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Oracle Cash Management User Guide
Release 12.1
Part Number E13483-04
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Overview

This chapter covers the following topics:

About 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.

Related Topics

About Bank Reconciliation

About Bank Statements

Matching Bank Statement Lines with Transactions

Multi-Currency Handling

Integration with Oracle Receivables, Payables, Payroll, and Treasury

Oracle Payables Reconciliation Accounting

Oracle Receivables Reconciliation Accounting

Oracle Payroll Reconciliation

Oracle Treasury Reconciliation

Using Cash Management with Automatic Clearing

About Cash Forecasting

About Bank Reconciliation

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, 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. See: Entering Bank Statements Manually and Loading 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:

Miscellaneous Transactions

During the reconciliation process, you can create miscellaneous transactions for bank-originated entries, such as bank charges and interest. You can also manually enter Payables payments or Receivables receipts. The automatic reconciliation process can be set up to create miscellaneous transactions automatically.

Clearing

When you reconcile a transaction, the transaction is first matched to bank statement details and then cleared (if uncleared). Alternatively, you can manually clear Payables payments, Receivables receipts, miscellaneous transactions, open interface transactions, and Cash Management cashflows (except for those created from bank statement lines) in Cash Management prior to reconciliation to maintain more up-to-date cash account balances. You can also use Automatic Clearing to clear receipts in Oracle Receivables.

When you clear a transaction, Cash Management assigns a cleared date, cleared amount, and status to the transaction. Accounting for the cleared transaction varies by the source. If the transaction is a payment, Payables records the accounting information but you create the accounting entries in Payables. If the transaction is a receipt or a miscellaneous transaction, Receivables automatically generates the accounting entries. If the transaction is an open interface transaction, you must customize the CE_999_PKG package to implement reconciliation accounting. You cannot clear Payroll payments, General Ledger journal entries, or Treasury settlements.

Review and Summarize Results

Once you have completed the reconciliation process, we recommend that you review your reconciliation results. You can review the reports that are printed automatically from the AutoReconciliation program. You can also use the following reports:

Create Accounting Entries in Payables

You can create accounting entries for Payables accounting events in two ways:

After the process completes, Payables produces the Accounting Entries Audit Report and Accounting Entries Exception Report. The exception report lists transactions that could not be accounted because of invalid or missing information.

Prerequisites

Transfer Accounting Entries to Your General Ledger

After you create accounting entries in Payables, submit the Payables Transfer to General Ledger program to send invoice and payment accounting entries to the general ledger interface.

If you use Oracle General Ledger, then you can submit Journal Import, which uses the data in the GL interface to create unposted journal entry batches, headers, and lines. You can then post these journal entry batches, headers, and lines within General Ledger to update your General Ledger account balances. You can submit Journal Import either when you submit the transfer program, or separately, after the transfer process completes. See: Importing Journals, Oracle General Ledger User Guide.

If you do not use General Ledger, you can use the data in the GL interface to create and post journal entries in your general ledger.

Payables retains the accounting entries, so you can continue to review them in Payables. Also, after you post journal entries in Oracle General Ledger, you can drill down to the related accounting entries or transactions in Payables.

About Bank Statements

Cash Management maintains information for each bank statement you want to reconcile. You can use the Cash Management Bank Statement Open Interface to load bank statement information supplied by your bank, or you can enter and update bank statements manually. The system retains all bank statement information for audit and reference purposes, until you purge it.

Each Cash Management bank statement is composed of one bank statement header and multiple bank statement lines. The bank statement header identifies the statement number, bank account number, and statement date. It also contains optional information including the bank and branch names, bank account currency, and control amounts.

Note: If a bank gives you multiple account information on a single bank statement, you must enter a separate Cash Management bank statement for each bank account, for the specific statement date.

