C_S4FTR_1909 – SAP Certified Application Associate Treasury Interview Questions
The C_S4FTR_1909 – SAP Certified Application Associate Treasury certification exam is an entry-level exam for anyone interested in specializing in SAP’s Cash Management and Treasury and Risk Management solution. To successfully pass the SAP (C_S4FTR_1909) interview phase you need to put forward your mastery and knowledge of the fundamental processes, business scenarios, and technical requirements associated with the solution. Moreover, it is greatly recommended that you should know how to apply changes in the software manually if a system failure occurs, how to plan changes, and how to adapt to changes when they occur in the business environment.
Showcasing your competency in front of the panel can sometimes be challenging. By preparing yourself ahead of the SAP (C_S4FTR_1909) interview, you’re surely going to have an edge. So to help you excel in the SAP (C_S4FTR_1909) interview, we have curated a list of top SAP Certified Application Associate: Treasury (C_S4FTR_1909) interview questions. Let’s begin!
1. Can you briefly explain SAP Treasury Management (C_S4FTR_1909)?
SAP TRM provides cash managers with an instant snapshot of liquidity and enables prompt allocation of funds to different divisions and strategic areas within a company. It is an integrated cash management solution that helps treasury managers optimize operations and reduce costs by simplifying their cash flows.
2. What is the importance of treasury management?
Treasury management helps companies maximize their cash liquidity by ensuring that any cash fluctuations do not prevent them from fulfilling their business needs. Treasury management ensures that a company has the cash it needs to fund its day-to-day operations.
3. How would you define Cash Management in treasury?
Cash management refers to a company’s or a group’s active management of its short-term resources. These management activities are designed to sustain the day-to-day business, mobilize cash when needed, and optimize liquidity.
4. Can you explain SAP Cash Management?
SAP’s Financial Supply Chain Management component, a sub-component of SAP FI Cash Management, can be integrated with SAP ERP (Enterprise Resource Planning) or SAP SCM. For example – the liquidity forecast integrates expected incoming and outgoing payments in financial accounting, purchase, and sales.
5. What are the operations of Treasury Management?
Treasury management (or treasury operations) entails managing an organization’s holdings, with the ultimate goal of managing its liquidity and mitigating operational, financial, and reputational risk.
6. Can you explain SAP (C_S4FTR_1909) account management?
Bank Account Management is a solution for cash management and accounting professionals that enables them to centrally manage the master data supporting their bank accounts. This allows them to perform the following tasks: maintaining bank account number, IBAN, and contact person information along with other common account properties, as well as entering bank statement data and generating reports to determine trends in cash flow, overdraft analysis, and more.
7. How does SAP handle bank accounting?
For effective cash-balance management, SAP provides a sub-application in SAP Financial Accounting (FICO or S/4HANA Finance), called Bank Accounting. It allows you to handle both incoming and outgoing payments for efficient cash-balance management.
8. As an SAP Certified Application Associate (C_S4FTR_1909), can you explain bank Communication Management?
SAP Bank Communication Management is a solution that helps you manage multiple bank communication interfaces, connecting to your bank and tracking the entire payment life cycle of a transaction. The solution enables you to improve straight-through processing rates and internal compliance.
9. How does SAP Transaction Manager work?
SAP Transaction Manager serves as the central control for the company’s financial transactions and positions. It handles not only trading and processing, but also payment and posting. SAP Transaction Manager enables you to automate typical processes and exploit the existing potential for rationalization.
10. What purpose does the SAP TRM module serve?
SAP (SAP FSCM-TRM) provides functionality for automating your treasury and working capital management processes.
- Treasury and Cash Management: Analyze, Control, Comply with regulations related to cash transfer and analysis.
- Risk Management: Secure your financial risk profile with seamless integration of your enterprise risk management processes.
11. What are Treasury and Capital Risks?
Treasury risk is the risk associated with an enterprise’s holdings; this can range from money market instruments to equities trading. The liquidity and capital risk associated with an enterprise is the risk of a loss due to the inability or difficulty in the conversion of an asset or security into cash.
12. How would you define SAP FSCM module?
SAP FSCM module provides Treasury and risk management for business and Financial, Banking, Information systems, and Accounting in planning, controlling, and monitoring financial transactions and financial risks. SAP FSCM also provides Biller Direct module, which allows for more efficient Web-based invoicing and payments.
