User Manual for FSCM

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FSCM Final User manual

Author

Santosh Pandit

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FSCM User manual

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User Manual for FSCM

1.

Introduction................................................................................................. 3

2.

Master data................................................................................................. 3
2.1. Business Partner....................................................................................................... 3
2.1.1.
Creation of Business Partner...............................................................................3
2.1.2.
Extension of Business Partner to Role Counterparty...........................................5
2.1.3.
Extension of Business Partner to Depository Bank / Issuer.................................8

3.

4.

5.

2.2.

Securities Account.................................................................................................... 9

2.3.

Class ID................................................................................................................... 11

Investments in Mutual Funds......................................................................14

3.1.

Purchase of Securities............................................................................................. 14

3.2.

Financial posting of a Securities transaction...........................................................18

3.3.

Posting a Dividend reinvestment............................................................................24

3.4.

Posting a Dividend receipt......................................................................................28

3.5.

Sale of Securities..................................................................................................... 33

3.6.

Reversal of a posted transaction.............................................................................37

3.7.

BDC for Purchase/Sale of Securities........................................................................43

3.8.

BDC for posting Dividends.......................................................................................44

Investments in Fixed Deposits....................................................................45

4.1.

Investing in a Fixed Deposit....................................................................................45

4.2.

Posting an FD transaction into FI.............................................................................53

4.3.

Posting of Interest related entries...........................................................................54

4.4.

Roll-over of an FD.................................................................................................... 55

Investments in Bonds/Debentures...............................................................57
5.1.

Creation of a Class ID for Bonds..............................................................................57

5.2.

Investing in a Bond................................................................................................. 61

5.3.

Calculating/Posting Accrued interest on the Bonds.................................................66

5.4.

Posting of periodic interest on the Bonds................................................................69

5.5.

Sale of Bonds.......................................................................................................... 71

User Manual for FSCM

1.Introduction
2.Master data
2.1.

Business Partner

The business partner is a natural or legal person with whom business relationships
are maintained. Typical business partners are banks, a brokerage house or a central
treasury department with which financial transactions are concluded or a customer
who has several accounts at the bank. BP has many roles such as counterparty,
issuer (for Securities), depository participant (for Securities) etc.
Use
In Treasury, each contract is entered as a transaction with one specific business
partner, which is why the business partner data must exist before the transaction
can be entered. The options available for creating a business partner depend on the
Customizing settings you make here.

2.1.1.

Creation of Business Partner

A Business partner can be a Person, Organisation or a Group. Accordingly, the

relevant icon needs to be selected during the creation of master data.

Specify the grouping under which the number of the Business partner needs to get
generated.

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Enter the relevant details like name, address etc.

Specify the Bank account details and save the entry.

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2.1.2.
Extension of Business Partner to Role
Counterparty
Extending the Business partner in a Counter-party role is essential when a
financial posting needs to be generated for any transaction with them. The BP role
gets selected through the field Change in BP role as shown below:

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Note that once a Counter-party role is selected, the tab for Company code gets
enabled.
Specify the House bank and Account ID through which a payment would normally be
made to the Business partner. This will appear as a default at the transaction level
where it can as well be changed.

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Select on the line item and goto Assignment as shown below:

Assign the bank to the broader category of transactions like Money market,
Securities.

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Specify the Reconciliation account in the tab for Customer account management

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Save the transaction

2.1.3.
Extension of Business Partner to Depository
Bank / Issuer
Depending on the nature of transactions with a business partner, he can also take
the following roles:
Issuer Representing an entity that issues securities

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Depository Bank Bank where a investment is maintained e.g. Depository

participant
The extension is made in the similar way as has been explained above

2.2.

Securities Account

As the name suggests, it is the account in which security positions are held. Each
account needs to be identified with Sec Account type, e.g. AKT (DEMAT account),
PHY (physical).
Positions in one class ID can be held across multiple securities accounts. Similarly,
one security account will have positions with respect to multiple class IDs.
Positions in one class ID can be transferred from one security account to other if
necessary.

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Specify the company code and the ID for the Securities account

Enter the Business partner who has been created in the role of a Depository bank.
The Bank account to which the DEMAT is linked can also be maintained herein.

