Oracl

eApps88 ​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: ​Enter the detailed information from each bank statement,
including bank account information, deposits received by the bank, and payments cleared.
i. Manual Entry ii. Load electronic statements that you receive directly from your
bank (via ​Bank
 Statement Open
Interface​)

2. 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:
Oracl
eApps88 ​Oracle Cash Management

• ​Automatic ​- Bank statement details are automatically matched and reconciled with
system transactions by running ​AutoReconciliation ​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
• Exchange Rates
• Organizations
• Sets of Books
• Define your bank accounts, and assign GL accounts.
• Transaction calendar (for cash forecasting)
• Set the Payables Option: Account for Payment. (The options are When Payment is Issued,
and When Payment Clears. Select at least the When Payment Clears option)
• Define system parameters
• Define bank transaction codes.
• Set up the Bank Statement Open Interface.
• Set up the Reconciliation Open Interface.
• Other optional Interfaces, if required.

To set up Oracle Payables or Oracle Receivables for Cash Management Integration: 1.

 In the Banks and Bank Accounts windows, define each bank account that you will be
reconciling. In the Account Use field, select Internal. ​2. ​In the GL Accounts tab of the Bank
Accounts window, enter, for each bank account, the GL accounts you want to use to account
for transactions that you reconcile. ​3. ​Cash ​4. ​Cash Clearing ​5. ​Bank Charges ​6. ​Bank Errors
(Payables only) ​7. ​Confirmed Receipts (Receivables only) ​8. ​The accounts you defined for the
bank account default to any Payables payment documents and Receivables payment
methods you define. You can override these default accounts in the Payment Documents
window when you define payment documents for the bank account. ​9. ​For each remittance
bank account, assign a remittance account.
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eApps88 ​Oracle Cash Management

To set Cash Management system parameters: Cash Management

Responsibility > Setup > System > System Parameters

System Controls TAB ​has Reconciliation Controls, Signing Authority Approval and
Archive/Purge Options ​Cash Management Transactions TAB ​has Exchange rate type
options, Bank Account Transfer Authorisation type.

Following setups are done as a part of Bank Account

setup: 1) Receivable Activity 2) Float Handling 3) Matching
Order option for Payables and Receivables 4) Tolerances
Details 5) Interface Code and Interface Matching Criteria 6)
Check box for Using Reconciliation Open Interface
Oracle Cash 8
Management
OracleApps8
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eApps88 ​Oracle Cash Management

Bank Setup Overview Create Bank – Information ​This page allows you to search for
existing banks, view and update them or create new banks.

Create Bank –Address ​You 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.
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eApps88 ​Oracle Cash Management

Create Bank –Contact ​You can maintain

multiple contacts at the bank.
 Create Branch –Information ​This page allows you to search for existing bank branches, view
and update them or create new bank branches.
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eApps88 ​Oracle Cash Management

Create Branch
–Address
 Create Branch
–Contact
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eApps88 ​Oracle Cash Management

Create Account –Owner & Use ​Select the bank branch to which your bank account
belongs and proceed to the bank account setup.

Create Account
–Information
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eApps88 ​Oracle Cash Management
 Create Account –Controls Reconciliation Controls. ​The reconciliation parameters have been
moved from the system level to the bank account level. Now you can have unique reconciliation
parameters for each bank account.

Create Account –Access ​In this step you will define in which functional areas – Payables,
Payroll, Receivables, and/or Treasury – this bank account can be used and by which
organizations.
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eApps88 ​Oracle Cash Management

Create Account
–Contact
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eApps88 ​Oracle Cash Management

Reconciling a Functional Currency Payment ​You install General Ledger and Payables, and
define US dollars (USD) as the functional currency for your ledger. You use Accrual Basis as
your accounting method. You record gains and losses both at payment issue and at payment
 clearing. You enter an invoice for 100 USD, approve, pay, reconcile, and create accounting
entries for the invoice and payment. Payables 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 Payables after each
activity: ​Activity Accounting Entries ​Enter invoice for 100 : USD DR Expense 100
USD CR AP Liability 100 USD

Pay invoice, taking 5 USD discount DR AP Liability 100 USD:

CR Discount 5 USD CR Cash Clearing 95 USD

Reconcile payment with bank statement, including bank charges of 2

USD: DR Cash Clearing 95 USD DR Bank Charges 2 USD CR Cash 97
USD

Reconciling a Functional Currency Receipt ​You install Oracle General Ledger and Oracle
Receivables, and define US Dollars as the functional currency for your ledger. You enter Accrual
Basis as your accounting method. You enter an invoice for 100 US Dollars (USD) and receive a
payment from your customer for 100 USD. You create a receipt for that amount, with a Receipt
Class that has the following options: Creation Method: Manual Require Confirmation: No
Remittance Method: No Remittance Clearance Method: By Matching

When you post the invoice and receipt, Oracle Receivables transfers the accounting entries to
Oracle General Ledger, and the Journal Import function creates a journal entry in your functional
currency.

