How to use TRADE
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How to use TRADE
When TRADE is activated you can initiate the general trading activities of Tolling, Expediting, Group Traffic, Product Mixing, Reporting or enter the trade maintenance procedure. To view or amend an existing contract or part contract the contract number must be entered The contract number can be system generated or assigned by the user. To locate existing contracts the ^F command may be used for a simple list or the <find> button can be employed to activate the standard full enquiry procedure. Once retrieved the ITAS privilege of the user and the status of the contract will dictate what TRADE features are available.
To create a new contract the contract number prompt should be left blank if a system generated number is required or the user should enter a unique number. The numbers are in the format ######.### where # is any digit from 0 - 9. If the suffix is left blank '.000' will be appended to the main contract number. A single contract can be split into 17,000+ allocations/tranches, if needed. Rarely will a contract exceed 20/30 splits but it would be very useful for SPOT sales where small non-contractual deliveries need to be recorded.
All the features may be operated through mouse activity or by using the buttons
View Contract Details
Two modes exist for viewing a contract. The Summary mode <find> button, presents a simple listing of all parts of the contract, one line per part. There is a default style but columns may be moved, removed and inserted to change the layout of the listing. The detailed presentation, mouse right-click, displays full information about the current contract split. Both displays may be printed, saved to disk or viewed at the screen and then discarded. You can drill-down to maintain any part of the contract from summary viewing/find.
Image Contract
The 'Image' feature provides a quick method of entering similar contracts. The contract that is to provide the basis for the new contract(s) must be recalled to the screen. It is possible to create an complete new contract with all the parts of the source contract being imaged. You can also create and allocate a new contract. When the Image request has been made, the number of new contracts to create must be entered; the number for the first new contract can be entered if system generated contract numbers are not required. If estimates of cost, commission details or commodity options are present on the basis contract they may also be copied. Purchases or sales may be created and many individual fields may be overtyped with new values e.g. quantity, packing units, Contract /Payment terms, .
Delete Contract
If a contract is created in error it may be deleted. If a contract is cancelled or declared void it should be closed to provide an audit of the contract. A contract or contract split may only be deleted if the quantity has been set to zero and there are no dependent splits for this part of the contract for price fixing details. Once deletion has been confirmed all cost estimates, commission details, commodity options and price fixes associated with the contract split will also be deleted.
To perform the deletion the contract to be deleted should be the current one being maintained. The Delete option should then be selected.
Create Tranches or Multi-Contracts
Tranches are parts of a contract that are separated by delivery period. A contract may be created to span several months and each month has a set quantity to be shipped/delivered. To enable period tranches to be maintained discretely the contract is partitioned in to its period parts. Multi-Contracts are similar to tranches. The difference being that a series of new contracts are created from the original, each one representing a single delivery period. The tranche definition is loose and a contract may be segmented for other reasons such as different commodity grade or different pricing details.
To perform this activity the multi-period contract is recalled to the screen and the 'Tranche' option is selected. As each new tranche/contract is created the delivery, commodity and pricing details may be amended. To create contracts instead of tranches the appropriate box should be ticked.
Create Contract
Part of the contract may be split for many reasons. It may be to satisfy a delivery or to put into warehouse or to allocate to another contract or client. A contract split can be split in to smaller parts. Any allocation will be split in the same proportion. Any cost estimates, commission details and invoicing will be amended to reflect the activity.
To split the contract or contract part it must be the current one being maintained. Having selected the '' option the quantity and packing should be entered. These values will be taken from the original contract and placed on the new split. The new split will have the same contract number as the original but the suffix will be one higher that the current highest suffix on the contract. The highest split number is ZZZ. Once this code is reached, a new contract must be set up after 17,000+ splits.
Create Call-Off/Fixing/Deliveries
Merchant/Distribution operations need to create 'Call-Offs' to handle the deliveries to/from stock. The call-off will require additional information such as quantity, call-off date and product (applies Options and their prices as selectable), transport information such as haulage rate, delivery zone and vehicle registration, extra information such as depot/terminal from where the stocks are to be taken. Each new call-off will be assigned a unique release/trip number which is system generated. Delivery Notes (DOCDES) and their XML equivalent can be optionally created. Call-offs are eventually marked as delivered and Sales can then be invoiced once final weights (may be loaded or customer weights) are known. Call-offs may be transmitted to third party automatic pumping and weighbridge systems and the loading details returned and incorporated into ITAS. Alternatively the loading details can be entered manually.
Select the contract and action the 'Call-Off' option, the quantity, product and transportation details can be entered. The call-off will take the form of a new contract split. A maximum of 17,000+ call-offs may be created from one contract.
