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Purpose
The Loans Management component enables you to manage both simply structured loans
such as consumer loans, and complex loans, such as mortgage loans.
For mortgage loans, Loans Management offers functions for mapping the complete loan
process for loans given and loans taken, from entering data on a potential contract right
through to contract disbursement and the data transfer to Financial Accounting. It
incorporates complex collateral management functions, support for decision-making and
a range of options for tailoring your contracts.
For consumer loans, you can use the functions to manage the complete loan process for
loans given, from entering data for new contracts, making offers, and concluding
contracts right through to contract disbursement and the transfer of data to Financial
Accounting.
For installment loans, functions are available with which you can create and manage the
complete life cycle of loans given, up to the transfer to financial accounting.
All the main forms of loan can be represented. Loans Management supports all common
loan forms thanks to the high degree of flexibility offered for setting up conditions, flows,
collateral and loan partners. Besides traditional loan forms, the system also supports
borrower's note loans, a special form of loan common on the German market.
Integration
Loans Management is fully integrated in SAP Treasury, allowing you to measure the
effects of loan activities on your liquidity or interest rate risk directly. Cross-application
functions, such as SAP Business Partner Management or the Information System provide
you with a comprehensive overview of the business relationships maintained with your
loan partner.
Features
Product Types
The following product categories are available in the system for representing the various
loan forms:
Mortgage loans
Policy loans
Consumer loans
Installment loans
Depending on your companys requirements, you can subdivide your loan transactions
into product types, which you can use to define specific forms of loan or business areas.
You define the product types in the IMG for Loans Management according to your
individual requirements, and assign each product type to a product category and
condition group. These settings apply across all company codes. You can make additional
formulations for consumer loans and installment loans at product level.
Transaction Management
You can enter rudimentary data from prospective customers or concrete inquiries for
specific contract conditions for mortgage loans. The flexible condition structure allows
you represent complex interest and repayment terms. The task of drawing up standard
contracts is supported with predefined new business tables and reference loans. Once
you have calculated the credit standing, assigned collateral and objects, and, where
appropriate, calculated the collateral value, you can add any missing information before
you conclude the contract. You can then disburse the contract fully, or make a number of
You can define products containing specifications for the contract and the
conditions. The loan processor can enter the loan simply and quickly.
You can also determine that a release process is only necessary when the
specifications of the underlying product definition have been breached.
Many of the business operations and functions that you need to execute for a loan
are contained in a single function, such as creating and disbursing a loan, changing
the installment plan or rescinding the loan.
You can also enter a credit life insurance policy as additional collateral for loans from this
product category.
A condensed solution is available in Loans Management for the management of
installment loans.
As for consumer loans, you can define products with attributes specific to
installment loans, containing specifications for the loan contract and conditions. The
loans officer can enter the loan simply and quickly.
You can enter all master data for an installment loan using one function, which
also offers you current information about the status of the loan, such as accrued
interest, payment plan, and account statement.
Position Management
Position Management offers functions for processing existing contracts, such as contract
changes, business operations (such as charges, payoffs, borrower changes for all product
categories, deferral and capitalization of overdue items for consumer loans, or extension
and skip for installment loans) or the automatic generation of rollover offers for mortgage
loans.
Reporting
The information system allows you to monitor deadlines and evaluate positions and
revenues. The business partner information gives you detailed overview of your partner's
loan commitment. You can use the drilldown reporting tool to make use of predefined
standard reports and to generate and edit your own reports.
Loans Management uses the status concept to reflect the various stages of the
contract process (prospective customer through to conclusion of a contract).
In the loans area SAP Business Partner Management offers functions for assigning
business partners to loans in specific roles (for example, main borrower or lender,
guarantor, issuer), in this way one business partner can have more than one role.
Furthermore, you can enter details for important real estate objects and other
collateral in the system, including guarantees, pledged securities and encumbrances.
The following diagram summarizes the relationships in Loans Management, taking
mortgage loan business as an example:
New Business
Purpose
New Business offers functions for processing new loan transactions, from the first contact
with the interested party (loans given), to conclusion of the contract and disbursement.
Before you can create a transaction, you must define your product types and number
ranges. You can opt for internal or external number assignment.
The main types of loan are:
Mortgage loans
General loans
Consumer loans
Installment loans
When you enter new loans, you can represent the following loan statuses:
Status Concept
The status concept enables you to map different processes for the various forms of loan.
You can define corresponding statuses for each product type. This allows you to represent
the exact processing status of your loans in the system.
For example, a mortgage loan or a consumer loan might pass through the
statuses application , contract offerand contract . The transaction activity of a policy loan
can be displayed via the status contract offer and contract, for example. For borrowers
note loans, you can define the statuses reservation, order and contract. The business
transaction of an installment loan can be processed using status Contract only.
In an application you record the requirements of a prospective customer. In offer status,
you can send one or several offers to a prospective customer. When you transfer the loan
to contract status, the loan transaction becomes legally binding for both parties.
