Accenture

Vivek
.upadhyay@accenture.com

Cash
Manageme
nt
Cash Management flow and Process
Document contains cash management concepts with complete business
flow and BT customization

Cash Management: Cash Cycle

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 Cash Management is used to reconcile transactions on the (electronic)
bank statements against recorded transactions in Accounts Payables and
Accounts Receivables. You can also create miscellaneous transactions for bankoriginated entries, such as bank charges and interest
The Bank Reconciliation function enables you to eliminate errors and control cash
outflow. Financial audits require that you should reconcile your bank accounts
with bank statements to locate errors and frauds. For this reason, you should
reconcile your bank account with the bank statement every time the bank sends
you a statement. The Oracle Cash Management system's bank reconciliation
function enables you to identify and fix the causes of non-reconciliation of bank
balances with bank statements and enables you to maintain accurate cash
balances.
Since Cash Management doesnt have an own posting into GL, all transactions go
through Accounts Payables or Accounts Receivables. The Miscellaneous
Transactions will flow through Accounts Receivables into GL.

There are two major process steps you need to follow when reconciling bank
statements:
1. Load Bank Statements: You need to enter the detailed information from
each bank statement (SWIFT MT940) including bank account information,
deposits received by the bank, and payments cleared. You can enter bank
statements manually or load electronic statements that you receive
directly from your bank.
Auto-Reconciliation needs the imported bank statement line to pass these
checks:

The currency code on the statement line must be defined in the system.
The bank transactions code must be defined.
The exchange rate type must be of valid type defined.
The amount must be entered for the statement.
Multi-Currency Validation

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:
o

Automatic- Bank statement details are automatically matched and

reconciled with system transactions. This method is ideally suited
for bank accounts that have a high volume of transactions.

Manual- This method requires you to 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. You can also use the manual reconciliation
method to reconcile any bank statement details that could not be
reconciled automatically

The Bank Statement Open Interface table consists of two tables:

The Bank Statement Headers Interface Table: Contains header-level

information. The name of the table is CE_STATEMENT_HEADERS_INT_ALL.
This table must contain exactly one record for each bank account within
a bank statement.

The Bank Statement Lines Interface Table: Contains transaction-level

information from the bank statement. This table is named
CE_STATEMENT_LINES_INTERFACE.

Run the Bank Statement Import Program, which is a concurrent program, to

transfer the information from the interface tables to the bank statement tables
in Oracle Cash Management.

Bank Transaction Codes

If you want to load electronic bank statements or use Cash Management's Auto
Reconciliation feature, you must define, for each bank account, the transaction
codes that your bank uses to identify different types of transactions on its
statements. You should define a bank transaction code for each code that you
expect to receive from your bank. Payment and Receipt codes may be defined
more than once if they apply to transactions from multiple sources
You can select from the following list of values:

Payment: Payments such as generated or recorded checks, payment

batches, wire transfers, electronic funds transfers, or payroll checks.

Receipt: Receipts such as received checks, remittance batches, direct

debits, and bills of exchange.

Miscellaneous payment: Payments not associated with supplier

invoices, such as petty cash transactions directly posted to cost accounts
or bank charges.

Miscellaneous receipt: Receipts not associated with customer invoices,

such as petty cash transactions directly posted to revenue accounts, such
as interest received.

Stopped: Stopped payments previously entered, generated, or cleared,

such as call back of check. A stopped transaction type matches only to
Voided or Stopped payments in Payables or Oracle Payroll.

Rejected: Receipts rejected for reasons other than non-sufficient funds,

such as an invalid bank account. A rejected transaction type matches only
to reversed receipts in Receivables.

NSF (Non-Sufficient Funds): Receipts rejected by the bank because the

accounts on which they were drawn had non-sufficient funds. You can
reverse these receipts by creating a standard reversal. Cash Management
reopens the invoices you closed with the original receipt. When you match
bank statement lines with transactions, an NSF transaction type only
matches to reversed receipts in Receivables.

Sweep In: Incoming funds transfer from an internal bank account. This
bank transaction type identifies the originating bank account.

Sweep Out: Outgoing funds transfer from an internal bank account. This
bank transaction type identifies the receiving bank account.

Cash Management Setup: System Parameters:

Cash Management: Automatic Reconciliation

The purpose of reconciliations is to make sure that items placed on the Cash
Clearing account by the Payables and Receivables sub ledgers get matched
against the bank statement lines and therefore move out from the Cash Clearing
account. Any Miscellaneous transactions would need to be reconciled as well in
order to complete the reconciliation of the bank statements.
Go to the Bank Statements and Reconciliation-windows. Select the account you
would like to work on. Select No for the Complete option in case you only
want to see statements that havent been fully reconciled yet. Then click on
Find and you will get the statements that still need to be reconciled.

Navigation: Tools->Auto reconciliation. Afterwards click on Submit.

