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Overview of Oracle Treasury Management

Oracle Treasury is an application that allows companies to manage cash flows, financial deals, and investment-related risks. It provides capabilities for cash flow management, deal management, and risk management. While it does not replace Oracle Cash Management, it integrates with it and allows companies to manage investment portfolios, banking relationships, and cash forecasting. The functionality of Oracle Treasury is very similar between Oracle 11i and R12, with some differences in how bank accounts are managed at the legal entity level in R12.

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75 views3 pages

Overview of Oracle Treasury Management

Oracle Treasury is an application that allows companies to manage cash flows, financial deals, and investment-related risks. It provides capabilities for cash flow management, deal management, and risk management. While it does not replace Oracle Cash Management, it integrates with it and allows companies to manage investment portfolios, banking relationships, and cash forecasting. The functionality of Oracle Treasury is very similar between Oracle 11i and R12, with some differences in how bank accounts are managed at the legal entity level in R12.

Uploaded by

kombrink
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Oracle Treasury is an application that has not gotten as much attention as it

should -compared to the rest of the E-Business Suite. Treasury is an


enterprise application solution that provides you the ability to manage your
cash flows, foreign currency market deals, money market deals, and overall
investment related risks. You can capitalize off banking / broker
relationships and settlement features that allow you to integrate your cash
flow and investment management into the E-Business Suite. The primary
areas are cash management, deal management, and risk management.

Cash Flow Management

Treasury is not designed to replace Oracle Cash Management. That


application still exists and serves the function of cash forecasting, cash
positioning, and bank account reconciliation. Treasury is intended to
manage your investment portfolio including investments and borrowings.
Likewise, it allows you to manage your banking relationships, transactions
between companies and banks, and short term / long term cash
forecasting. In addition, you can use Treasury to manage in-house cash
between companies within the same legal entity.

 Deal Management

You can use Treasury to manage your financial transactions and deals both
short term and long term including investments and borrowings. This
management capability allows your organization to better manage results to
achieve improved overall operation of your treasury management process.
For Deal Management, Treasury allows you to:

 Create portfolios to manage short term and long term deals that are
controlled through deal rate tolerances.
 Create the products you need to relate to the deals you trade in.
Define stocks and bonds.
 Setup your deals and manage them both in terms of risk and record
appropriate journal entries to the General Ledger.
 Create confirmation templates that you can send out deal
confirmations to the trading parties that you control.
 Manage the settlement process with trading parties using EDI and
related technologies.
 Define audit requirements to help manage your internal audit
requirements in the corporate treasury environment.

 Risk Management

Risk Management is an ever increasing part of corporate treasury and cash


management responsibilities; and as such you can use Treasury to drive
policy, risk limits, and risk exposure to interest rates, foreign currency, and
commodities. Treasury allows you to:

 Define interest rate policy along with limit types and limits monitoring.
 Define global limits to create a decentralized ability to share the
responsibility globally for managing your corporate treasury functions.
 Create exposure types and hedging policies to use as another tool in
managing your cash and treasury risk.
 Set limits based on counterparty, counterparty groups, settlements,
sovereign limits, currency limits, and dealer and utilize that all with
workflow.
 Set up brokerage schedules and details to manage your brokerage
accounts and relationships.
 Define market data curves and data sets so that you can use that for
doing deal revaluations and mark to market evaluations to help manage
your treasury risk.

Treasury 11i vs R12

From the perspective of using Treasury in an 11i versus R12 level, there is
very little difference. R12 does utilize the functionality in Cash Management,
where the bank account maintenance takes place in Cash Management. As
part of R12, your internal banks should be setup as parties and that allow
you to further manage your banking relationships.
 

In R12 - the bank account control for Treasury is at a legal entity level. This
is different than the bank account control for Accounts Payables and
Accounts Receivables where the control is at the operating unit level.

 Treasury does not utilize the sub-ledger accounting application functionality


that is prevalent in R12 for the other sub-ledgers like Payables,
Receivables, and Inventory. It does continue to utilize a direct interface to
Oracle GL (without any drilldown functionality).