Merge Contract Splits
Splits can merged to create a single new split, can be merged on to an existing selected split or merged on to the contract head. Merging may take place if a split has been created erroneously, different splits are required to satisfy a single allocation or several splits are to be grouped due to common characteristics. Allocated splits may not be merged as the link to the allocation would be lost.
To merge splits the contract must be maintained in TRADE. Once the merge options is selected all the contract splits will be presented. The unallocated splits may be selected for merging. The user can then indicate if the splits are to merged back on to the head of contract (.000 suffix), the original split entered in TRADE, the first selected split on the grid or whether a new split, equal in quantity to the sum of the selected splits, is to be created.
Allocation and Deallocation
Allocation takes place for a number of reasons. Allocation can be used to remove items from position lists. With back to back contracts a purchase may be allocated to a sale. With merchanting contracts a delivery may be allocated to a customer tank or blend reference and an intake may be allocated to a stock tank. Where many purchases are shipped to satisfy many sales the purchases and sales may be allocated to a charter reference or vessel name. Allocation can be between a raw purchase and the refined purchase that was the result of processing. In this situation the refined purchase is available for allocation to a sale. Preallocation can be used when the buyer of goods is known but the sale contract has yet to be finalised. Deallocation is the breaking of the allocation.
To allocate the unallocated contract must be retrieved. Having selected the 'Allocate' option the allocation form will be presented with summarised details about the contract. The user must indicate whether the allocation is against a physical contract of the opposite sign or a 'WIP' account (e.g. vessel, charter). Once this has been determined the quantity and packing should be entered and how inequalities of quantity are to be treated. Contracts can be split so that equal quantities are allocated together or unequal contracts may be allocated. Raw and refined contracts are allocated through the 'refine' process.
Maintain and View Deliveries
Deliveries can be made from sale contracts. This is a useful tracking tool if a sale is allocated and invoiced and needs to be delivered to the customer in smaller parcels than invoiced. The details that can be maintained are reference, release date, document reference, packing units and amount, weight units and amount.
To enter delivery details the appropriate sale contract should be re-called in TRADE. The 'Deliver' options should be selected and summarised contract details and existing delivery details will be presented. The delivery details may be created, amended or deleted.
Processing and Re-grading
A purchase may be processed or regraded into different products. This procedure will incur a process cost which is added to the out-turn splits as a miscellaneous cost estimate. The cost and value of the out-turn products will need to be amended to reflect the processing and any loss in weight. A right-off quantity can be entered.
To process a contract the contract must be re-called in TRADE. The quantity and packing to process are entered and the out-turn products, quantities and new price are inserted. Each one of these will create a new contract split. A processing date and cost are added to the out-turn splits and the write-off quantity from the original contract can be updated. The quantity remaining on the original contract will be the original contract less the processed quantity less the written-off quantity.
Calculate Administration Value
Some companies may be operating automatic cost calculations. Each time the status of the contract changes costs incurred as a result of the change will be created and added to or subtracted from the contracts administration value. The costs are calculated based on cost tables as set up in ITAS menu option CALCCODES.
Example FOB purchase, traffic mark as afloat from to , the calculation subsystem locates relevant freight rate from CALCCODES table and updates administration value, will also locate insurance rate etc and update accordingly. When traffic mark the goods as landed and placed in storage, the calculation subsystem will again activate to locate tables and update. The purpose of the admin value is to provide a management view of current P+L when matched with either market price or allocated sale admin value.
The 'Calculate Administration Value' feature deletes all previous cost calculations and recalculates all contract costs based on the current status of the contract. From these costs the new administration value can be determined. The Administration Value is visible on the 'Financial' tab of the main TRADE screen.
Manual Invoice Marking
Purchases and Sales can be marked as invoiced. This removes them from open position reporting. Invoicing can be performed automatically whereby the contract drives the invoice, through document entry where the invoice is entered in DOCENT and the contract is marked or manually when the invoice details are manually entered on to the contract and no checking is carried out.
To manually mark the contract with invoice details the contract should be called up and the 'Invoice Marking' selected. A form will be presented showing a summary of the contract details and any invoicing that has already been carried out (automatically, through DOCENT or manually). These details may be added to, amended or deleted. The details maintained are invoice reference, date, packing quantity and weight. The 'main' invoice should be entered for reporting purposes.
Add Tonnage
There is a process to handle the intake of a delivery to a Purchase Spot contract. A record of the intake is kept available for removal, if sufficient tonnage remains on TRADE record. The weight and number of pack units is applied to the TRADE record, ready for allocation.
Documents and Forms Creation
Different documents may be required to support a contract e.g. Contract Advice, Business Confirmation, Shipping Notification, Insurance Declaration. These may be created from TRADE based on Templates maintained in DOCDES. The documents produced may be saved and reprocessed in DOCMAN.
