Oracle Cash Management

Oracle Cash Management is an enterprise cash management solution that helps you
effectively manage and control your cash cycle. It provides comprehensive bank
reconciliation and flexible cash forecasting.
Oracle CM Business Process
Bank Reconciliation
There are two major process steps you need to follow when reconciling bank
statements
1. Load Bank Statements: !nter the detailed information from each bank
statement" including bank account information" deposits received by the bank" and
payments cleared.
i. Manual !ntry
ii. #oad electronic statements that you receive directly from your bank $via Bank Statement Open Interace%
!. Reconcile Bank Statements: Once you have entered detailed bank statement
information into Cash Management" you must reconcile that information with your
system transactions. Cash Management provides two methods of reconciliation
& "utomatic ' (ank statement details are automatically matched and reconciled
with system transactions by running "utoReconciliation program. This method is ideally suited for bank accounts that
have a high volume of transactions.
& Manual ' Manually match bank statement details with system transactions. The method is ideally suited to reconciling
bank accounts that have a small volume of monthly transactions. This method can be used to reconcile any bank
statement details that
could not be reconciled automatically.
Cash Management Setup Checklist
Currencies
!xchange )ates
Organi*ations
+ets of (ooks
,efine your bank accounts" and assign -# accounts.
Transaction calendar $for cash forecasting%
+et the .ayables Option /ccount for .ayment. $The options are 0hen .ayment is Issued" and 0hen .ayment Clears. +elect
at least the 0hen .ayment Clears option%
,efine system parameters
,efine bank transaction codes.
+et up the (ank +tatement Open Interface.
+et up the )econciliation Open Interface.
Other optional Interfaces" if re1uired.
#o set up Oracle Pa$a%les or Oracle Recei&a%les or Cash Management Integration:
1. In the (anks and (ank /ccounts windows" define each bank account that you will
be reconciling. In the /ccount 2se field" select Internal.
!. In the -# /ccounts tab of the (ank /ccounts window" enter" for each bank account"
the -# accounts you want to use to account for transactions that you reconcile.
'. Cash
(. Cash Clearing
). (ank Charges
*. (ank !rrors $.ayables only%
+. Confirmed )eceipts $)eceivables only%
,. The accounts you defined for the bank account default to any .ayables payment
documents and )eceivables payment methods you define. 3ou can override these
default accounts in the .ayment ,ocuments window when you define payment
documents for the bank account.
-. 4or each remittance bank account" assign a remittance account.
#o set Cash Management s$stem parameters:
Cash Management Responsi%ilit$ . Setup . S$stem . S$stem Parameters
S$stem Controls #"B has )econciliation Controls" +igning /uthority /pproval and /rchive5.urge Options
Cash Management #ransactions #"B has !xchange rate type options" (ank /ccount Transfer /uthorisation type.
4ollowing setups are done as a part of (ank /ccount setup
6% )eceivable /ctivity
7% 4loat 8andling
9% Matching Order option for .ayables and )eceivables
:% Tolerances ,etails
;% Interface Code and Interface Matching Criteria
<% Check box for 2sing )econciliation Open Interface
Bank Setup O&er&ie/
Create Bank Inormation
This page allows you to search for existing banks" view and update them or create new banks.
Create Bank "ddress
3ou can maintain several addresses for the bank in case" for example" when the bank
has different mailing and physical locations. One of the addresses has to be marked as a
primary or identifying.
Create Bank Contact
3ou can maintain multiple contacts at the bank.
Create Branch Inormation
This page allows you to search for existing bank branches" view and update them or create new bank branches.
Create Branch "ddress
Create Branch Contact
Create "ccount O/ner 0 1se
+elect the bank branch to which your bank account belongs and proceed to the bank
account setup.
Create "ccount Inormation
Create "ccount Controls
Reconciliation Controls. The reconciliation parameters have been moved from
the system level to the bank account level. =ow you can have uni1ue reconciliation
parameters for each bank account.
Create "ccount "ccess
In this step you will define in which functional areas > .ayables" .ayroll" )eceivables" and5or Treasury > this bank account
can be used and by which organi*ations.
Create "ccount Contact
Reconciling a 2unctional Currenc$ Pa$ment
3ou install -eneral #edger and .ayables" and define 2+ dollars $2+,% as the functional
currency for your ledger. 3ou use /ccrual (asis as your accounting method. 3ou record
gains and losses both at payment issue and at payment clearing. 3ou enter an invoice
for 6?? 2+," approve" pay" reconcile" and create accounting entries for the invoice and
payment. .ayables records the accounting entries in the functional currency.
The following table shows the accounting entries for the functional currency payment.
This example assumes that you create accounting entries in .ayables after each activity
"cti&it$ "ccounting 3ntries
!nter invoice for 6??
2+, ,) !xpense 6?? 2+,
C) /. #iability 6?? 2+,
.ay invoice" taking ; 2+, discount ,) /. #iability 6?? 2+,
C) ,iscount ; 2+,
C) Cash Clearing @; 2+,
)econcile payment with bank statement" including bank charges of 7 2+,
,) Cash Clearing @; 2+,
,) (ank Charges 7 2+,
C) Cash @A 2+,
Reconciling a 2unctional Currenc$ Receipt
3ou install Oracle -eneral #edger and Oracle )eceivables" and define 2+ ,ollars as the
functional currency for your ledger. 3ou enter /ccrual (asis as your accounting
method. 3ou enter an invoice for 6?? 2+ ,ollars $2+,% and receive a payment from
your customer for 6?? 2+,. 3ou create a receipt for that amount" with a )eceipt Class
that has the following options
Creation Method Manual
)e1uire Confirmation =o
)emittance Method =o )emittance
Clearance Method (y Matching
0hen you post the invoice and receipt" Oracle )eceivables transfers the accounting
entries to Oracle -eneral #edger" and the Bournal Import function creates a journal
entry in your functional currency.
