Treasury Management in SAP has increased leaps and bounds from older versions to the last ERP Central Component 6.0 version. The main advantage of using SAP is that it has integration with virtually every other module. But the case of Treasury is different that firms dealing in treasury are generally isolated i.e. they will have finance and treasury only. They generally don't have other modules like MM or PP. Hence SAP has to be really strong in a niche segment like treasury if it has to be successful as it has with other areas like manufacturing.
Having said this, SAP has really improved a lot and that to with the introduction of its latest offering IS (Industry Specific) Banking solution, it really can expect a lot of activity in this area. To put it in a nutshell, SAP treasury in its latest version has many offerings like postion management, parallel valuation which are some effective tools for effecient treasury management.
Position management is something worthy of discussion. Instead of flow types, SAP has come up with update types. Though flow types continue to exist, it is not going to be long before they will be removed. As of now flow types are used for all primary purposes or mainly front end processes. Buying an option or futures or purchasing a stock are front office transactions for which a flow type exist. But these flow type have to be linked to the update types. But operations like valuation of stocks or exercising an option or the realized gains from Forex are all secondary activities for which update types are directly assigned. Update types are used for updating in finance as well as updating position. Which update type to choose when is a question answered by position management.
But these were already available in earlier versions of SAP. So what is new? The main differentiating factor in this new version is that, Positions can be maintained by various means. In simple terms, by maintaining different valuation areas or parallel valuation area, the concept of maintaining positions based on different accounting concepts or different business needs can be achieved. A seperate article about Parallel valuation area will be written shortly.