withholding tax cash flows in treasury transactions. Derived flows are rules that are assigned by business partner at the company code level. Cash flows will automatically be created in the financial transactions (trades) based on the rule assigned. An example of derived flows is withholding taxes, which are based on rules that apply based on the characteristics of the trade. To set up derived flows, the derivation procedures (calculation rules) must first be maintained in customizing. The derived flows can be assigned at the product and transaction type level. The derived flow standing instructions can be defined down to the product type and transaction type level. How to View the Business Partner Settings Simulation: How to View the Business Partner Settings For more information on How to View the Business Partner Settings, please view the simulation in the lesson Maintaining Business Partner Settings online in the SAP Learning Hub. 42 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings Business Partner Roles Figure 68: Business Example Animation: Business Example For more information on Business Example, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. See on the next slides how to work on the customizing for business partners. Figure 70: Business Partner in Customizing Animation: Business Partner in Customizing For more information on Business Partner in Customizing, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. © Copyright. All rights reserved. 43 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA To get to the customizing area, enter the text SPRO, as shown above, in the transaction code box, then press the SAP Reference IMG button. The user will then be taken to the customizing menu across all areas of SAP. The menu path is Tools → Customizing → IMG → Execute Project. The application side is where business users enter transactions into SAP. Customizing is where IT makes the settings specific to the company's business. Customizing is done as part of the implementation phase of the project, and on an ongoing basis in the case of supporting the business's changes. Figure 72: Define Business Partner Roles Animation: Define Business Partner Roles For more information on Define Business Partner Roles, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. All business partners are automatically assigned the role of "000000 Business Partner (General)" when created. Additional roles are assigned to business partners based on the business situation. For example, the role "TR0153 - Depository Bank" is assigned to business partners that represent a custody or trustee, and the role "TR0151 Counterparty" is to use the business partner as the counterparty of a trade in Transaction Manager. The screenshot above shows the SAP role categories. Each business partner role is assigned a unique identifier. The role categories used in Transaction Manager have a role category that starts with „TR". Changes to business partner roles can be made by following the customizing path: Financial Supply Chain Management → Treasury and Risk Management → Basic Functions → SAP Business Partner for Financial Services → General Settings → Business Partner → Basic Settings → Business Partner Roles 44 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings Figure 74: Define Business Partner Roles Animation: Define Business Partner Roles For more information on Define Business Partner Roles, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. In configuration for each role, it is specified if the business partner can be an organization, person and/or group, which is driven by configuration settings. These configuration settings drive the application side processing allowed for the specific role. For Transaction Manager deals, only the category Organization is required. We differentiate between the following areas when a business partner is created: Organization Person Group This assignment makes it possible to reserve certain roles for use with certain business partner groups only. The assignment takes place in connection with the functions that are to be carried out by this group. Business Partner Types Figure 76: Business Partner Types © Copyright. All rights reserved. 45 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA It may be useful to group business partners. This can be done by using the business partner type field. After defining business partner types, one business partner type can be assigned to each business partner. A common use of business partner type in Transaction Manager implementation is to distinguish external versus internal business partners. In doing this, the above field status settings, could be done by business partner types. One example of different field settings needed for internal versus external business partners is the trading partner field, which should be set as required for internal business partners and suppressed for external business partners. Defining business partner types can be done by following the customizing path Financial Supply Chain Management → Treasury and Risk Management → Basic Functions → SAP BP for FS → General Settings → Business Partner → Basic Settings → Business Partner Types → Define Business Partner Types. After defining the business partner types, the field attributes per BP type is done by following the customizing path Financial Supply Chain Management → Treasury and Risk Management → Basic Functions → SAP BP for FS → General Settings → Business Partner → Basic Settings → Field Groupings → Configure Field Attributes per Business Partner Type. Business Partner Field Modifications Figure 77: Configure Field Attributes per BP Role Animation: Configure Field Attributes per BP Role For more information on Configure Field Attributes per BP Role, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. Using this configuration, field status is assigned to all tabs of the specific business partner role. In the screenshot above, the field status is done by each tab in the business partner master record. Because the field attributes are done in this step by BP role, they impact just the role being configured. Here, you can define for each field in the business partner master record, how the field should be displayed for specific BP roles. Depending on the BP role, you can define various different field settings using this Customizing setting. Field settings can be controlled using the following specifications: 46 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings Suppress/Hide Required entry Optional entry Display only Not specified (SAP default, generally an optional entry) Configuring field attributes per BP role is done by following the customizing path Financial Supply Chain Management → Treasury and Risk Management → Basic Functions → SAP BP for FS → General Settings → Business Partner → Basic Settings → Field Groupings → Configure Field Attributes per BP Role. Business Partner Relationships Figure 79: Business Partner Relationships Animation: Business Partner Relationships For more information on Business Partner Relationships, please view the animation in the lesson Maintaining Business Partner Settings, online in the SAP Learning Hub. Defining relationship types makes it possible to determine and evaluate corporate limits in Credit Risk Analyzer. For example, in total, Citibank Group has a limit of 100 million USD distributed across the individual bank branches. With the relationship button on the application side, relationships between two business partners can be defined. Before a relationship can be created, two business partners need to have been defined. The business partner relationship is key for Credit Risk Analyzer, which will roll-up the exposures across the whole group, for example, the whole bank group. In other words, the credit exposure will be calculated on SAP across all related business partners. © Copyright. All rights reserved. 