R 12 CASH MANAGEMENT
R 12 CASH MANAGEMENT
Introduction Oracle Cash Management is an enterprise wide
solution for managing liquidity and controlling cash. Cash
Management gives you direct access to expected cash flows from your
operational systems. You can quickly analyze enterprise wide cash
management cash requirements and currency exposures, ensuring
liquidity and optimal use of cash resources.
Benefits of Cash Management Forecast cash flows in any currency
and in multiple time periods Streamline the reconciliation process
Monitor for exceptions and fraud Forecast based on historical or
future transactions Manage the cash cycle efficiently and with
control
Cash Management Integration Cash Management is integrated with
Payables, Receivables and General Ledger. Payables: Payments
information automatically transfers to CM without any process.
Receivables: to transfer Receipts information to CM remittance
process is required. From AR only remitted eligibility transactions
will transfer to CM. GL: If we have entered any journal in GL with
cash account, that data will flow to CM.
Cash Management is used mainly for 2 purposes1. Reconciliation2.
Forecasting
Forecasting is used to identify the future cash inflows and
outflows of an Organization.
Reconciliation: Normally at the end of every period, the entries
in the cash book are compared with entries in the pass book. The
exact causes of differences are scrutinized and then bank
reconciliation statement is prepared. Necessary suitable entries
will passed in the cash book.Reconciliation process is 3 types:1.
Manual Clearing Process2. Manual Reconciliation3. Automatic
Reconciliation
Manual Clearing Process:In this process we will manually clear
the transactions without entering the bank statement into
Oracle.
Manual Reconciliation:In this process we will manually enter the
bank statement into Oracle. We will take the transactions one by
one and search for the bank transactions manually and mark the
transactions as reconciled.
Automatic Reconciliation ProcessAutomatic Reconciliation process
can be done in 2 ways: We will enter bank statement into Oracle and
run a program, so that system will search the transactions and will
reconcile automatically. In another way, in the case where bank
statement transactions are more and not possible to enter manually
into oracle, in that case, we will upload the bank statement into
Oracle through specific formats:BAI 2 & SWIFT 940 These formats
are used to upload bank statements into Oracle. Once we received
bank statements in the above formats from the bank, we will place
these files in a directory where cash management application is
stored. We have to run Bank statement load program. We have to
define Bank codes for transaction identification purpose.
Define Cash Management Responsibility
Navigation:System AdministratorSecurity Responsibility
Define
Application:Cash ManagementMenu:CE _ Super UserRequest group:All
Reports Cash Management
Assign Profile Options to Cash Management
ResponsibilityNavigation:System AdministratorProfile SystemProfile
Options:1. GL Ledger Name2. HR Business Group3. HR Security
Profile4. HR User type5. MO operating unit
Assign Cash Management Responsibility to User
Navigation:System AdministratorSecurity User Define
Assign Balancing Segment Values to Legal Entity
Navigation:General LedgerSetup Financials Accounting Setup
Manager Accounting Setup
Query your ledgerClick on update accounting optionsGo to legal
Entity tabClick on Update Balancing Segment ValuesClick on Add
balancing Segment valuesChoose the Balancing Segment values to
assign to Legal EntityApply.
System ParametersSystem parameters are controlling features at
Legal Entity Level.Navigation:Cash ManagementSetup System System
Parameters
Choose Legal Entity Choose Ledger Enter Begin date
Go to System Controls tab:Enable the check boxes Show cleared
transactions Show void Payments Allow adding lines to imported
statement Archive / PurgeEnter lines per commitChoose Signing
authority approval.
Go to Cash Management Transactions tab
Choose Exchange rate type Bank Statement Cash flow Rate Date:
Cleared date Bank Transfer Rate Date: Cleared Date Bank Account
TransfersAuthorization: Not Required.