Bank Statement Lines

A bank statement line can refer to one or more payments, receipts, cashflows, miscellaneous transactions, open interface transactions, or journal entry lines. Each line has a line number, transaction type, date cleared (bank transaction date), and amount. Optional line information includes the bank transaction code, number, bank transaction identifier (such as the payment or deposit number), currency information (currency code, original amount in transaction currency, exchange rate), value date, agent (customer or supplier), agent bank account, a comment, and a descriptive flexfield for user-defined additional information.

A bank statement line's status can be one of the following:

Bank Statement Error Reconciliation

You can efficiently manage bank errors. You can automatically or manually reconcile correcting statement lines against error statement lines, thereby providing an audit trail you can use to verify correction of bank errors.

For example, if your bank erroneously records a $50 payment as $500, your bank statement may show three statement lines for $500, <$500>, and $50. You can reconcile the <$500> correction against the $500 error statement line, and the $50 statement line against the original payment.

Bank Statement Transaction Codes

Bank statement lines are coded to identify the type of transaction the line represents. Since each bank might use a different set of transaction codes, you need to map each code a your bank uses.

Related Topics

Oracle Payables Reconciliation Accounting

Oracle Receivables Reconciliation Accounting

Reconciling Corrections and Adjustments to Bank Errors

Bank Transaction Codes

Matching Bank Statement Lines with Transactions

Reconciling bank statements in Cash Management has two major steps: matching and clearing.

You can report on reconciliation exceptions, variances, and items that have been matched.

Matching Criteria for Payables Transactions

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

Matching Criteria for Receivables Transactions

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

Matching Criteria for Oracle Payroll Transactions

The Cash Management AutoReconciliation program matches Oracle Payroll manual transactions against bank statement lines if the transactions meet the following criteria:

Matching Criteria for Miscellaneous Transactions

The Cash Management AutoReconciliation program matches miscellaneous transactions if the transactions meet the following criteria:

Matching Criteria for Open Interface Transactions

The Cash Management AutoReconciliation program matches open interface transactions if the transactions meet one of the following criteria:

Matching Criteria for General Ledger Journals

The Cash Management AutoReconciliation program matches General Ledger journal transactions if the transactions meet the following criteria:

Matching Criteria for Cash Management Cashflows

The Cash Management AutoReconciliation program fully matches Cash Management cashflow transactions in the following sequence:

  1. Statement Line ID (for transfers created through the sweep transactions program or transactions created from bank statement lines)

  2. Bank Reference Number, Date, and Amount

  3. Agent Bank Account, Date, and Amount

Note: The transaction amount must be within the reconciliation tolerance.

Related Topics

About Bank Statement Validation

Multi-Currency Handling

Cash Management handles foreign currency transactions during both automatic and manual bank reconciliation.

The following table illustrates the way that Cash Management handles different multi-currency situations. In these examples, the ledger currency is Euro.

In this scenario... if the transaction currency is... and bank account currency is... then the exchange rate is...
Domestic EUR EUR Not needed.
International USD EUR Calculated by Cash Management if you do not provide it.
Foreign USD USD Required.
Foreign Translated USD JPY Not supported in Payables or Receivables.

In order to calculate the exchange rate gains and losses resulting from foreign currency transactions in both the International and Foreign scenarios, the bank statement transaction line must include, in addition to Currency, at least one of the following types of exchange rate information:

Additionally, Cash Management uses the exchange rate information to match foreign currency transactions in a multi-currency bank account.

Manual Reconciliation

When you are entering bank statement lines for manual reconciliation, you can also enter the exchange rate information for each transaction. When you reconcile a Foreign scenario statement line, the statement line exchange rate information is the default for clearing the transaction. When you reconcile an International scenario statement line, the statement line exchange rate information is calculated.

Automatic Reconciliation

Cash Management's AutoReconciliation program performs validation checking of exchange rate information during bank statement import and reconciliation. The program also handles transaction matching differently for International and Foreign scenario transactions. See: Multi-Currency Matching.

Note: For the International scenario, if you don't provide exchange rates with your statement lines and if the cleared amount (ledger currency) matches the paid transaction amount (after conversion to ledger currency), then Cash Management calculates an exchange rate as of the cleared date.