You can complete or change the data for an existing loan at a later stage. Status
management also extends to activities such as the withdrawal, or reactivation of a loan.
Note
The status concept does not apply to interested party management. Interested party
management lets you enter basic information about potential customers and their
requirements (such as the capital required) before you enter the actual loan process.
The following diagram illustrates the different ways you can enter a loan transaction in
the system:
Status Transfers
You control the processing sequence for loan transactions by defining status transfers.
They let you define alternatives for the series of processing steps you pass through from
origination through to the contract stage.
In the case of a mortgage loan or a consumer loan, for example, you can enter the loan
as an application, and then make offers to the business partner in contract offer status.
Upon conclusion of the contract, you can convert the corresponding offer into a contract.
Alternatively, you can convert an existing application directly into a contract. You can
also enter a loan transaction as a contract offer and then convert it into a contract, or
enter the transaction as a contract from the start.
By linking the product types to processing activities, you can set up fixed processing
sequences at application level. This helps you to standardize your loan processes and
integrate other organizational factors, such as release requirements.
Prerequisites
You define the corresponding statuses for each product type and company code in
Customizing in the IMG activityCompany Code-Dependent Settings for Product Type . You
also define the status transfers you require here.
Position Management
Purpose
This section contains information on managing your loan positions and covers the
following functions:
Processing contract data for mortgage loans, borrowers note loans, policy loans
and general loans as well as consumer loans and installment loans.
can group several contracts to create one contract or how to split a contract into
several contracts. These functions are supported for loans given and loans taken.
The business operations Extension and Skip are provided for installment loans.
The Rollover function automatically adjusts the conditions for mortgage loans
given at the end of the current fixed period. It also manages and monitors loan
transactions coming up for renewal. The function also allows you to adjust conditions
at any time during the term of the loan.
For mortgage loans taken you need to use the Individual Rollover function.
For the release of loan master data and business transactions the system provides
a scaled release procedure in accordance with the principle of multiple control. For
more information, see Release .
Accounting
Purpose
The following section describes the functions supported for loans accounting and the
interface between contract management and Financial Accounting.
The main Accounting functions are:
Posting evaluations
Release procedure
Scope of Functions
The conditions you enter when creating contracts form the basis for generating planned
records. These include interest payments, principal repayments, and discounts, for
example.
These planned records and additional planned records resulting from other activities
(such as disbursement) form the basis for subsequent postings. Depending on the
character of the loan (loan given, loan taken), the system generates debit or credit
postings.
The generated planned records are posted according to the settings defined in account
determination and transformed into actual records. After posting, you can execute the
functions Generate Payments (SAP payment program) or Incoming Bank Statement for
incoming or outgoing payments (loans given) on the basis of these actual records.
You use the payment program to make disbursements for loans given and to process
direct debit payment transactions.
A distribution function is used for incoming payments for loans given. Depending on the
distribution rules you have defined in Customizing, the system determines the open
items to be cleared, assigns the incoming payments and creates advance payments or
overpayments.
Before you can start using these functions, you must already have made the Customizing
settings at product type level to determine how transactions are to be posted. You can
make postings for loans given either with a customer account , in other words using
the customer subledger, or without a customer account (G/L account level).
You use the Balance Sheet Transfer function if you want to assign a loan to a different
balance sheet account. You enter the balance sheet transfer by changing certain loan
master data (such as the term) and hence the account assignment reference.
You use the Check Deposit functions for entering and processing checks.
You can use the Lockbox Procedure , a faster check processing procedure used
predominantly in the U.S.A., to manage the collection and processing of incoming
payments by way of a lockbox provider.
In order to recognize revenues and expenses in the appropriate accounting period, you
need to carry outaccrual/deferral runs on a specific key date. You can also run
accruals/deferrals for loan discounts/premiums in mortgage loans using the difference
procedure. You access the corresponding functions by choosingAccrual/Deferral.
You use the Valuation function to value loans denominated in foreign currencies on a
specific key date. You can simulate the valuation run before you start the actual update
run.
The Reversal function lets you reverse postings (such as disbursements, debit positions,
incoming payments) made for a specific loan in a given company code. You can also
reverse returned debit memos and accrual/deferral runs.
The Accounting Evaluations section gives you an overview of all your posting activities.
You can also evaluate the reconciliation between the FI general ledger and subledger for
a specified reporting period.
By making corresponding settings in Customizing, you can include several accounting
activities in the release procedure (such as reversal and payment postprocessing). In
each case, you can specify if the release procedure should be active, and how many
employees are required to release the object (two, three, or four). For more information,
see Release .
Purpose
Note
With the exception of the collateral data and the filed documents function, the master
data is not relevant for loans based on the product category Consumer Loan (340).
The master data functions are also not relevant for loans based on the product
category Installment Loan(360).
Object Management
Within object management, you can create, change and display an object. The
objects managed in the master data are real estate collateral objects.
You can create an object as part of a loan transaction (when you enter the contract
data) or independently of an actual transaction.