The following shows the reconciling of a functional currency receipt:

Enter invoice for 100 USD: DR Accounts Receivable 100 USD CR
Revenue 100 USD

Enter receipt for 100

USD:
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eApps88 ​Oracle Cash Management

DR Remittance account 100

USD CR Accounts Receivable
100 USD

Reconcile receipt with bank statement, including bank charges of 2

USD: DR Cash 98 USD DR Bank Charges 2 USD CR Remittance
account 100 USD

Bank Statement Open Interface ​You can load bank statement information into the Bank
Statement Open Interface tables ​using the Bank Statement Loader 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 Bank
Statement tables.

Bank Statement Mapping ​Use the Bank Statement Mappings window to map the structure of
your bank statement file to the Bank Statement Open Interface tables. You need to define the
mapping for each unique file structure. The default mapping templates for BAI2, SWIFT940, and
French EDIFACT are provided by Cash Management and cannot be changed.

Reconciliation Open Interface ​Using the Reconciliation Open Interface, you can reconcile
settlements created in Oracle Treasury with your bank statements. You can also clear and
reconcile payments and receipts that originate in applications other than Oracle Applications.

Entering Bank Statements ​Before you can reconcile transactions against a bank statement,
you need to enter the bank statement information into Oracle Cash Management. You can
accomplish this task by doing one of the following:
• Using the Bank Statement Loader program - If your bank provides account statements in a flat
file using a defined format like BAI2 or SWIFT940, you can use the Bank Statement Open
Interface
• Using a custom loader program
• Using the automatic bank transmission feature
• Using the XML Gateway
• Manually entering the information

Reviewing Bank Statement Interface Errors ​You can use the Bank Statement Interface window
to review import validation errors that resulted when you imported bank statement information
from the Bank Statement Open Interface tables. In addition, you can review the
 AutoReconciliation Execution Report ​that is printed automatically by the Bank Statement
Import program.
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eApps88 ​Oracle Cash Management

You 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:
• Use the Bank Statement Interface and Bank Statement Interface Lines
window.
• Repair the Bank Statement Open Interface tables
manually.
• Repair, reload, and re-import the original bank statement file.

Updating Bank Statements ​You can update any bank statement, whether
imported or entered manually in Cash Management. (In Find Bank Statements
window)

Reconciling Bank Statements Reconciling Bank Statements Automatically ​You can use
the ​AutoReconciliation program ​to automatically reconcile any bank statement in Oracle
Cash Management. There are three versions of the program:

• ​AutoReconciliation​: Use this program to reconcile any bank statement that has
already been entered in Cash Management.
• ​Bank Statement Import​: Use this program to import an electronic bank statement after
loading the bank statement file into the Bank Statement Open Interface tables.
• ​Bank Statement Import and AutoReconciliation: ​Use this program to import and
reconcile a bank statement in the same run.

You can run these programs from the Submit Request window, the Reconcile Bank
Statements window, or the Bank Statement Interface window.

You can also import and automatically reconcile a bank statement from the Bank
Statement Loader program, by using the option of Load, Import and AutoReconciliation.

After you run the program, you can review the AutoReconciliation Execution Report to identify
 any reconciliation errors that need to be corrected.

After you automatically reconcile a bank statement and correct any reconciliation errors, you can
run the Bank Statement Detail Report or use the View Bank Statements window to review
reconciled and unreconciled statement lines. If lines remained unreconciled, you can:
• Update the bank statement and rerun the AutoReconciliation program.
• Reconcile the statement lines manually.

Once you have reviewed your reconciliation results, you can transfer the accounting entries to
your general ledger from Oracle Payables, Oracle Receivables, and Oracle Cash
Management.
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eApps88 ​Oracle Cash Management

Reconciling Bank Statements Manually ​You 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.

When you use manual reconciliation, you reconcile each bank statement line with available
transactions. You can search for Payroll payments, Receivables receipts, Payables payments,
miscellaneous transactions, GL journal entries, open interface transactions, and statement
lines that meet specific criteria, and reconcile the statement line against them.

As 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. For example, you
can create a miscellaneous transaction to account for bank charges or interest. You can also
create Payables payments and Receivables receipts from Cash Management.

Transferring Bank Reconciliation Transactions to Your General Ledger ​You need to

transfer the accounting transactions you created during reconciliation for Payables and
Receivables to your general ledger interface tables. You cannot transfer these transactions
directly from Cash Management. Instead, transfer them from Payables and/or Receivables,
depending on the transaction type. For example, use Receivables to transfer any
miscellaneous receipts entries generated during your Cash Management reconciliation. Then,
follow your normal posting procedure.