To create the documents retrieve the appropriate contract in TRADE. The 'Create Forms' option should be selected and a list of templates will be presented to enable the user to choose the required style. The document will be displayed in 'Word' based on the style and content of the contract and may be edited, printed and saved. Hivedome have developed many DOCDES rules and are structured to develop new ideas proposed by their customers.
The feature 'Business Confirmation' is executed from TRADE/right-click/Docs/Business Confirmation. The procedure requires a specific DOCDES/Template to be nominated with 'Auto Conf' configured. The nomination is completed in DOCDES/Contract Advices Folder whereby click on [nominations] opens a grid for the data specification (see the grid help? for more detail). Additionally the nomination of auto email addressing is executed in S01/View/Maintain Email Addresses (see its help?)
The feature 'Business Confirmation' is executed from TRADE/right-click/Docs/Business Confirmation. The procedure requires a specific DOCDES/Template to be nominated with 'Auto Conf' configured. The nomination is completed in DOCDES/Contract Advices Folder whereby click on [nominations] opens a grid for the data specification (see the grid help? for more detail). Additionally the nomination of auto email addressing is executed in S01/View/Maintain Email Addresses (see its help?)
Insurance Certificates
When traffic details have been entered e.g. BL ref, date an individual Insurance Certificate/declaration can be produced using a previously maintained template from DOCDES . Provisional/Final Certs can be produced using the entered cover amount. The forms are kept (DOCMAN) and are printed/email and the insured amount becomes a valuable piece of management information for future analysis. There are alternative methods for IDS where only need to mark the tonnage with a Insurance Group(Premium) code and produce a simple declaration report at month-end.
Refining of a Contract
Refining is the process of linking a TRADE refined tonnage to its’ raw product contracts. In this process there may be loss in weight and write-off of by-products. The yield percentage will be applied on the total of the raw contracts to suggest the quantity of the refined out-turn.
To enter the details for a refined contract the refined contract must be maintained in TRADE. Once the 'Refine' option has been selected a form will be presented showing summarised details about the refined contract. The 'Raw' origin should be entered and all the open contracts matching the TRADE ORIGIN will be displayed in a grid for selection. The quantity from each in-turn contract is entered and the yield is applied to give a total out-turn quantity. If only part of the in-turn contract is used, the user will specify how the residual tonnage is treated. It may be written off, used to create a new split or left as part of the main contract. Similarly if the total out-turn does not equal the quantity on the refined contract a new split may be created, the refined quantity may be reduced or left as it is. The raw purchases will be allocated to the refined contract. See TRADE/Process for an alternative method of associating in-turns with existing out-turn.
Traffic Maintenance
Traffic maintenance enables the maintenance of shipping, warehouse and call-off details. The status of the contract or contract part may be updated to reflect its new situation e.g. moved from Afloat to Landed. Shipping details covers items like the ports of destination and origin, Bill of Lading date, ETA, vessel name. Warehouse details can be entered for the warehouse name and location, warrant ID and storage costs. Call-off details relate to the status of the merchanting delivery with regard to product, quantity, terminal/depot and transport details.
To maintain traffic details the required contract/contract split should be retrieved in TRADE and the 'Edit Traffic' option selected.
Price Fixing (On-call) Maintenance
Contracts may be created to be priced against a F&O market plus or minus a differential. The pricing may be carried out against one part of the contract but the resultant contract price is applicable to other parts of the contract. In this situation the splits of the contract will belong to a single fixing family. The family is the suffix of the splits against which the pricing will take place. The pricing details (e.g. lots, market, prompt month) will be maintained against all the parts of the fixing family but may only be amended via the head of the fixing family. Once the contract is fully fixed a flat price will be applied although the link to the price fixes will not be lost.
To enter price fixes the head of the price fixing contract must be maintained. Select the 'Price Fix' option and a form showing the fixing carried out so far will be presented. These details may be amended, deleted or new fixes may be entered. The contract price based on fixing completed so far, the closing price of the terminal market from the previous working day and the discount or premium will be displayed. Once all the lots are fixed the final contract price is calculated, may be amended and will update the whole of the fixing family. Price fixes can also be created from ITAS Menu Option TERM which is used to enter the Futures and Options Trades. For each price fix the date, price and number of lots is entered. Buy-backs, rolls, switches etc can be entered and the important element in the successful maintenance of these trades is the use of the TERM CODE.
Hedge trades can be entered in TERM, with their applicable TERM CODE. These are viewed in the Financial calculation and in the right-click feature of F&O/View. The F&O right-click will also allow creation of hedge trades, if the applicable controls have been activated. These trades are standard ITAS internals whereby the other side is the default F&O department code (SSU nomination).
Inter-Company TRADE
Definition of Inter-Company trading is one company sells/buys with one of it’s group companies. Definition of Intra-Company trading is a department/business sector in a company sells/buys with another department/business sector in the same company. ITAS handles intra-company trading with the setup in TRADE of a fully linked Internal trade.