Related Topics

Oracle Payables Reconciliation Accounting

Oracle Receivables Reconciliation Accounting

Importing Bank Statements

Reconciling Bank Statements Automatically

Multi-Currency Matching

Reconciling Bank Statements Manually

Integration with Oracle Receivables, Payables, Payroll, and Treasury

Bank Reconciliation is an integrated application that works with Oracle Receivables, Oracle Payables, Oracle Payroll, and Oracle Treasury.

Integration with Receivables

Cash Management shares functionality with Receivables. Using Cash Management, you can do the following:

Notes:

Integration with Payables

Cash Management integrates with Payables. If you are using Payables, you must use Cash Management to reconcile your payment transactions. Using Cash Management, you can do the following:

Integration with Payroll

Cash Management integrates with Oracle Payroll. Using Cash Management, you can do the following:

Integration with Treasury

Cash Management integrates with Oracle Treasury through the Reconciliation Open Interface. Using Cash Management, you can do the following:

Related Topics

About Bank Reconciliation

About Bank Statements

Oracle Payables Reconciliation Accounting

Oracle Receivables Reconciliation Accounting

Using Oracle Cash Management with Automatic Clearing

Setting Up Oracle Cash Management

Automatic Clearing for Receipts, Oracle Receivables User Guide

Oracle Payables Reconciliation Accounting

With Oracle Cash Management, you can reconcile payments created in Payables to your bank statements. When you reconcile payments using Oracle Cash Management, Cash Management updates the status of payments to Reconciled. If you enable the Account for Payment When Payment Clears option, in the Oracle Payables Options window, Accounting Option tab, Oracle Payables creates reconciliation accounting entries for the following when you submit the Oracle Payables Accounting Process:

Important: You can reconcile foreign currency payments that have no exchange rates. However, Oracle Payables will not create reconciliation accounting entries. If you enter the exchange rate in the GL Daily Rates table and then submit the AutoRate program, Oracle Payables automatically creates the reconciliation accounting entries for payments that were reconciled without exchange rates.

To review payments that have not cleared, you can use the Unclaimed Property Report.

Prerequisite

Define ledgers. See: Defining Ledgers, Oracle General Ledger Implementation Guide.

To set up Oracle Payables for Cash Management integration:

  1. Choose a ledger for each responsibility when you set up your Payables application. You set this primary ledger in the Choose Ledger window in Oracle Payables.

    Payables requires you to choose a ledger for your operating unit (in a multi-organization environment) or for your installation (in a single organization environment).

    Note: The ledger you enter here will be available to choose as the Ledger Name in the Cash Management System Parameters window. See: Choosing a Ledger, Oracle Payables Implementation Guide.

  2. The Account for Payment option in the Payables Options window has the following two check boxes:

    You can select one or both options. To account for payments that you reconcile in Oracle Cash Management, you must select at least the When Payment Clears option. This also allows you to use a cash clearing account and create accounting entries for bank charges, errors, and gains/losses. If you do not enable this option, you can still reconcile payments in Payables, but you cannot create reconciliation accounting entries.

    See: Payables Options, Oracle Payables Implementation Guide.

  3. The Account for Gain/Loss option in the Payables Options window has the following two check boxes:

You can select one or both options. Select at least the When Payment Clears option. You must enable this option to account for the gain or loss between the estimated ledger currency payment amount that was calculated at invoice entry and the actual ledger payment currency amount that was recorded when the bank disbursed funds for the payment.

Clearing Restrictions

ISSUED BILLS PAYABLE: Oracle Cash Management cannot clear bills payable that have a payment status of Issued. Oracle Cash Management clears bills payable only if the payment status is Negotiable. On or after the maturity date of the payment, you can update the status to Negotiable.

Accounting for Gains and Losses

Any accounting entries for gains and losses are controlled by the Payables Option: Account for Gain/Loss. For this option, you can select When Payment is Issued, When Payment Clears, or both. However, if you account for payments at clearing time, you must account for gains and losses at clearing time.

