Oracle Treasury-

An Overview
What, Where, When and How
Angus Ross

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 Overview

Describe and demonstrate the functionality provided by

Oracle Treasury
What is Treasury and Treasury Management
Who would use Oracle Treasury?
Where does Oracle Treasury fit into my ERP?
What instruments does Oracle Treasury Support?
What is involved in a deal?
What are the benefits of Oracle Treasury?

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 Treasury Definition

Treasury is NOT accounting

Treasurers manage the companys cash, deals and risks
their aim is to conduct financial deals to support a companys
operation and add to the companys bottom line
Make short and long term cash forecasts
Deal Management: enter and administer fund and
investment deals
Risk Management: interest rates, foreign exchange and
commodity risks
Policy setting: determine risk policy, limits and exposure

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 Management

Cash Management Deal Management Risk Management

Cash forecasts Borrow Policies, limits
Electronic payments Invest Interest rate
Bank relationships New instruments Foreign exchange
In-house bank Deal capture Insurance
reconciliation

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 Issues Affecting Treasurers

Centralisation of Head Office operations

Facilitated by Internet efficiency
Increased Globalisation of business
Greater complexity of financial instruments
Greater regulation of companies eg FAS 133
Need to reduce funding costs and external financial risk
More efficient deal capture and reporting
Need to make smarter decisions faster

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 What does Gartner Say?

The future of Finance applications is moving

in the direction of "analytics, treasury and
process extension such as corporate services
and verticalization"

Gartner, Accounting 1Q99

Large-Enterprise Magic Quadrant, Feb1999

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 Oracle Treasury Overview

New Release 11i solution

Corporate treasury across industries

Typical treasury functions

Monitor cash flows and exposures
Make funding and investment decisions
Execute transactions in financial markets
Manage lifecycle of deals
Consolidate cash requirements of subsidiaries
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 Where does Oracle Treasury
fit into my ERP?
Bank Current
Statements Rates/ Prices
Currencies &
Oracle GL Accounts
Treasury

Vouchers
Journals
Exposure &
Cash Deals

Oracle Oracle
Oracle
Cash General
Payables Invoices Management Ledger

Receipts

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Receivables
Oracle Integration
Front Office Middle Office Back Office Systems Analysis & Access
Web
HR & Accounts Oracle Financial
Self- Inventory
Payroll Payable
General Analyser
Service
Ledger - Manage Planning Phase
- Financial Accounting - Manage Budgeting Phase
Fixed Accounts - Management Accounting - Review/Approve Budget
Purchasing
Assets Receivables - Budgetary Control - Monitor Budget
Instruments
Bonds (buy & issue)
by Fund, HQ, Resident O
Mission,Currency
Disc Instruments Standard R
Money Markets Reports
Syndicated Loans A
Oracle Cash Mgt
Note Issuance
Options - Cashflow Analysis C
FX - Cash Forecasting
- Cash Budgeting
L
E
Oracle Oracle Oracle Portfolio
Treasury (FO) Treasury (MO) Treasury (BO) Analysis `
R
- Deal Capture Trading Risk Management
- Position Keeping
- Settlements
- Accounting
E
- Market Feeds Capture
- Dealer Support - Limits Management - Confirmations
Standard
Reports
P
Positions - MO Analysis/Reporting - Reconciliation
Limits
O
R
T
Feeds
S
Messages
Confirmations,
Reuters Bank Interfaces, Swift, etc.
Bloomberg
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Oracle Integration
Front Office Middle Office Back Office Systems Analysis & Access
Web
HR & Accounts
Self- Inventory
Payroll Payable
General
Service
Ledger
Control - Financial Accounting
Fixed Accounts - Management Accounting
Purchasing
Instruments
Systems Assets Receivables - Budgetary Control
Bonds (buy & issue)
by Fund, HQ, Resident O O
Mission,Currency
Disc Instruments Standard R R
Money Markets Reports
Syndicated Loans A A
Oracle Cash Mgt
Note Issuance
Options - Cashflow Analysis C C
FX - Cash Forecasting
- Cash Budgeting
L L
E E
System Oracle
Oracle Oracle Portfolio
Treasury (FO) Treasury (MO) Treasury (BO) Analysis `
R `
D
- Deal Capture
Loan
Trading Risk Management
Loan
- Position Keeping
- Settlements
- Accounting
E I
- Market Feeds Capture
Accounting
- Dealer Support Accounting
- Limits Management - Confirmations
Standard
Reports
P S
Positions - MO Analysis/Reporting - Reconciliation
Limits
O C
R O
T V
Structural Risk Management Oracle
Feeds
- Asset/Liability Management
Risk Manager S E
Messages - Rate Risk Management
R
- VaR analysis
Confirmations, - Scenario Analysis
- Stress Testing
E
Reuters Bank Interfaces, Swift, etc. - Market Value Analysis R
Bloomberg - Earnings at Risk Analysis

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 Who would use Oracle Treasury?