Inter company TRADE can be setup automatically, if a database contains the ITAS database for the other company. In TRADE when you have recalled any complete buy or sell (i.e. no existing splits), the option (mouse right-click) of Inter-Company will appear if the counter party of the trade (buy or sell) can be located on another ITAS entity/company. The activation of the transfer request will result in checking with acceptance/rejection of the request being fully audited. All the codes of the existing TRADE are checked with the codes in the selected target company. When the TRADE has been setup on the target company the only link will be a narrative illustrating where the trade originated (Internal memorandum). A list of email addresses (setup on the target company S01) can be notified that the new TRADE has been setup. The individual companies will need to maintain their Buy or Sell accordingly with any TRADE changes.
Estimates v Actuals (EVA)
The purpose of this process is to show, for the selected splits/records, the performance of TRADE estimates/costs and what has been actioned (to-date) in accounting procedures.
If the user is viewing the .000 record, ALL splits will be included in the process and their allocations.
If the user is viewing a tranche header e.g. .A00 record, ALL splits for that tranche will be included in the process and their allocations.
If the user is viewing other than the .000 record or a tranche header, ONLY that split will be included in the process and it’s allocation.
There is a process at Group level that allows the user to enter a TRADE/GroupNo and the resulting EVA reports are organized into Contract/tranche groups with the splits that have been located by their GroupNo. GroupNo is setup as a common reference for any number of TRADE splits , usually by a Charter/Journey.
The top section of the report provides a summary of products/commodities located and a list of Mills applied on any of the TRADE records. This section will list each TRADE split and any allocation with totals of buy and sales quantity.
The middle section lists each TRADE split and any allocation with more summary information, this complements the top section summaries but with more financial emphasis.
The bottom part of the EVA is the main analysis with 5 main sections and max 6 sub-sections. The column sections are Original TRADE estimates, Revised/Current Estimates, Actuals, the comparison of Actual and Original estimates and a column to indicate TRADE invoice status. The sub-sections are Purchase/Sale/market value/Gross margin, Purchase Costs, Sales Costs, Net margin, Special Interest/Financing charge (optional) and grand totals. The information presented in columns 1, 2 and 4 are extracts direct from the TRADE costs and contract values with exchange rate conversions to target currency.
The Actuals column needs more explanation. The invoiced values are the accounting records located in the WIP ledger using the transaction’s contract reference field. The Purchase and Invoiced values are determined by use of the transaction’s EXPENSE code, so it is important that accounting entries for Purchase TRADEs have EXP codes that correlate with the PHYSCODES/Cost types for PURC and .
The accrued value is based on the TRADE percentage actualized data. The cost items will agree with the FinCalc report, which shows more detail. The accrued values are only calculated if the Costs are a part of a Sale Invoiced tonnage, so unallocated purchases will not accrue any values and allocated trades that are not sales invoiced will not accrue values.
A CFI specific feature is that for Purchase and Sale rows, the original estimates EXCLUDES any value adjustments basis the TRADE/Quality. Assumption is that no Quality results would be known/estimated at start of TRADE life.
The special Interest/Financing row reports any TRADE/Costs that are nominated as the specific Interest code (PHYSCODES/Cost types/right-click – maintain controls.
Inventory
There are two different processes that can be activated to maintain/view detail Inventory.
a) If a company is operating Ferrous qualities, they can maintain detail inventory directly from TRADE whereby a row of details can be entered for each packing unit that is specified in the TRADE. Example, TRADE expresses 10 x COIL, total gross weight of 201.095 MT and Net weight of 200.850 MT. The user can enter upto 10 rows of detail (database table xx_cot01) and this detail can be used for DOCDES/forms etc. In this scenario, this inventory grid is primarily a scratch pad of associated data that is required to be kept with the TRADE. The TRADE/split process will allow the user to pick which inventory items belong the new split, this is useful for where there is a back-to-back already allocated and call-offs are being created for specific items.
b) If the operation is US Cotton, a complete subsystem (INVENTORY) is used to maintain the detail. TRADE /view inventory will allow the user to view a summary of bales by warehouse, with a drilldown to a row-by-row grid of each bale and a further drill-down to view the full detail of a BALE.
Amend Costs Actualisation %
This process is a bulk method for updating the % actualized for selected Costs, that have previously been marked by INVDIRECT as invoiced. The user can change existing % to be greater or less and an audit record is added to the Costs actualization grid to indicate that process. This process can also be achieved by the user changing the individual split via maintenance on costs grid. When the user has recalled a split and activated this process, all splits/records are processed to build a summary grid of Cost Types that have actualization data present. The user selects one cost type and a detail grid is presented for completion of which records require change and what is the revised %.