If you use future dated payments, and if you choose to account for gains and losses at payment issue, then Payables also accounts for gains and losses between payment issue and payment maturity.

In Payables, you can view the accounting entries online. See Accounting Options Payables Options, Oracle Payables Implementation Guide.

Note: You must specify exchange rates for foreign currency payments that you want to clear or reconcile.

Miscellaneous Transactions

When you reconcile a bank statement line that has no corresponding payment in Payables, such as bank charges, you can create a miscellaneous payment in Cash Management, and reconcile the bank statement line to the miscellaneous payment. However, miscellaneous payments are actually created as negative receipts in Receivables. See: Receivables Reconciliation Accounting.

Unclearing or Unreconciling a Payment

When you unclear or unreconcile a payment in Cash Management, the payment status reverts to Negotiable and, if you use a Cash Clearing account, the entry that debited the Cash Clearing account and credited the Cash account is reversed. This is called an Unclearing event in Payables, and it is recorded when you account for payments at clearing time.

Related Topics

Oracle Payables Reconciliation Examples

Using Cash Management with Automatic Clearing

Bank Information, Oracle Payables User Guide

Posting in General Ledger, Oracle Payables User Guide

Payables Reconciliation Examples

The following examples illustrate the accounting entries generated when you enter and pay an invoice in Payables, then reconcile the payment through Cash Management.

The first example represents a typical domestic situation where your ledger currency, bank account currency, and payment currency are all the same. The second example represents typical foreign and international scenarios where your payment currency is different from your ledger currency. In the foreign scenario, you pay from a bank account denominated in a foreign currency. In the international scenario, you pay from a multi-currency bank account denominated in your ledger currency.

Note: Both examples assume that Payables accounts for payments at issue time and at clearing time. If Payables is set up to account for payments only once--either at issue time or at clearing time-- then the accounting entries will credit the Cash account directly.

Example 1 - Reconciling a Ledger Currency Payment

You install General Ledger and Payables, and define US dollars (USD) as the ledger 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 ledger currency.

The following table shows the accounting entries for the ledger 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

Example 2 - Reconciling a Foreign Currency Payment

You install Oracle General Ledger and Oracle Payables, and define US dollars as the ledger 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 1,000 Mexican Pesos (MXP) and approve the invoice with a Corporate exchange rate. The Corporate exchange rate on the date you enter the invoice is 9:1. Payables creates accounting entries in both the invoice currency (1,000 MXP) and the ledger currency (111.11 USD).

When you pay the invoice, the exchange rate has increased to 10:1, representing a gain in your ledger currency of 11.11. Payables creates accounting entries in both the payment currency and the ledger currency to record the invoice payment along with the realized gain.

When you reconcile the payment, the exchange rate has increased again, to 11:1, representing an additional gain in your ledger currency of 7.27 USD. Payables calculates and records the gain between payment issue and payment clearing. In this example, it creates an accounting entry for a gain of 7.27 USD. Payables also creates the accounting entries for the cleared payment based on the currency of the bank account. The accounting entries for the Cash Clearing account are recorded in the payment currency and the ledger currency, while the accounting entries for the Cash account, Bank Charges account, and Bank Errors account are recorded in the bank account currency and the ledger currency.

The following table shows the accounting entries for the foreign currency payment in the foreign scenario. This example assumes that you create accounting entries in Payables after each activity.

