Oracle Cash Management

Oracle Cash Management
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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:
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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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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
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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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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.

Create Branch Address
Create Branch Contact
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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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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.

Create Account Contact
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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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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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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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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 automaticallyreconciled 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.

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