Enter Bank statements
Bank statements will be received from bank and entered in the
Oracle cash management. It contains 2 levels of information.1. Bank
statement header2. Lines Bank statements can be created in 2
ways.1. Manual2. Import bank statements
I. Enter Manual Bank Statement
Navigation:Bank Statements Bank Statements and
Reconciliation
Say New
Choose Internal Account Number Choose Statement date Enter
Opening Balance, Receipts and Payments detailsClick on Lines
button
Enter receipts and payments informationSave and close this
window.II. Import Bank statement
We will import bank statement into Oracle application through
the program Bank statement import.This program will support 2 types
of bank statement file formats.1. BAI 22. Swift 940
Navigation: View Request
Say OK.
ReconciliationReconciliation means: matching either payment or
receipt with the bank statement is called
reconciliation.Reconciliation can be done in 2 ways.1. Manual
Reconciliation2. Auto Reconciliation
I. Manual Reconciliation
Payment Reconciliation:Step: 1Query the payment document which
you want to reconcile to view the StatusNavigation:Cash
ManagementView Payments
Step: 2Reconcile the Payment DocumentNavigation:Bank Statements
Bank Statements and Reconciliation
Query your account numberQuery statement numberSay Find
Place the cursor on statement number line Say review
Click on Lines
Place cursor on the payment line Click on Available
Choose DetailEnable AP Payment check boxSay Find
Select the transaction typeSay Reconcile
Now the Status is ReconciledFor receipt reconciliation:Choose
receipt class and Payment method
Say Find and MarkTransaction will be automatically selected by
system.Status will be changed to Reconciled from Remitted.
II. Auto Reconciliation
Auto Reconciliation is used to reconcile payments or receipts
automatically by running a program.
Step: 1Define Bank transaction codesNavigation:Setup Banks Bank
Transaction Codes
Query your Bank accountSay OK
Choose Type Payment & ReceiptEnter code for each type Save
your workStep: 2Create Bank StatementsNavigation:Bank Statements
Bank Statements and Reconciliation
Say New
Choose: Bank account number Enter statement number Enter
Receipts and Payment DetailsClick on Lines
Enter Line detailsSave your work.Now the status is Un
reconciled
Step: 3Run auto reconciliation programNavigation:View
Request
Submit a new request Single requestSay OKProgram Name:Auto
ReconciliationParameters: Choose Bank branch Name Bank account
number Statement number
Say OKSay SubmitEnsure program completed normal
Step: 4Query the bank statement to check the reconciliation
status in the bank statement linesNavigation:Bank Statements Bank
statements and reconciliation
Choose account number & statement numberSay Find
Place cursor on the Account number and say Review
Click on Lines button
Now you can see the status as Reconciled
Step: 5check the reconciliation status in AP
PaymentsNavigation:Accounts PayablesPayments Inquiry Payments
Enter payment document numberSay Find
Now the status is Reconciled Un accountedAccounting: PartialGo
to Payments Enter windowQuery the payment document numberGo to
Actions say Create accountingRe query the payment document
Now the status is Reconciled
Bank Account Transfer Transfer of Funds within 2 bank
accounts
This concept is used to transfer the balances from one bank
account to another bank account.