Activity Accounting Entries
Enter invoice for 1,000 MXP
(exchange rate 9 MXP = 1 USD)
DR Expense 1,000 MXP (111.11 USD)
CR AP Liability 1,000 MXP (111.11 USD)
Pay invoice, taking 200 MXP discount
(exchange rate 10 MXP = 1 USD)
DR AP Liability 1,000 MXP (111.11 USD)
CR Cash Clearing 800 MXP (80 USD)
CR Discount 200 MXP (20 USD)
CR Exchange Rate Gain 0 MXP (11.11 USD)
Reconcile payment with bank statement, including bank charges of 22 MXP (exchange rate 11 MXP = 1 USD) DR Cash Clearing 800 MXP (80 USD)
DR Bank Charges 22 MXP (2 USD)
CR Cash 822 MXP (74.73 USD)
CR Exchange Rate Gain 0 MXP (7.27 USD)

The following table shows the accounting entries for the foreign currency payment in the international scenario. This example assumes that you create accounting entries in Payables after each activity.

Activity Accounting Entries
Enter invoice for 1,000 MXP
(exchange rate 9 MXP = 1 USD)
DR Expense 1,000 MXP (111.11 USD)
CR AP Liability 1,000 MXP (111.11 USD)
Pay invoice, taking 200 MXP discount
(exchange rate 10 MXP = 1 USD)
DR AP Liability 1,000 MXP (111.11 USD)
CR Cash Clearing 800 MXP (80 USD)
CR Discount 200 MXP (20 USD)
CR Exchange Rate Gain 0 MXP (11.11 USD)
Reconcile payment with bank statement, including bank charges of 2 USD
(exchange rate 11 MXP = 1 USD)
DR Cash Clearing 800 MXP (80 USD)
DR Bank Charges 2 USD (2 USD)
CR Cash 74.73 (74.73 USD)
CR Exchange Rate Gain 0 MXP (7.27 USD)

Oracle Receivables Reconciliation Accounting

Oracle Cash Management enables you to reconcile receipts you entered with Receivables against your bank statements.

When you reconcile receipts with Cash Management, it automatically creates accounting entries to the Cash, Remittance, Short-term Debts, and Interest Earned accounts, as applicable to the reconciliation transaction. Cash Management uses the accounts you defined in the Banks window and the Receipt Classes window (Payment Methods region) in Receivables.

You post the accounting entries resulting from Cash Management receipt reconciliation to General Ledger from Receivables.

Miscellaneous Transactions

You can create miscellaneous transactions in Receivables directly from Cash Management, to reflect bank-originated activities. For example, you can record miscellaneous receipts for interest and miscellaneous payments (negative miscellaneous receipts) for charges. You can reconcile these transactions at the time you create them, or later. When you create a miscellaneous transaction, Receivables uses the remittance bank account that you defined for the payment method and the activity GL account or distribution set that you defined for the receivable activity to generate the accounting entries.

Unreconciling a Receipt

When you unreconcile a receipt in Cash Management, it unclears the receipt and returns the amount to the remittance account.

Reversals

If you use Cash Management to reverse reconciled receipts, the system creates reversal entries and reopens the original invoice.

Related Topics

Oracle Receivables Reconciliation Examples

Using Oracle Cash Management with Automatic Clearing

Bank Information, Oracle Payables User Guide

Reversing Receipts, Oracle Receivables User Guide

Receivables Reconciliation Examples

The following examples illustrate the accounting entries generated when you enter a receipt in Oracle Receivables, then reconcile it through Cash Management.

The first example represents a domestic situation where your ledger currency, bank account, and receipt currency are the same. The second example represents international and foreign situations where your bank account currency may differ from your receipt currency. In the foreign case, you remit funds into a bank account denominated in a foreign currency. In the international case, you remit into a multi-currency bank account denominated in your ledger currency.

Example 1 - Reconciling a Ledger Currency Receipt

You install Oracle General Ledger and Oracle Receivables, and define US Dollars as the ledger 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 ledger currency.

The following table shows the reconciling of a ledger currency receipt:

Activity Accounting Entries
Enter invoice for 100 USD DR Accounts Receivable 100 USD
CR Revenue 100 USD
Enter receipt for 100 USD
(see note)
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

Note: If the Remittance Method had been set to Standard, this entry would have been a debit to the confirmation account and a credit to accounts receivable. When the receipt was remitted to the bank, there would be another entry to debit the remittance account and credit the confirmation account.