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The field Sec Account Type can be used to indicate whether the holding is in
dematerialized of physical form.
Any investment made, has to have a reference of the Securities account under
which the securities will be held or managed.

2.3.

Class ID

A Class ID represents the Securities in which investments are made. These could
hence take the form of a Mutual Fund, Shares in companies and Bonds/Debentures.
In Securities, we need to define each script in which we trade as a class ID. They
can be associated with only one asset class (product type) such as equity, mutual
funds, bonds etc. Each Class ID is to be assigned a security classification (e.g.
equity quoted Indian companies, unquoted Indian companies etc).
It is also possible to specify which stock exchange the security is listed on currently.

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The following Product types would be typically used at KNPL:

02A Investment in Mutual Funds (Securities)
51A Investment in Fixed Deposits (Money Market)
04I Investments in Bonds/Debentures (Securities)

Specify the appropriate Security Class that categorizes the investment being made.

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A Business partner in the role of an Issuer needs to be specified as follows

In the Conditions tab, the date when a Dividend is expected to be received needs
to be specified. This information can also be entered later-on whenever the dates
are known.

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Save the entry

3.Investments in Mutual Funds

3.1.

Purchase of Securities

Purchase of Securities is entered with a combination of Class ID and Securities

Account.

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Enter the company code and the Business partner from whom the securities are
being acquired.

Under the Structure tab, the Securities account, valuation class and date of
payment need to be entered.
Further, the Number of Units and the price per unit needs to be specified.

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By default, the House bank and account ID gets copied from the business partner
master data as follows:

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Next, goto, Security transaction Settle contract and Save the entry.

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A transaction number gets generated that initially has a status as Contract which
needs to be changed to Settlement. Note that only a Settled transaction
number can be posted into financial accounting.

Specify the transaction number and save the entry. The status accordingly changes
as shown below:

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3.2.

Financial posting of a Securities transaction

On Settlement of a transaction, no accounting entries are posted. In order to

generate the accounting effect, a separate transaction code needs to be executed
as follows:

Specify the Transaction number, the due date and execute the same.

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The accounting entries that would get posted are displayed in the next screen

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If the same is found correct, the Test run indicator

the final posting done.
An accounting document now gets generated.

can be unchecked and

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The following report can be used to ascertain the total entries made for the
combination of a class ID and Securities account within a company code.

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The average rate as of the report date gets displayed as follows:

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Double click on the line item and the total transactions made until the report date
gets displayed as follows:

3.3.

Posting a Dividend reinvestment

Based on the terms of the MF scheme/offer, a Dividend can be either Reinvested

in the scheme or it can be distributed by the Mutual funds as Income.
In either case, the date when the dividend is expected to be received is indicated in
the class ID as follows:

The Amount indicated above represents the dividend amount declared per unit of
the holding in the fund.

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This will get multiplied with the number of units held as on the due date so as to
arrive at the Dividend amount.
Specify the Class ID and Securities account in transaction code FWZE as follows:

The dividend entries would get reflected as per the respective dates as follows:

Double clicking on the line item will lead to the following screen:

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Since the Dividend is to be Reinvested, select the icon for Capitalize as shown
above.

In the above pop-up, enter the Amount and the number of units that would get
capitalized.

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Save the entry.

The accounting entries get posted as shown herein below:

3.4.

Posting a Dividend receipt

The other scenario for Dividend comprises of its actual receipt as against being
reinvested. In this case as well, the dividend date needs to be entered in the Class
ID.

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Click on the icon of Insert Row to add a new Dividend condition. A pop-up will be
given as follows:

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Specify the dividend date and its rate per unit as shown above.
Next goto, FWZE and enter the Class ID and securities account against which a
dividend is to be received.

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The following screen comes up.

Double click on the same.

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Choose the icon for Payment Details and enter the House bank and account ID in
which the same would be received.

Saving the entry will generate the corresponding accounting document as follows:

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3.5.

Sale of Securities

A sale of securities is also entered through the transaction code TS01 but the
Transaction type to be used would be 200.

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Specify the number of units and price of the same.

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Settle the contract

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A transaction number would be generated which then will be processed through

TBB1 for generating the accounting entries.