13. Can you explain financial risk management?
Risk management is a process by which an organization identifies, assesses, and controls threats to its capital and earnings from a range of sources, including financial uncertainties, legal liabilities, technology issues, strategic errors, accidents, and natural disasters.
14. How does liquidity risk management work?
Liquidity risk management and asset-liability management are used to ensure a bank maintains the desired net interest margin on its balance sheet, without exposing the institution to undue risks from the interest rate volatility.
15. What is SAP FICO?
The SAP FICO application, and CO (Controlling), can be used to track data from sub-modules such as accounts receivables, accounts payables, asset accounting, general ledger accounting, and bank accounting. These sub-modules integrate in real-time.
16. How does liquidity management work?
Liquidity management verifies the liquidity and cash position of one or more sub-ledgers. Memo records, payment requests, and parked documents can be used to verify liquidity. The cash management operations team and treasury department use this report for their activities.
17. Can you define liquidity items in SAP?
A liquidity item represents the origin or use of cash receipts or expenditures in a company (receipts can be the result of sales or the payment of salaries and expenses). It stands for an expense or revenue.
18. How does the SAP one exposure work?
The One Exposure from Operations hub is a real-time, consolidated storage point for operational data related to managing cash and liquidity. Providing this data in one location facilitates funds planning and risk management across multiple companies.
19. What does the liquidity forecast app do?
Using the Liquidity Forecast app, you can see the expected liquidity of your organization over the next 90 days based on the transaction data from memo records and the One Exposure from the hub. Liquidity Forecast is only visible to certain users in a company (specifically, users in Company Owners, Company Administrators, and Company Members roles). Users in these roles can access Liquidity Forecast for their organization at any time after viewing its definition.
20. What is the purpose of liquidity management?
Liquidity is a measure of a company’s ability to meet its current and future expenses and obligations, such as payments for raw materials and employee salaries. Businesses manage liquidity by collecting cash from customers, retaining cash generated internally, and borrowing cash when the company does not have the resources to pay its expenses.
21. Can you name a few sources of liquidity?
- Cash balances (generally in a bank account)
- Short-term funds.
- Cash flow management.
- Negotiating its debt obligations.
- Liquidating assets.
- Bankruptcy protection and reorganization.
- Free cash flow generation
22. How can you manage liquidity risk?
The liquidity risk of a business can be mitigated by creating and maintaining a balance sheet that can move in a predictable manner by planning financially, forecasting cash flow regularly, monitoring and optimizing net working capital, and managing existing financial facilities.
23. How does SAP Payment Processing work?
Payment Processing checks stub levels based on the entries from General Ledger and Owners Payable sub-ledger. The program determines whether the total amount being paid is complete, whether taxes are to be withheld, and if so, how much.
24. How many stages are there in the SAP payment run?
The Two standard stages in the SAP payment run –
- Entering of Parameters: In this stage, entries are made into company codes, vendor accounts, payment methods, and other accounts.
- Proposal Scheduling: In this stage, the system proposes the list of invoices that are to be paid.
25. How does Dunning work in SAP?
Dunning is a process that enables you to track open invoices and monitor your customers’ payment history. The dunning wizard allows you to send dunning notices to customers with overdue payment items.
26. How does hedge accounting work?
A hedge accounting adjustment is an adjustment to the fair value of a security and its opposing hedge, which is normally recorded in an equity account. The method of accounting is used to reduce the volatility created by repeated adjustments to a financial instrument’s value; it is known as fair value accounting or mark-to-market.
27. Can you explain the working of Hedge Management in SAP?
Hedge Management provides insight into your company’s foreign exchange risk, including a breakdown of the various hedging instruments you have used to mitigate that risk. You can define the level of detail in which you want to monitor your foreign exchange risk.
28. What purpose does SAP exposure management have?
Exposure management brings together the future payments of a company associated with commodity price risk and currency risk. These payments can be actual or planned.
29. What is exposure in foreign exchange?
Foreign exchange exposure is a company’s risk of experiencing adverse currency fluctuations. If proper strategies are not in place to protect cash flow, sudden currency fluctuations can affect profit margins.
30. How is the hedge ratio calculated?
The hedge ratio compares the value of a position in a futures contract to the value of the cash commodity being hedged. The hedge ratio is often calculated by comparing the number of futures contracts purchased or sold to the cash commodity itself.