Example 2 - Reconciling a Foreign Currency Receipt

You install Oracle General Ledger and Oracle Receivables and define US dollars (USD) as the ledger currency for your ledger. You enter Accrual Basis as your accounting method. You enter an invoice for 120 Fiji dollars (FJD), with a corporate exchange rate. The exchange rate on the date you enter the invoice is 2:1. When you post the invoice, Oracle Receivables transfers journal information in both your foreign currency (120 FJD) and your ledger currency (60 USD) and Journal Import creates a journal entry in your ledger currency.

You receive a payment from your customer for 120 FJD. 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

On the receipt date, the exchange rate has increased to 3:1, representing a loss in your ledger currency of 20 USD. You transfer your receipt information to your general ledger and Journal Import creates a journal entry to record the receipt along with the realized loss.

When you reconcile the receipt, the exchange rate has again increased, to 4:1, representing a loss in your ledger currency of 10 USD. When you transfer your reconciliation information to your general ledger, the Journal Import function creates a journal entry to record the reconciled receipt along with the realized loss.

The following table shows the reconciling of a foreign currency receipt: This example assumes that you post from Receivables to General Ledger after each activity.

Activity Accounting Entries
Enter invoice for 120 FJD
(exchange rate: 2 FJD = 1 USD)
DR Accounts Receivable 120 FJD (60 USD)
CR Revenue 120 FJD (60 USD)
Enter receipt for 120 FJD
(exchange rate: 3 FJD = 1 USD)
DR Remittance account 120 FJD (40 USD)
DR Exchange Loss 0 FJD (20 USD)
CR Accounts Receivable 120 FJD
(60 USD)
Reconcile receipt with bank statement, including bank charges of 4 FJD (exchange rate: 4 FJD = 1 USD) DR Cash 116 FJD (29 USD)
DR Bank Charges 4 FJD (1 USD)
DR Exchange Loss 0 FJD (10 USD)
CR Remittance account 120 FJD (40 USD)

Using Cash Management with Automatic Clearing

In addition to Cash Management, you can use Automatic Clearing to clear receipts in Oracle Receivables. However, unlike Cash Management, Automatic Clearing in Receivables is date-driven and does no matching to bank statements.

If you use Automatic Clearing within Receivables, you can choose whether to clear remitted receipts after they have matured, and whether you want to clear or eliminate risk for factored receipts. You can match automatically cleared receipts with bank statement lines in Cash Management.

If the amount that was automatically cleared equals the statement line amount, no further accounting takes place. Receivables handles any cases where the automatically cleared amount differs from the amount cleared at reconciliation.

If you use Automatic Clearing only to eliminate risk for factored receipts, there are no special considerations. However, if you use Automatic Clearing to clear receipts rather than using Cash Management, your general ledger balance may not match your Cash Management reports. For example, the GL Reconciliation Report will not show correct results if you clear the receipts with Automatic Clearing in Receivables. For this reason, we recommend that you use Cash Management to clear your receipts.

Example of Reconciliation with Automatic Clearing

You have set up an automatic receipt for 100 FJD, with an exchange rate of 4 FJD to 1 USD. On its clearing date, the Automatic Clearing program clears the receipt for 100 FJD (25 USD). The Receipt Class for this receipt has the following options:

Creation Method: Automatic
Require Confirmation: No
Remittance Method: No Remittance
Clearance Method: By Automatic Clearing

Your bank statement shows that the receipt cleared for 100 FJD, with an exchange rate of 2 FJD to 1 USD, representing a gain in your ledger currency of 25 USD.

When you transfer your receipt information to Oracle General Ledger, Journal Import creates a journal entry to record the reconciled receipt along with the realized gain.