Step: 1Complete Intra Company / Inter Company setup in the
GLNavigation: Setup Financials Accounting Setup manager Accounting
Setup
Step: 2create new bank accountNavigation:setup Banks Bank
Accounts
Click on Create button
Choose Country Choose Bank Name Choose Branch NameSay
Continue
Choose: Legal Entity as Bank Account Owner Account Use:Payables
& ReceivablesSay Next
Enter Account Name Enter Account Number Choose Currency: INR
Enable check box of Multiple Currencies Allowed Account type:
OtherSave and NextGo to General Controls fieldsChoose: Cash Account
Cash Clearing Account
Save and next
Click on Add Organization Access
Choose: Account use:Payables & receivables Organization;
Choose Operating unitSay ContinueSay Apply
Say FinishStep: 3Create Bank Account TransferNavigation:Cash
management Bank Account Transfers
Say CreateGo to General Information tab
Choose: Settle transactions through Oracle Payments: No Transfer
date Currency Enter transfer amount Enter CommentsEnter Source Bank
Account and Destination bank accountSay Apply
Now the status is: NEWClick on Validate button
Now the status is: SettledStep: 4clear the transaction in the
payment bank accountNavigation:Cash ManagementBank statements
Manual Clearing Clear Transactions
Choose: Detail Cash Management Cash flow
Go to Bank tabChoose payment account numberSay Find
Select the transaction typeSay Clear Transaction
Step: 5clear the transaction in the Receiving bank
accountNavigation:Cash ManagementBank statements Manual Clearing
Clear Transactions
Choose: Detail Cash Management Cash flowGo to Bank tabChoose
payment account number
Say Find
Select receipt: transaction typeSay Clear transactionStep: 6Run
Create Accounting program and Transfer to GLNavigation:View Request
Submit a new request Select single requestSay OK
Name: Create Accounting
Parameters: Choose your Ledger Enter End Date Mode: Final Errors
only: No Report: Detail Transfer to GL: Yes Post in GL: No Include
user transactions identifier: No
Say OKSay Submit
Ensue the below programs completed Normal1. Create Accounting2.
Accounting Program3. Journal Import4. Sub ledger Accounting
balances
Step: 7Query the journals in GL and postNavigation: Journal
EnterChoose: Ledger Name Source as Cash Management
Say Find
Place cursor on un posted journalSay Review Journal
Say Post
Ensure Concurrent ID request completed normal
Step: 8View Bank BalancesNavigation:Cash Management Bank
Balances
UN Reconciliation
Step: 1Query the bank statement line which you want to un
reconciledNavigation:Bank Statements Bank Statements and
Reconciliation
Say Find
Place cursor on the Account number and say Review
Click on Lines button
Now you can see the status as ReconciledChoose the line and say
Reconciled
Select the payment line and say un reconcile button
Now the status is un reconciledSave your work.
Step: 2Query the payment document to check the
statusNavigation:CM View Payments
Query payment document number
Now the status is Negotiable
Causes of Differences:1. Checks deposited into bank but not yet
collected and credited2. Checks issued but not presented for
payment3. Bank charges4. Amount collected or credited by bank on
standing instructions5. Amount paid or debited by bank on standing
instructions6. Interest credited by the bank7. Interest debited by
the bank on over draft8. Direct payment by customers into the bank
account9. Dishonor of checks or bills10. Errors
Format of Bank Reconciliation StatementBank Reconciliation
statement as on
03/31/2011.-------------------------------------------------------------------------------------ParticularsRs.Rs.-------------------------------------------------------------------------------------Balance
as per cash bookAdd:1. Checks issued but not yet presented for
payment2. Interest allowed by bank3. Direct payments by a customer
into bankLess:1. Checks deposited into bank but not yet collected2.
Bank charges3. Dishonored checks or bills Balance as per Pass
Book
IMPORTANT REPORTS IN CASH MANAGEMENT
1. Auto Reconciliation2. Bank Statement detailed report3. Bank
statement summary report4. Batches available for reconciliation5.
Cash in Transit report6. Cleared Transactions report7. General
Ledger reconciliation report8. Unreconciled bank statement9.
Transactions available for reconciliation report10. Auto
reconciliation execution report11. Bank statement by document
number report12. Bank transactions code listing
Cash Management period closing procedures Ensure the following
before closing the Payables & Receivables. Any reconciliation
transactions created by Cash Management are properly entered.
Account balances are updated. Reports include accurate information.
Specifically the following steps are recommended. 1. Reconcile all
your bank statements. 2. Transfer all transactions from Payables to
your General Ledger interface tables. 3. Run Journal Import in
General Ledger. 4. Post journals in General Ledger. 5. Run the GL
Reconciliation Report from Cash Management for each bank account.
This report compares the statement balance you specify to the
General Ledger ending balances. 6. Review the report for errors. 7.
If there are errors in the report, correct them in Cash Management,
as needed. Repeat the above steps until there are no more
errors.
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