Principal decrease at rollover

[Former Member]

Hi Experts,

I'm a FICO consultant and I do not know much about TR module but I need to implement offshore loans (transactions with no FI postings) for our users.

Below are the configurations we have done:

Configuration for offshore loans

Financial Supply Chain Management > Treasury and Risk Management > Transaction Manager > Money Market > Transaction Manager.

1. Product type (not required)
2. Transaction types
   • Introduce new transaction type EXT for offshore loan
   • Introduce new number range (to be configured in target system)
3. Flow types – new flow types starting with 8 series, description (no FI); 8203 for bonds, seldom used in our company.
4. Update types – required when there are new flow types introduced; similarly, created new update types MM8*
5. Condition types – 8 series exclude (CP)

However, we encounter errors when we are testing the rollover.

When we try to increase or decrease the principal while doing rollover, the cash flow is generated with and extra line of Final repayment automatically.

(See attached screenshot)

When we rollover for a normal loan transaction (with postings to FI), this dose not happen.

Please advise what is the possible cause of this extra cash flow and how to control the auto generated cash flows of a transaction.

Thank you.

Sei

[Former Member · Accepted solution]

Thanks Renatas, but our company is not using derived flows.

I have found out that if I untick relevant to posting in the flow type definition of money market, the extra cash flow will be generated. But if I tick the option, the flow disappear and everything looks fine.

However, I do not need FI postings for this business scenario and this behavior of SAP is rather strange to me.

I'm going to log to OSS to find out if this is a bug and if there's any note we can apply.

Thanks.

Sei

[former_member566828 · Accepted solution]

Hi Sei,

>> I have found out that if I untick relevant to posting in the flow type definition of money market, the extra cash flow will be generated. But if I tick the option, the flow disappear and everything looks fine.

[Renatas]: could you please specify this node in Customizing?

>> However, I do not need FI postings for this business scenario  [...] I'm going to log to OSS to find out if this is a bug and if there's any note we can apply.

[Renatas]: there are a few methods how you can avoid posting of flows into FI - this is purely standard setup in SAP TRM, so you don't need to create an OSS message:

• you can exclude the whole Product type from posting/ per Company code and Valuation area - SPRO -> TRM -> Transaction Manager -> General Settings -> Accounting -> Link to Other Accounting Components -> Exclude Product Types from Posting;
• or you can exclude specific flows (Update types)/ per Update type and Valuation area - SPRO -> TRM -> Transaction Manager -> General Settings -> Accounting -> Link to Other Accounting Components -> Indicate Update Types as Relevant to Posting.

hope this will help you.

Kind regards,

Renatas

[Former Member · Accepted solution]

The IMG path of the money market flow type configuration is as below:

FSCM -> TRM -> Transaction Manager -> Money Market -> Transaction management -> Flow Types -> Define Flow Types.

• you can exclude the whole Product type from posting/ per Company code and Valuation area - SPRO -> TRM -> Transaction Manager -> General Settings -> Accounting -> Link to Other Accounting Components -> Exclude Product Types from Posting;

-> Our offshore loan is defined at transaction type level not product type level, so I cannot just exclude the whole product type.

• or you can exclude specific flows (Update types)/ per Update type and Valuation area -SPRO -> TRM -> Transaction Manager -> General Settings -> Accounting -> Link to Other Accounting Components -> Indicate Update Types as Relevant to Posting.

-> I can explore on this option later. Thank you for your advice.

Actually, even when I tick "postings to FI", as far as there is no account assignment reference attached to the transaction, TBB1 will not pick up anything to post, and this is our current work around.

And in real business scenario, there will be no account assignment reference for user to key in since posting to FI is not required.

I have already logged the issue to OSS and they are logging on to our system to investigate at the moment, because final repayment should not be generated while roll over is carrying out, no matter what we config. The statistical cash flow is wrong and does not meet the common business requirement.

[jasmine_li · Accepted solution]

Hi,

With your current settings, i.e. with flow types marked as not
postable it cannot work. The problem is that repayment flow will not
be created in appropriate activity if not postable.

To create deals in TRM you don't want to post to FI, you can do it by
controlling update types and not flow types. You can leave flow types as
postable like in standard, but leave update types as not relevant for
posting (Customizing: Indicate Update Types as Relevant to Posting).
Then transactions will be fixed in TRM, but not in FI. That should
fulfill your requirement.

Another option would be to create another offshore PType for each
domestic PType. I think that would also work. But the solution with
update types is better and is recomended.

Best regards,
Jasmine Li

[Former Member · Accepted solution]

Hi Jasmine,

Thank you for your advice and your help from OSS too

We will follow your advice and control at update type level.

Thank you!

Kind regards,

Sei

[former_member566828]

Hi Sei,

one important thing to understand is that in case of roll-over you either increase or decrease the principal amount, you final repayment amount (at maturity) should change automatically, e.g. you borrowed 10 mio THB on 01Jan2014 with maturity date on 01Febr2014, then on 01Febr2014 you decide to roll-over for another month with nominal decrease 1mio THB, so your final repayment amount (if no other changes) should be 9 mio THB.

however, it looks quite strange (both from Process logic and setup), that due to increase or decrease of the principal during rollover, the extra Final repayment flow is is generated automatically - at least I don't get such result on the Demo system I'm using. I guess you need either to re-test your scenario and make sure you execute your steps in the correct order; if this does not work, then you need to check your Customising - probably you should start from Derived flows -> SPRO -> TRM -> Transaction Manager -> Money Market -> Transaction Management -> Flow Types -> Derived Flows - see if any Define Derivation Procedures and Rules generates this 8120 Final repayment flow due to increase or decrease of the principal amount - this is just my assumption.

hope this will help you.

Kind regards,

Renatas