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3.6.

Reversal of a posted transaction

A transaction that has been posted earlier can be reversed as follows:

Goto TS02 and specify the transaction number that needs to be reversed.

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Select Reverse from the menu option.

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Specify a reversal reason for the transaction.

The reversal of the financial entries happens through transaction code TPM10 as
follows:

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Enter the transaction number that needs to be reversed.

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Select the line item that is to be reversed and click on Execute

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We would be reversing the Purchase transaction that was passed earlier.

Remove the indicator for Test run and re-execute the transaction.

3.7.

BDC for Purchase/Sale of Securities

At KNPL, a BDC has been developed for uploading the transactions relating to
Purchase/Sale of securities so as to automate the process.
The transaction code to be executed is ZFSCM01.

User Manual for FSCM

Selecting the icon for Purchase/Sale leads to the following screen wherein the file
path needs to be specified. Note that the program can be executed in the
background as well.

3.8.

BDC for posting Dividends

A BDC has also been developed for posting dividends through the same transaction
code.

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Select the option of Dividend and specify the file path for upload.

Note that FWZZ relates to uploading the Dividend dates for the respective class
IDs, whereas FWZE pertains to posting of these dividends on the respective dates.

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The excel formats for the above are as per the attached worksheets

Purchase of
Securities.xls

FWZZ.xls

FWZE upload.xls

4.Investments in Fixed Deposits

4.1.

Investing in a Fixed Deposit

A Fixed deposit is represented by Product type 51A in the system and the
transaction code to be used in this case is TM01

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Specify the transaction type as 100 viz. placing of a FD and enter the relevant
business partner.

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Specify the principal amount, start and maturity date, FD interest percentage and
the frequency of interest payments as shown above.
The respective Tabs in the transactions are accordingly populated as shown below

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Based on the interest rates and frequency of receipts, the Cash Flow tab gets
automatically updated.
If the frequency is changed to Monthly instead of End of term, the cash flow
figures change as shown below:

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Double click on any interest line item to ascertain the manner in which the amount
gets calculated.

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Settle the contract

A transaction number gets generated as follows:

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Save the transaction

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4.2.

Posting an FD transaction into FI

The transaction number as generated above then needs to be processed through

TBB1 for generating the accounting entries.

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4.3.

Posting of Interest related entries

On the respective interest receipt dates, TBB1 again has to be executed for
generating the accounting entries.

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4.4.

Roll-over of an FD

Incase if a FD is renewed at the end of its term, the same can be done as follows:
Goto change mode for the FD transaction number

Goto Fixed term deposit Roll over as shown below:

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Specify the revised maturity date in the field End as shown below:

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5.Investments in Bonds/Debentures
5.1.

Creation of a Class ID for Bonds

Bonds/Debentures are tracked in FSCM within Securities module and the Product
type to be used while creating a class ID is 04I

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The start and end of term for the bonds are specified in the respective fields as
shown above

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In the conditions tab, the date and Interest rate are specified as shown above. The
Calculation date and Due date are to be input the same dates which normally would
be the end date of the Bond.

5.2.

Investing in a Bond

Specify the class ID, transaction type and business partner.

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Specify the Payment amount as shown above as this is the amount of investment
that would get posted to in accounting.

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Settle the contract

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The transaction number generated would then be posted through TBB1

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5.3.
Calculating/Posting Accrued interest on the
Bonds
Normally the interest on bonds would be received at the maturity date, however,
the interest accrued needs to be accounted for on a monthly basis.

Accrued interest can be calculated on the bonds through transaction code TPM44 as
follows

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Specify the ID number as above and execute.

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On un-checking the Test run, the actual accounting entries would get generated.

5.4.

Posting of periodic interest on the Bonds

The final interest receipt against a Bond can be posted through the transaction code
FWZE as follows

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Select the interest line item and double click on the same.

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Fill-in the bank details and post

5.5.

Sale of Bonds

Sale of bonds will be executed through transaction code TS01 with the Transaction
type as 200.

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Settle the contract as follows

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Ensure that the Payment amount is filled-in for the amount of bond matured.

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Posting the transaction will generate the accounting entry.