The following table shows the reconciling of automatically cleared receipts:

Activity Accounting Entries
Enter invoice for 100 FJD
(exchange rate: 4 FJD = 1 USD)
DR Accounts Receivable 100 FJD (25 USD)
CR Revenue 100 FJD (25 USD)
Enter receipt for 100 FJD
(exchange rate: 4 FJD = 1 USD)
DR Remittance account 100 FJD (25 USD)
CR Accounts Receivable 100 FJD (25 USD)
Clear receipt using Automatic Clearing DR Cash 100 FJD (25 USD)
CR Remittance account 100 FJD (25 USD)
Reconcile receipt with bank statement DR Cash 0 FJD (25 USD)
CR Exchange Gain 0 FJD (25 USD)

Related Topics

Oracle Receivables Reconciliation Accounting

Oracle Payables Reconciliation Accounting

Oracle Payroll Reconciliation

You can reconcile manual as well as EFT payments from Oracle Payroll against your bank statements.

Secured Payroll Transactions

Security for payroll bank accounts is established by the Bank Account Security Access profile option. Using this profile option, you can grant access to bank account information at three levels: All, Internal, and Payroll.

Third Party Payments

When payments are made to third parties, for purposes such as wage garnishment or child support payments, you can reconcile them using the same matching criteria as payroll payments.

Tracking Reconciled Payments

You can track payroll and third party payments that have been reconciled. When you access the record of a reconciled payment, the information available to you includes the amount cleared, the clearance date, and the general ledger transaction date.

Voided Payments

Payroll and third party payments that have been voided, but appear on the bank statement as having been paid, will not be automatically reconciled. The bank statement line that refers to these payments will be marked with an error message that identifies the payments as voided.

Discrepancies in Amounts

When payroll or third party payments show amounts that are different from the amounts on the corresponding bank statement line, Cash Management will not automatically reconcile the payments. The bank statement line that refers to these payments will be marked with an error message that shows that the transaction amount is different from the payment amount.

Multiple Views

You can select different views of payroll and third party payments, including:

Oracle Treasury Reconciliation

You can reconcile settlements from Oracle Treasury, including sweep transactions, against you bank statements.

Treasury Settlements as Open Interface Transactions

Oracle Cash Management uses the Reconciliation Open Interface to reconcile Treasury settlements. Treasury settlements appear as open interface transactions in Cash Management windows and reports. If you already reconcile open interface transactions from your proprietary applications, you can use the Reconciliation Open Interface to reconcile Treasury settlements as well as the external transactions.

Matching Criteria of Date and Amount

If you want to automatically reconcile bank statements against Treasury settlements, you must choose the matching criteria of date and amount. Under this matching condition, a bank statement line is reconciled to a settlement only if the bank statement line date is the same as the transaction date and the amounts are within tolerance. The bank statement line cannot be reconciled if no match is found or if multiple matches are found.

Amount Differences

When you reconcile Treasury settlements by date and amount, differences between the bank statement line amount and the transaction amount may occur. You must manually create exposure transactions in Oracle Treasury to account for these differences.

About Cash Forecasting

Cash forecasting is a planning tool that helps you anticipate the flow of cash in and out of your business, allowing you to project your cash needs and evaluate your company's liquidity position.

Using sources from other Oracle Applications and from external systems, you can generate cash forecasts from previously-defined cash forecast templates. You can choose whether to forecast by days or GL periods, and choose how to organize each template with multiple sources and levels of detail. Automatic integration with Oracle Applications and other spreadsheet applications provides you with enterprise-wide cash information and management.

You create cash forecast templates, from which you can generate periodic cash forecasts projecting your cash flow. Once you have generated a cash forecast, you can modify, query, and report on it, and easily export it to any spreadsheet application.

You can create an unlimited number of cash forecasts. A cash forecast is in a spreadsheet format, including rows (cash inflow or outflow source types) and columns (forecasting periods). At the intersection of each row and column are cells containing forecast amounts.

You can create forecasts using data across organizations, and in any currency. You can also use cash forecasting to help determine your degree of currency exposure.

You have the flexibility to include or exclude overdue transactions for all appropriate source transaction types in your forecasts.

