Contract management

In the following, “contract management” will primarily be used to describe the credit and investment management of companies.


Does your company have financing or investment needs?


Good liquidity planning shows the need or surplus of liquid funds in good time. The more accurately the incoming and outgoing cash flows are forecast in terms of their amount and timing, the more precisely financing gaps and investment periods can be determined. Through optimised planning, the company gains extra time to explore favourable sources of financing or to compare the returns of different investment offerings.

Financing Needs:


As a rule, internal funding is more favourable than financing through external counterparties. In practice, however, it is often necessary to resort to banks or other capital providers.


Longer-term loans and promissory note loans are agreed with more or less complex repayment terms, while shorter-term money market transactions are used as simply structured time deposits or commercial papers.


In contrast to the easily calculable fixed interest rate agreement, variable interest rates are more difficult to forecast and are therefore converted into fixed cash flows through swaps or otherwise hedged. However, interest rate hedging does not exempt from the ongoing interest rate calculation and valuation of the variable loan. The interest rate is not only linked to a certain reference interest rate, but also depends on the rating of the own company. Financial and non-financial covenants such as ESG criteria influence the price of the funds lent, which becomes even more difficult to plan if it is also staggered in margin grids.

To manage the diverse cash flows and risks arising from financing, a powerful treasury management system is required that provides reliable calculations and planning data for optimal liquidity management. In addition to an up-to-date bank exposure, the monitoring of limits and credit lines is important for the corporate finance managers. They want to know how much financing headroom is still available from a bank or banking group and how the debt ratio of their own company is developing. In addition, the cost of capital, residual terms and, if applicable, valuations according to international standards are of interest.

Market price risks arising from financial transactions are dealt with in the articles on interest rate risk management and foreign exchange management. Information on guarantee management and trade finance can be found by following the links provided.

Flexible evaluations according to types of financing, capital providers and syndicates, investments and projects, currency risks, capital and interest commitments and the desire for simulations resp. scenario analyses as part of comprehensive financial planning quickly overwhelm the possibilities of a spreadsheet that offers neither audit trails nor sufficient drill-down functionalities.

Trinity TMS functions at a glance

  • administration of financial instruments, e.g.
    • Term, Bullet, Instalment, Annuity Loans
    • Commercial Papers
    • Promissory notes
    • Bonds, shares
    • Capital market financing
    • Leasing movables/real estate
  • external and internal financing
  • intercompany funding
  • automatic creation of interest and redemption schedules
  • automatic reflection of all cash flows for liquidity planning
  • fixed/floating interest
  • various interest calculation methods
  • consideration of business day conventions and holiday calendars
  • easy conversion into different currencies
  • reproduction of syndicated loans
  • audit-proof, multi-stage processing workflows
  • portfolio and credit line allocation
  • attachment of documents
  • collateral management
  • a wide range of evaluation options
  • ready-to-use reports
  • maturity radar
  • module for automatic booking process available


Maximum transparency and risk reduction

  • current overview of all financing and cash/capital investments
  • basis for optimised interest rate hedging worldwide
  • flexible pivot analysis for multi-level analyses
  • information about utilisation of credit facilities and limits


Revision security

  • traceability of processing at any time through audit trails
  • historization of business and market data
  • recognised valuation formulas, also taking into account valuation adjustments (credit value adjustments)
  • customised authorisation profiles for users in the front/middle/back office
  • workflows based on predefined rules, dual control principle


Time and cost savings

  • simple recording and management of financial transactions
  • automated creation of interest and redemption schedules
  • automated transfer of cash flows to planning and forecast
  • consideration of (bank) holidays, weekends, business day conventions


Process optimisation

  • mapping of the entire life cycle of financial transactions from planning and conclusion to repayment and interest payment
  • automatic valuation and posting in ERP possible

Investment needs

If liquidity planning shows financial surpluses that cannot be used sensibly in the business itself, the question of money or capital investment arises.


Money market transactions usually have a simple structure and maturities of less than two years. Typical instruments are overnight, call money and time deposits. In some countries, certificates of deposit, commercial papers and medium-term notes are also typical investments. Depending on the term, medium-term notes may count as capital investments.


Long-term financial investments such as bonds, funds and shares are rather unusual in companies, as this would mean that there would be a higher return to be earned on the financial market than in the company's own operations. However, some companies use securities investment to prepare for major investments, takeovers or to secure pensions of their employees. Others manage their own shares or equity investments in other companies.


In addition to the typical liquidity buffer to hedge against unexpected payment defaults, companies thus manage operational and sometimes also strategic financial investments, which can also be subject to default, interest rate or currency risk. In most companies, the forms of investment are therefore limited to a few, usually low-risk instruments.


In any case, cash and capital investments should also be managed in a treasury system, as their payment flows influence daily cash management and ongoing liquidity planning.

Trinity TMS functions at a glance

  • administration of financial investment instruments
    • overnight and term deposits
    • commercial papers
    • bonds, zero bonds
    • shares, fund certificates et al.
  • external and internal counterparties (in-house bank)
  • automatic interest calculation
  • instant reflection of all cash flows in financial plans
  • fixed/floating interest, various interest methods
  • consideration of business day conventions and holiday calendars
  • audit-proof, multi-stage processing workflows
  • portfolio and limit allocation
  • attachment of documents
  • ready-to-use reports
  • maturity radar
  • automatic posting process possible

Best Practice

Especially in times of rising interest rates, it is important for finance managers to keep an eye on current and especially expiring financing. Due to the long period of low interest rates, sensitivity has decreased in many companies, the COVID crisis may have reduced earnings and the number of bank connections was reduced to a minimum in order to save costs. Due to these limitations, the scope for decisions regarding follow-up financing is reduced, which can lead to excessive financing costs, especially under time pressure.


Such situations can be avoided by keeping a professional liquidity and financial planning with appropriate lead time:


A sufficient headway based on complete information not only helps to identify the need for further financing in time, but may also allow to check further alternatives, e.g. by obtaining competing offers.


The same applies to money and capital investments - here, too, early enquiries can lead to improved returns.


A particular advantage of the Trinity TMS is that financing and investment opportunities can also be offered to the own companies within the framework of an in-house bank. Local users report their needs to the head office and usually receive better conditions than with external counterparties. The central financial management keeps track of all receivables and liabilities, can pay interest on them (in line with the market) and refinance externally or temporarily invest the surplus funds.


Trinity TMS generates interest and redemption schedules for all loans and advances, the valuation of variable loans is based on the automatically imported interest rates, and even adjustments (CVA/DVA) can be taken into account, which add the counterparty default risk to the market price risk. For syndicated financing, the Treasury Management System helps to manage the shares in the syndicate.


All cash flows from the financial transactions are immediately reflected in the daily disposition without having to be entered again and are available for numerous evaluations. Scanned agreements can be attached as documents to the financial transaction or generated from the system, e.g. as a framework agreement for intercompany loans. Loans may be assigned to any number of portfolios, ESG criteria and other identifiers can be individually noted and evaluated.


Furthermore it is possible to transfer payment transactions, interest, accruals and also valuations for automatic posting to financial accounting via interface.


Financing, financial investment, loans, promissory note, bond, default risk, interest risk, interest, interest settlement, redemption, annuity, repayment, payment schedule, valuation adjustment, call money, time deposit, commercial papers, shares, securities


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