Cash Management will now try to automatically reconcile Accounts Payables

payments, Accounts Receivables receipts and any Miscellaneous Transactions
(Bank Charges, Cash/ZBA Transfers, USD/Euro pooling transactions etc.)

You can also customize the concurrent request to run Auto reconciliation process
along with Load and Import.

Matching Criteria for Payables Transactions

The Cash Management Auto Reconciliation program fully matches Payables
transactions against bank statement lines if the transactions meet the following
criteria:

For payment batches (such as EFT batches), the Payment Instruction ID

matches the statement line Transaction Number, and the transaction
amount is within the reconciliation tolerance, and

For the detail payment transactions stopped transactions, the matching

sequence searches in the following order:
1. Payment Number
2. Invoice Number and Supplier Bank Account
3. Invoice Number and Supplier Name
Also, the transaction amount is within the reconciliation tolerance.

Note: If the bank statement does not provide a check number for a
payment, then matching to the invoice number and supplier bank account
number is particularly useful.

For stopped transactions, the payment must first be stopped or voided in

Payables.

Matching Criteria for Receivables Transactions

The Cash Management Auto Reconciliation program fully matches Receivables
transactions against bank statement lines if the transactions meet the following
criteria:

For remittance batches (such as Direct Debit batches), the Remittance

Batch Deposit Number or Receipt Batch Name matches the statement line
Transaction Number and the transaction amount is within the
reconciliation tolerance.

For detail remittance transactions, NSF (Non-Sufficient Funds), and

Rejected transactions, the matching sequence searches in the following
order:
1. Receipt Number
2. Invoice Number and Customer Bank Account Number
3. Invoice Number and Customer Name
Note: Also, the transaction amount is within the reconciliation
tolerance.
If the bank statement does not provide a receipt number for a
receipt, then matching to the invoice number and customer bank
account number is particularly useful.

For NSF (Non-Sufficient Funds) or Rejected transactions the receipt must

first be reversed in Receivables.

Manual reconciliation of Receipts or Payment:

When youre in the Review window, click on Lines. Then select
Unreconciled and click on Find. It will then show you the unreconciled line
items.

Click on Available, Select Payment under Detail, empty the number fields
and click on Find. When possible enter the amounts, this will make the search a
lot faster!

Or it is a receipt then

Select the transaction you want to reconcile it with by ticking the box in front of
it and then press Reconcile.

Manual reconciliation of Miscellaneous Transection:

From cash management you can reconcile Miscellaneous transactions (bank
charges, exchange gain/loss, bank interest, cash transfer etc.) manually. This can
be used for debits (payments) and credits (receipts). All the items created in
Cash Management will be recorded in Receivables and posted to GL when a GL
transfer is ran from Receivables.

Go to the line item you would like to reconcile and click on the Create button,
then select Miscellaneous and click OK.
Select the activity which you would like to reconcile it against. This list is
populated from the Receivables Activities setup in Receivables. With
Receivables Activities you can map a specific activity against a specific GL
account (for example for Bank Chares, Bank Interest, Exchange Gain/Loss etc.)
Enter a friendly Receipt Number, so you can easily trace it back later on when
needed. For Example: Bank Charges 30-Oct-2014.
Select the values in the other fields from the dropdown lists Then click Create
and Yes

Incorrect CE setup information can include wrong transaction codes,

currency, or bank account information. The solution is update CE setup
information and then run the Auto-Reconciliation Import program again.
For bank transmission errors, the solution is to obtain a correct
transmission file from the bank or alternatively update the statement
using the Bank Statement Interface window. For SQL Loader file problems,
modify Loader file and then rerun the Auto-Reconciliation Import program.

In CE you can also create AR transactions and AP transactions and you can
also reverse these transactions.
When NSF or rejected receipts appear you can handle them manually by
reversing the receipt manually and then reconciling the reversed receipt.
When a stopped or voided payment is done then voids the payment in AP
to mark the supplier invoice as unpaid then reconcile the stopped/voided
payment statement line to the voided payment

Returned Payments
The bank will sometime return payments because these could not be executed.
Even though these might have been debited to our bank account before. In order
to reconcile these line items do the following:
1. Unreconcile the already reconciled payment:
Go to the Review window. Click on Reconciled and select the
transaction you would like to unreconciled and click Unreconcile.
2. Inform Accounts Payable about the payables document number that was
returned so they can void this payment in Payables.
3. Go to the statement line with the returned payment. Then click on Available
and select Statement Line. Then click on Find. Select the statement line with
the original payment(s). They should be of the Type Stmt-Payment. Then click
reconcile. It will now reconcile the statement line with the returned item (Credit)
against the statement line with the original payment (Debit).
EX: The 2000 payment (inc 500) was fully reconciled to AP invoices.
I then un-reconciled the 500 part of the 2000 payment (altering the payment
status to negotiable, allowing me to void the 500 part of the payment).
We now want to fully reconcile this payment and I was hoping that I could contra
the 500 remaining of the 2000 payment with the remaining 500 of the 4000
receipt.