Q

Handling short term financing

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Does the TR-TM Module have any functionality that provides ways to handle short-term financing for foreign trade, such as letters of credit, expenses and commissions that they generate, programming of payments to suppliers abroad or cobranzas to foreign clients and the financial expenses that this management causes?

This is a great question because there are some widely held misconceptions in the SAP user community regarding the functionality available in the TR-TM (Treasury Transaction Management) module that would lead one to believe the answer is no, when in fact, the answer is Yes. The TR-TM module is actually made up of four primary sub-modules, namely:

1. Derivatives

2. Foreign Exchange

3. Securities

4. Money Market

The name of each of these modules pretty clearly identifies the types of financial products and contracts that it is designed to manage, at least this is true for the Derivatives, Foreign Exchange and Securities modules. Unfortunately, the Money Market modules' name is misleading, which has created confusion for users & implementers alike. Many erroneously believe that this module is applicable, as its name falsely implies, only to the management of short-term money market instruments, such as money market funds, commercial paper, CDs, time deposits, etc. It can certainly be used to manage all of these but this module also includes much more robust functionality that makes it possible to efficiently manage a much wider variety of financial contracts and transactions. Not only can it easily handle financial transactions, such as the ones specifically identified in your question, but also almost any other financial contract you can think of (debt or investment) that isn't managed in one of the other three Treasury Modules, including short-, medium- and long-term, notes and bonds, with either fixed or variable rates, loans, repos, annuities, structured settlements, leases (cash flows only), bank facilities. The list could go on and on.


This was first published in June 2003

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