The following shows the reconciling of a functional currency receipt
!nter invoice for 6?? 2+,
,) /ccounts )eceivable 6?? 2+,
C) )evenue 6?? 2+,
!nter receipt for 6?? 2+,
,) )emittance account 6?? 2+,
C) /ccounts )eceivable 6?? 2+,
)econcile receipt with bank statement" including bank charges of 7 2+,
,) Cash @C 2+,
,) (ank Charges 7 2+,
C) )emittance account 6?? 2+,
Bank Statement Open Interace
3ou can load bank statement information into the (ank Statement Open Interace ta%les
using the (ank +tatement #oader program or a custom loader program.
Once you populate the open interface tables" you can run the Bank Statement Import program to
validate and transfer the bank statement information into the Cash Management (ank
+tatement tables.
Bank Statement Mapping
2se the (ank +tatement Mappings window to map the structure of your bank statement
file to the (ank +tatement Open Interface tables. 3ou need to define the mapping for
each uni1ue file structure. The default mapping templates for (/I7" +0I4T@:?" and
4rench !,I4/CT are provided by Cash Management and cannot be changed.
Reconciliation Open Interace
2sing the )econciliation Open Interface" you can reconcile settlements created in Oracle
Treasury with your bank statements. 3ou can also clear and reconcile payments and
receipts that originate in applications other than Oracle /pplications.
3ntering Bank Statements
(efore you can reconcile transactions against a bank statement" you need to enter the
bank statement information into Oracle Cash Management. 3ou can accomplish this
task by doing one of the following
& 2sing the (ank +tatement #oader program ' If your bank provides account statements in a flat file using a defined format
like (/I7 or +0I4T@:?" you can use the (ank +tatement Open Interface
& 2sing a custom loader program
& 2sing the automatic bank transmission feature
& 2sing the DM# -ateway
& Manually entering the information
Re&ie/ing Bank Statement Interace 3rrors
3ou can use the (ank +tatement Interface window to review import validation errors
that resulted when you imported bank statement information from the (ank +tatement
Open Interface tables. In addition" you can review the "utoReconciliation 34ecution
Report that is printed automatically by the (ank +tatement Import program.
3ou can review all import and validation errors for a statement" or you can review only
those errors that occurred for a specific statement line.
If you encounter import errors" you can correct the data one of three ways
& 2se the (ank +tatement Interface and (ank +tatement Interface #ines window.
& )epair the (ank +tatement Open Interface tables manually.
& )epair" reload" and re'import the original bank statement file.
1pdating Bank Statements
3ou can update any bank statement" whether imported or entered manually in Cash
Management.
$In 4ind (ank +tatements window%
Reconciling Bank Statements
Reconciling Bank Statements "utomaticall$
3ou can use the "utoReconciliation program to automatically reconcile any bank
statement in Oracle Cash Management. There are three versions of the program
& "utoReconciliation 2se this program to reconcile any bank statement that has
already been entered in Cash Management.
& Bank Statement Import 2se this program to import an electronic bank statement
after loading the bank statement file into the (ank +tatement Open Interface tables.
& Bank Statement Import and "utoReconciliation: 2se this program to import and
reconcile a bank statement in the same run.
3ou can run these programs from the +ubmit )e1uest window" the )econcile (ank
+tatements window" or the (ank +tatement Interface window.
3ou can also import and automatically reconcile a bank statement from the (ank +tatement #oader program" by using the
option of #oad" Import and /uto)econciliation.
/fter you run the program" you can review the /uto)econciliation !xecution )eport to
identify any reconciliation errors that need to be corrected.
/fter you automatically reconcile a bank statement and correct any reconciliation
errors" you can run the (ank +tatement ,etail )eport or use the Eiew (ank +tatements
window to review reconciled and unreconciled statement lines. If lines remained
unreconciled" you can
& 2pdate the bank statement and rerun the /uto)econciliation program.
& )econcile the statement lines manually.
Once you have reviewed your reconciliation results" you can transfer the accounting
entries to your general ledger from Oracle .ayables" Oracle )eceivables" and Oracle
Cash Management.
Reconciling Bank Statements Manuall$
3ou can use the manual method to reconcile any bank statement"
whether imported or entered manually. In addition" you can create new bank statement
lines as you reconcile transactions" as well as update the reconciliation information for a
previously manually'or automatically'reconciled statement.
0hen you use manual reconciliation" you reconcile each bank statement line with
available transactions. 3ou can search for .ayroll payments" )eceivables receipts"
.ayables payments" miscellaneous transactions" -# journal entries" open interface
transactions" and statement lines that meet specific criteria" and reconcile the statement
line against them.
/s you reconcile a statement manually" you may need to create transactions to account
for differences between the sum of the reconciled transaction and the line amount. 4or
example" you can create a miscellaneous transaction to account for bank charges or
interest. 3ou can also create .ayables payments and )eceivables receipts from Cash
Management.
#ranserring Bank Reconciliation #ransactions to 5our 6eneral Ledger
3ou need to transfer the accounting transactions you created during reconciliation for
.ayables and )eceivables to your general ledger interface tables. 3ou cannot transfer
these transactions directly from Cash Management. Instead" transfer them from
.ayables and5or )eceivables" depending on the transaction type. 4or example" use
)eceivables to transfer any miscellaneous receipts entries generated during your Cash
Management reconciliation. Then" follow your normal posting procedure.