You can divide all parties into one of two principle party types: company or counterparty. This section defines each party type and describes the various roles that each party can perform in your treasury operation.
A company is a party that initiates deals and can run an in-house bank. You associate a company with a legal entity and a ledger. When a company conducts a treasury deal or transaction, it generates journal entries.
You set up your treasury department as a company.
If your company has a subsidiary and you want to track the treasury positions of that subsidiary, you can also set up that subsidiary as a company.
You can make deals between your companies. That is, it is possible for your company and your subsidiary treasury departments to make deals with each other. When two companies make a deal, the company that initiates the deal is the company and the other company is the counterparty. For more information, see: Intercompany Funding.
Set up companies in the Company Profiles window. See: Company Profiles.
There are two types of counterparties: internal and external.
An internal counterparty is any party for which your company acts as a bank. The internal counterparty must be owned by the same corporation that owns your company. Typically internal counterparties are subsidiaries of your company that you do not want to track.
You do not associate counterparties with a ledger, therefore internal counterparties do not generate journal entries.
You set up internal counterparties by cross-referencing them to a company. A company and its internal counterparties together form an intercompany group.
Set up internal counterparties in the Counterparty Profiles window.
An external counterparty is any party with which your treasury department makes deals (for example, investment banks, foreign exchange banks, brokerage houses). You must identify external counterparties as foreign exchange counterparties, money market counterparties, or both.
You can define limit controls for an external counterparty. You can also define a counterparty group and define a limit for the group as a whole. For example, if you define a main bank and several of its branch banks as external counterparties, you can group these together in a single counterparty group. To define a counterparty group of these banks, cross-reference each branch bank to the main bank. You can place a limit on each of the branch banks and on the group.
Set up external counterparties in the Counterparty Profiles window. See: Counterparty Profiles.
You set up the banks that your company and its internal counterparties use to handle treasury-related payments as counterparties. You start by defining banks and bank branches in Cash Management. Then you must set up these bank branches as counterparties in Treasury and link them to the bank branches in Cash Management before you can record the bank accounts of your company and its internal counterparties.
Set up banks and bank branches in Cash Management. See: Bank Account Setup, for more information.
Set up banks in the Counterparty Profiles window. See: Counterparty Profiles.
A client is a party that you represent in treasury deals as a broker. A client can be an internal, external or other counterparty.
A risk party is a party that represents a direct liability to a company, but is not a party with which the company conducts deals. For example, if a company bought securities from an investment bank, then the organization that issued the securities would be a risk party.
Set up risk parties in the Counterparty Profiles window. See: Counterparty Profiles.
An advisor is a party that provides legal or accounting services to another party.
Set up advisors in the Counterparty Profiles window. See: Counterparty Profiles.
A valuer is a party that assesses the value of securities that a counterparty gives or guarantees to a company, or that a company gives or guarantees to a counterparty.
Set up valuers in the Counterparty Profiles window. See: Counterparty Profiles.
A third party is a party to which a company makes payments, but with which no deals are made.
Set up third parties in the Counterparty Profiles window. See: Counterparty Profiles.