Ideally suited for companies with:

Exposure to overseas markets
Multiple banking relationships
Portfolios with complex financial instruments
Need to look at things from an internal control and
asset value rather than on a transaction basis
Why not Cash Management?
Cash Management provides centralised cash
positions and reconciliation
Treasury provides tracking of hedges and investment
positions
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 Key Features of Oracle Treasury

Position Management
Deal Capture
In-house banking
Risk Management- policies and controls
Deal Administration
100% web enabled

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 What instruments does
Oracle Treasury Support?
Supports 2 major deal markets:
Foreign Exchange Money Market
Deals Intercompany funding
Options Term money
Historic Rate Rollovers Negotiable Instruments
Pre-deliveries Derivatives

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 What Deal Transaction Types does
Oracle Treasury Support?

Short term money Interest Rate swaps

Discounted Securities Swaptions
Fixed Income Bond Options
Wholesale term money FX spot, forward, swap
Retail term money FX option
FRA

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 Limits/ Security

Limits monitor and notify when a policy has been exceeded.

There are 8 different limits types:

Global Currency
Counterparty Sovereign
Counterparty Group Dealer
Settlement Time

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 What you can do with
Deals in Treasury
Quick Deals
Deal Orders
Linking Deals
Calculators
Exposure Transactions

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 The Deal Process

1. Enter Deal 6. Cash Flows

2. Send Confirmation Letter 7. Accounting
3. Validation 8. Validation
4. Settlement 9. Revaluations
5. Positions 10. Accruals

Limit checking occurs throughout the process

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 What happens when a deal is entered?

Select User
Deal Exceeds Issues
enters new
Type Tolerance Yes Warning rate

No
Insert deal User
User Saves
dismisses
details Deal warning

Checks deal
Checks Dates details against
monitored
and holidays limits

User
Exceeds Issues
cancels
Checks deal Limits Yes Warning deal
rates against
deal rate No
tolerances User User
confirms accepts
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save
 Reports

There are 43 standard reports in Oracle Treasury. These include:

Cash Flow by account or Currency Maturities by counterparty

Consolidated Cash Flow Maturities by date
FX Deal vs Spot Retail Term money overdue
FX Exposure Intercompany Statements
Interest Rate Exposure Cancelled Transactions
Limit Utilisation Intercompany Interest Settlement Report

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 Future Directions

Revaluation: Our current mark-to-market deal

revaluation will be expanded to all the deal types
included in our system. In addition, the
revaluation process will calculate individual
currency gains and losses associated with your
deals. (FAS 52 accounting entries are handled by
the General Ledger at an account summary
level.)
Risk Management: as described earlier.

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 Future Directions

Equities: A new deal type will be added which

accommodates equity securities.
Accruals: The effective interest method, or constant yield
method, of accruals will be added to the straight line
method as another available option.
Deal Open Interfaces: The ability to upload FX and
Intercompany deal information directly from legacy
systems or third party providers.
FAS 133: Comprehensive support of FAS 133 and IAS
39 Derivative and Hedge Accounting.

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 Reduce Costs & Risk with
In-House Banking

Consolidate cash and FX requirements

Provide intercompany funding
Manage subsidiaries bank account balances

Reduce Exposures and Bank Fees

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 Automate
Back Office Data Entry

Split/net settlements Calculate interest

Authorize settlements accruals
Settle in any currency Amortize premiums
Define journal entry Revalue portfolios
templates

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 Manage Global
Positions and Exposures
Record daily bank account balances
Project cash flows from internal systems
Monitor cash position in any currency
Record funds transfers
Identify available liquidity
Identify and monitor currency and interest rate
exposures
Compare exposures to internal policies
Proactively manage funds and eliminate
undesirable cash positions
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 Control and Secure
Global Treasury Operations
Define exposure limits
Define interest rate and FX policies
Control access for authorized users
Audit business events

Safeguard Treasury Operations

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 Benefits of Oracle Treasury

Companies can improve corporate:

Stability
Continuity
Profitability
Enterprise-wide liquidity, currency & interest rate exposure
management
Streamlined deal capture
Automated deal admin, settlement, reconciliation & accounting
Controlled and secure treasury operations
Reduced exposures and transaction costs
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 Benefits of Oracle Treasury (continued)

Integrated and streamlined corporate dealing

Improved internal controls
Meet international business needs
Satisfies international treasury regulations
Provides information on funding special projects
Provides access to performance and other bonds
Improved credit rating
Improved Investor Relations

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 Benefits of Oracle Treasury (in summary)

Easy and automatic posting to General Ledger reducing GL/

Treasury reconciliation
Enables fund management to eliminate undesirable cash positions
Optimises the Global use of cash
Can make smarter funding decisions faster
Limits and policy enforcement safeguard your treasury operations
fully functional front to back office corporate treasury department
Better capture of information better reporting
100% web enabled to leverage for global treasury operations

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 Conclusion

Global exposure management

Oracle Treasury delivers enterprise-wide foreign
exchange, interest rate, and liquidity exposure
management.

Comprehensive treasury solution

Oracle Treasury is a comprehensive solution,
integrating front, middle, and back office functions.

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