 The remaining functionality in Treasury is the same from 11i to R12 as it


relates to the primary functionality of the application. So, from an upgrade
standpoint, there isn’t any pre or post upgrade considerations required for
Oracle Treasury.

 A Cool Tool

I hope this quick overview gives you a window into some of the features
and benefits of Oracle Treasury. It is a great tool that truly is under-utilized.
Feel free to reach out to me if you have any questions, or comment below if
you are using Treasury and let me know how it is working for you.

Common questions

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Oracle Treasury integrates with other Oracle applications by connecting to Oracle General Ledger directly for financial entries without drill-down capabilities. It complements Oracle Cash Management by handling the investment and banking relationship aspects, providing a comprehensive cash flow management suite. This integration enhances the synergy of financial operations across Oracle's suite, optimizing overall corporate treasury functionalities .

Oracle Treasury facilitates risk management by allowing users to define interest rate policies, limit types, and limits monitoring. It enables the creation of global limits for decentralized management across corporate treasury functions. Additionally, it provides tools to manage risk exposure through exposure types and hedging policies. Users can set limits based on various factors such as counterparty and currency limits, and utilize these with workflows. Market data curves and data sets are also defined for deal revaluations and mark-to-market evaluations, which aid in managing treasury risk .

Oracle Treasury supports the establishment of hedging strategies through the creation of exposure types and hedging policies. These elements allow organizations to manage liquidity and market risks by setting limits based on factors such as counterparty groups and currency limits. The system enables the management of treasury risk using workflows for policy compliance and optimizing hedging decisions .

Oracle Treasury aids in integrated cash flow management by managing investment portfolios which include investments and borrowings, and providing tools for bank relationship management. While Oracle Cash Management handles cash forecasting and bank account reconciliation, Treasury specializes in short-term and long-term forecasting and managing in-house cash within the same legal entity, allowing companies to leverage both applications to achieve comprehensive cash management objectives .

Oracle Treasury's decentralized limit management capabilities can significantly enhance global corporate treasury functions by distributing the responsibility of limit monitoring and enforcement across various regions or divisions. This enables more responsive and localized financial decision-making and risk monitoring, allowing corporations to adapt quickly to regional market dynamics while maintaining overall corporate risk policy compliance .

Defining market data curves and data sets in Oracle Treasury is significant as it enables the performance of deal revaluations and mark-to-market evaluations. This functionality is crucial for assessing financial positions and risks accurately, aiding in effective decision-making for treasury risk management by incorporating current market conditions into the evaluation processes .

Deal management in Oracle Treasury plays a crucial role in overseeing financial transactions such as investments and borrowings. It enables organizations to better manage financial results, leading to an optimized treasury management process. Treasury allows for portfolio creation, deal setup with risk considerations, and managing the deals through deal rate tolerances. This functionality improves operational efficiency by offering tools for settlement processes and audit requirement definitions, thereby enhancing control over corporate treasury activities .

Oracle Treasury offers structured options for managing brokerage accounts through the setup of brokerage schedules and details. This enables organizations to effectively handle brokerage relationships by systematically organizing brokerage account management within the corporate treasury framework to optimize risk management and deal confirmations .

In Oracle Treasury, version R12 integrates bank account maintenance into Cash Management, where internal banks are set up as parties at a legal entity level. This is distinct from the operating unit level control in Accounts Payables and Receivables. R12 does not implement sub-ledger accounting application functionalities like other sub-ledgers in R12 and relies on a direct interface to Oracle GL without drill-down capabilities. The primary functionality of Oracle Treasury remains consistent between 11i and R12, with no pre or post upgrade considerations .

Oracle Treasury does not utilize the sub-ledger accounting application functionalities that are common in R12 for sub-ledgers like Payables, Receivables, and Inventory. Instead, Treasury continues to use a direct interface to Oracle General Ledger without any drilldown functionality, which indicates a more direct yet less detailed accounting integration compared to the detailed sub-ledger functionalities provided in R12 .

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