47 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Figure 81: Business Partner Relationship Categories In this step, the settings for the properties of the business partner relationship categories are made. In business partner relationship maintenance, all the business partner relationship categories are provided for selection in the relationship overview. The most commonly used relationship categories used in Transaction Manager are: FSB002 – Is subsidiary of/Is parent company of BUR001 – Has Contact Person/Is Contact Person for FSB001 – Private Co. with partners If only certain business partner relationship categories should be displayed, select the Hide indicator by the other business partner relationship categories. In selecting this indicator, the relationship category will not be displayed on the application side. The definition of relationship categories is done by following the customizing path Financial Supply Chain Management → Treasury and Risk Management → Basic Functions → SAP Business Partner for Financial Services → General Settings → Business Partner Relationships → Basic Settings → Properties of Business Partner Relationship Categories. Create a Business Partner Simulation: Create a Business Partner For more information on Create a Business Partner, please view the simulation in the lesson Maintaining Business Partner Settings online in the SAP Learning Hub. 48 © Copyright. All rights reserved.  Unit 2 Exercise 1 Create a Business Partner Business Example You want to create a new business partner with whom you can execute financial transactions. To do this, create a new business partner and assign the Counterparty role to your business partner. To create a business partner, select the Maintain Business Partner tile (Treasury – Master Data). As you want to invest in U.S. government T-Bills and bonds, create the U.S. government as a business partner and assign it the Issuer role. Note: In this course, ## is used as a placeholder. When you see ## in an exercise step, replace it with your two-digit group number. There are no dependencies for this exercise. Also, depending on the resolution, some buttons may appear under the “More” option. If the students cannot find a button, it may be behind the “More” option. 1. In future exercises, you will want to conclude transactions in your company code TA## (where ## is your group number, which is shown on the monitor) with business partner BP##. Create the business partner BP## (as an organization). Use the grouping Treasury Partner (external) TR02 (which drives the external number assignment). Maintain the details in the following tables, and then save your business partner: Table 1: Business Partner Data Field Name Value Business Partner BP## (where ## is your PC or group num- ber) Grouping Treasury Partner (external) (TR02) Name any name Table 2: Business Partner Address Details Field Name Value Street, House number Dietmar-Hopp-Allee, 16 Postal Code 69190 City Waldorf © Copyright. All rights reserved. 49 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Field Name Value Country DE (country must be Germany) Note: In the communication information, select the language EN English. Then, to set up the system to check your entries, press the Enter key. 2. Add the Counterparty role to your business partner. 3. Add the details of the registered office (“Germany”) to your business partner in the system using the information in the Legal Address table. Table 3: Legal Address Field Name Value Country DE - Germany 4. Define the payment details for your business partner BP##. Create two payment details (bank account information in EUR and USD) on the payment transactions tab. These payment details are used for EUR and USD payments. These bank accounts are your business partner's bank accounts. Table 4: Bank Details Field Name Value ID First EUR, then USD Country DE - Germany Bank key Select from a list Bank account Individual 5. Create a second business partner BP##A (with the General role), following steps 1-2. 6. Your business partner BP## became a Is subsidiary of business partner BP##A at the start of the month. Note this relationship in the system using the business partner relationships. 7. You want to allow ALL trade types to be made with partner BP##. Assign the appropriate transaction authorizations in the BP after assigning the TR0151 Counterpartyrole to your business partner. (Use your company code TA## to do this). Switch to change mode for the business partner BP## and assign the transaction authorizations through the Counterparty role (Company Code button). Field Name Value Company Code TA## 50 © Copyright. All rights reserved.  Lesson: Maintaining Business Partner Settings 8. Create payment details standing instructions in EUR and USD for your company code TA##, to be used for transactions with business partner BP##. Then assign these details to the corresponding product types. Table 5: Outbound EUR Payments Field Name or Data Type Value Currency EUR Payment details ID EURO_OUT House bank HB001 Account HB001 Payer/payee BP## P bank EUR (or first business partner bank ac- count) Payment request X (select) Payment methods T Table 6: Inbound EUR Payments Field Name or Data Type Value Currency EUR Payment details ID EURO_IN House bank HB001 Account HB001 Table 7: USD Payments Field Name or Data Type Value Currency USD Payment details ID USD_IN_OUT House bank HB001 Account HB001 9. Create the U.S. government as a business partner (GOV##) as an organization, and assign it the Issuer role. Use the grouping Treasury Partner (external) TR02 (which drives the external number assignment) and add the Issuer role. Table 8: Issuer Business Partner Data Field Name Value Business Partner GOV## (where ## is your PC or group number) © Copyright. All rights reserved. 51 Unit 2: Customizing in Treasury and Risk Management in SAP S/4HANA Field Name Value Grouping Treasury Partner (external) (TR02) Name U.S. Government ## Note: You do not need to add any information other than the name of the business partner. 52 © Copyright. All rights reserved.  Unit 2 Solution 1 Create a Business Partner Business Example You want to create a new business partner with whom you can execute financial transactions. To do this, create a new business partner and assign the Counterparty role to your business partner. To create a business partner, select the Maintain Business Partner tile (Treasury – Master Data). As you want to invest in U.S. government T-Bills and bonds, create the U.S. government as a business partner and assign it the Issuer role. Note: In this course, ## is used as a placeholder. When you see ## in an exercise step, replace it with your two-digit group number. There are no dependencies for this exercise. Also, depending on the resolution, some buttons may appear under the “More” option. If the students cannot find a button, it may be be