When referring to the land register use the Real Estate Business Partner , otherwise
use the SAP Business Partner . For more information, see Converting the Business
Partner .
Collateral
In collateral management you create, change and display your collateral. This
includes assignments of life insurance policies, mortgages and savings, as well as
securities pledges.
Note
If you have activated the Collateral Management System in the IMG activity Define
Installation Parameters , the functions for object management, collateral value
calculation and collateral management are locked. Instead, you can use the CMS
Collateral tab page in the contract screen and by choosing the Collateral Management
System button you can navigate directly to CMS for further processing.
The integration with the Collateral Management System is not available for loans
based on the product category Consumer Loan (340). Even if you have activated
the Collateral Management System , in theAttachments section of the Contract tab
page in the Change Consumer Loan function you can use the Loans
Management collateral functions and not those from CMS.
Filed Documents
The supporting documents required from the borrower to process a loan are recorded
under filed documents.
Current Settings
Purpose
The Current Settings include the functions you use to make settings that would usually
be made in Customizing. The following functions are found in the SAP Easy Access screen
however and not in the IMG for Loans Management . This is because you need to access
them when the system is in operation after the implementation project has been
completed.
Features
Functions for loans based on the product category Consumer Loan (340):
o
Change Contract Interface , in othe r words, adjust the user interface for
the Ed it Consumer Loanfunction.
o
Setting up Products and Conditions .
Functions for loans based on the product category Installment Loan (360):
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Setting up Products and Conditions .
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Field Selection Control . Th ese functions allow you to determine the
properties of screen elements.
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Managing Stops
Environment
Purpose
The Environment section comprises interfaces from Loans Management to other areas of
this SAP system, other SAP systems, and external systems. The other areas are described
in separate units:
Note
You cannot use this function for loans that are based on the following product
categories:
o
Consumer Loan (340)
o
Installment Loan (360)
Market Data
Tasks
The credit analyst is in direct contact with the business partner in the phase leading up to
conclusion of the contract. This person analyzes/reviews the prospective loan
transactions with regard to the business partner's credit standing and the value of the
collateral available to secure the loan. On the basis of this analysis, he or she makes a
decision on the loan. The credit analyst can make use of the limit management functions
to ensure that risk directives are observed.
Activities in Loans Management
This role involves the following activities:
Editing objects/collateral
Decision-making
Changing limits
Loans Officer
Technical name: SAP_CML_LOANS_OFFICER
Tasks
The loans officer maintains direct contact with the customer throughout the term of the
loan. This person is responsible for processing the loan at all stages - from the
application/offer to the contract, and then on through to repayment.
The loans officer manages the current contract and business partner data. This involves
monitoring whether the prerequisites for the contract have been fulfilled, and then
triggering contract disbursement when the conditions have been satisfied.
Decision-making
Creation of offers
Contract creation/rollover
Entry of disbursements
Correspondence processing
Processing charges, single postings, payoffs, capital transfers, waivers and writeoffs in the Workplace for Business Operations
Rollover Officer
Technical name: SAP_CML_ROLLOVER_OFFICER
Tasks
The rollover officer is responsible for extending contracts with new or adjusted
conditions. This person checks the loan position, defines possible conditions for new fixed
periods and triggers the necessary processing steps.
Activities in Loans Management
This role involves the following activities:
Process rollovers
Generate correspondence
Tasks
The staff accountant for loans enters and monitors the payment flows resulting from
loans transactions. This person carries out all the necessary postings, accruals/deferrals
and valuations, and checks the posting activities.
Transaction postings
Clearing
Creating payments
Processing capital transfers, waivers and write-offs in the Workplace for Business
Operations
Reversal
Accrual/deferral
Valuation
Account clearing
Value adjustment
Tasks
The manager of the loans department is responsible for managing and releasing
(approving) loan positions, as well as for reporting activities for loans. The limit
management functions allow the loans manager to monitor the extent to which risk
guidelines have been adhered to.
Release
Changing limits
Risk analysis
Product Administrator
Technical name:SAP_CML_PRODUCT_ADMIN
Tasks
The product manager enters and monitors the product data used as the basis for creating
loans. This person makes all of the necessary changes to the product data. These
changes may be required due to external factors, such as interest rate increases and
decreases, or internal factors, such as the repositioning of products for marketing
reasons.
Technical Administrator
Technical name:SAP_CML_TECHNICAL_ADMIN
Tasks
The technical manager provides technical support as required. This person runs all
reports that need to be executed on a regular basis or schedules the corresponding
background jobs. The technical administrator also executes the reports and queries
within the reporting functions available in Loans Management .
Filling files
Executing the mass print run with the correspondence tool
Setting status planned completed
Posting planned records
Currency conversion
Entering reference interest rates and currency rates
Reorganization and data archiving
Creating and executing queries, drilldown forms and drilldown reports.
Fixing performance parameters
Preparing and executing the external data transfer
Analyzing change pointers
Defining export interfaces
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