SAP Consumer and Mortgage Loans, SAP Corporate Mortgage Loans or simply SAP FS-CML (Financial Services Loans Management) are many of the names associated with SAP CML, but what does it really mean or is used for?
SAP CML is a module inside of SAP ECC (ERP Central Component) that is fully integrated in SAP Treasury (FI-CO) and enables companies to manage both simply structured loans such as consumer loans, and complex loans, such as mortgage loans.
The SAP CML module has collateral management functions, decision support, and several options for finalizing contracts. In addition to the management of mortgage loans, the SAP CML module enables the management of consumer loans, employee loans, commercial loans, associated companies’ loans, promissory notes, etc.
For mortgage loans, Loans Management offers functions for mapping the complete loan process for loans given and loans taken, from entering data on a potential contract right through to contract disbursement and the data transfer to SAP Financial Accounting. It incorporates complex collateral management functions, support for decision-making and a range of options for tailoring your contracts.
For consumer loans, you can use the functions to manage the complete loan process for loans given, from entering data for new contracts, making offers, and concluding contracts right through to contract disbursement and the transfer of data to SAP Financial Accounting.
For installment loans, functions are available with which you can create and manage the complete life cycle of loans given, up to the transfer to SAP Financial Accounting.
All the main forms of loan can be represented. Loans Management supports all common loan forms thanks to the high degree of flexibility offered for setting up conditions, flows, collateral, and loan partners.
Loans Management is fully integrated in SAP Treasury, allowing you to measure the effects of loan activities on your liquidity or interest rate risk, positions, and movements directly. Cross-application functions, such as SAP Business Partner Management or the Information System provide you with a comprehensive overview of the business relationships maintained with your loan partner.
According to the needs of the company, loan operations can be subdivided into product classes, which can be used to define specific loan classes or divisions. In turn, you can see the postings that are generated in SAP CML and their transfer to SAP FI for collection with the automatic payment program.
The central management of financial intermediaries facilitates the entry of data such as address, personal data, payment data, accounting accounts, relationships with other business partners, solvency data and tax data among many other records.
The loan master data is the basis for the terms of the contract. Amortization, interest, and expenses are used to generate planned records, necessary for the subsequent treatment of creditors and debtors. You can also define new business panels to define your general conditions for active loans.
In addition, the classification and grouping of each loan, the contract amounts, and the accounting rules are entered as basic data, where the method to be used for the discount accruals is specified.
Once creditworthiness has been calculated, collateral and items assigned, and pledging value found where convenient in asset management, more information can be added before concluding the contract. The contract can be paid in a single payment or in several partial payments.
Basic Principles of Loans Management
Contract conditions form the basis for the contractual relationship. The conditions are used to generate planned records, which are required for processing loan receivables and payables later.
Loans Management uses the status concept to reflect the various stages of the contract process (prospective customer through to conclusion of a contract).
In the loans area SAP Business Partner Management offers functions for assigning business partners to loans in specific roles (for example, main borrower or lender, guarantor, issuer), in this way one business partner can have more than one role.
Furthermore, you can enter details for important real estate objects and other collateral in the system, including guarantees, pledged securities and encumbrances.
The following diagram summarizes the relationships in SAP Loans Management, taking mortgage loan business as an example:
SAP CML is a great solution for a company that wants to manage corporate or distributors loans, for a financial institution or a niche bank that wants to manage all loans products of its customers. It’s been implemented in hundreds of companies and financial institutions around the world, and there are many documented use cases.
For more information, please refer to: https://help.sap.com/viewer/b702af3c511f4e1180d35676494f60e5/LATEST/en-US/a902c753b1081d4be10000000a174cb4.html