Cash inflow information is immediately accessible to the cash forecast process in Oracle Cash Management from Oracle Receivables, Oracle Order Management, Oracle Sales, Oracle General Ledger, and Oracle Treasury. Cash outflow information comes from Oracle Payables, Oracle Purchasing, Oracle Payroll, Oracle General Ledger, and Oracle Treasury. In addition, cash flow information from Oracle Projects and other Oracle Applications that store Projects-related information is also immediately accessible to the cash forecast process, enabling you to generate a forecast for a project. Using the External Cashflow Open Interface, you can also include cash flows from external systems.

Oracle Applications Integration with Cash Forecasting

Automatic integration with Oracle Applications provides you with enterprise-wide cash information. All source types, except for User-defined and Open Interface Inflows and Outflows, supply data from other Oracle Applications to a cash forecast.

The following table contains details on various cash inflow source types. For details on Oracle Projects source types, see: Oracle Projects Integration with Cash Forecasting.

Source Source Type Description
Receivables Customer Invoices Unpaid invoices
Receivables Customer Receipts (Historical) Cleared cash receipts, excluding reversed receipts
Receivables Customer Receipts (Future) Uncleared cash receipts, excluding reversed receipts
Order Entry Sales Orders Uninvoiced sales orders that are projected to be paid by customer excluding commitments
Sales Sales Opportunities Sales opportunities that have not yet been ordered/invoiced
General Ledger GL Budgets Revenue account budget amounts
Treasury Treasury Transactions Money market, foreign exchange, and exposure transactions.
External Source Open Interface Inflow External forecast source inflow transactions
User User-defined Inflow Manually entered forecast amounts

The following table contains details on various cash outflow source types. For details on Oracle Projects source types, see: Oracle Projects Integration with Cash Forecasting.

Source Source Type Description
Payables Supplier Invoices Unpaid invoices, excluding prepayments
Payables Supplier Payments (Historical) Cleared disbursements, excluding void payments
Payables Supplier Payments (Future) Uncleared disbursements, excluding void payments
Payables Expense Reports Expense reports that have not been invoiced
Payroll Payroll Expenses (Historical) Paid payroll
Purchasing Purchase Orders Uninvoiced purchase orders
Purchasing Purchase Requisitions Unordered requisitions
General Ledger GL Encumbrances Unused portion of encumbered amounts for expenses and assets
General Ledger GL Budgets Expense account budget amounts
Treasury Treasury Transactions Money market, foreign exchange, and exposure transactions
External Source Open Interface Outflow Outflow transactions from external sources
User User-defined Outflow Manually entered forecast amounts

Oracle Projects Integration With Cash Forecasting

Cash Management's Cash Forecasting captures cash flow information from Oracle Projects. It also captures cash flow information from these other Oracle applications that store Projects-related information: Oracle Purchasing, Oracle Receivables, Oracle Order Management, and Oracle Payables.

By integrating Oracle Projects with Cash Forecasting, you can define and generate a cash forecast for a specific project. You can do the following:

The following table contains details on cash inflow source types to use for Oracle Projects:

Source Source Type Description
Receivables and Projects Customer Invoices Unpaid customer invoices for a project, and customer invoices in Projects that have been released but have not been transferred to Receivables.
Projects Project Billing Events Events with invoicing impact that have not been released
Projects Project Inflow Budgets Inflow budgets that you enter
Order Entry Sales Orders Uninvoiced sales orders for a project

The following table contains details on cash outflow source types to use for Oracle Projects:

Source Source Type Description
Payables Supplier Invoices Unpaid Projects-related supplier invoices projected to be paid (supplier and expense reports invoices)
Payables and Projects Expense Reports Uninvoiced expense reports entered in Projects that have been transferred to Payables, and released expense reports in Projects that have not been transferred to Payables
Projects Project Transactions Usages, labor, and miscellaneous transactions
Projects Project Outflow Budgets Outflow budgets that you enter
Purchasing Purchase Orders Projects-related uninvoiced purchase orders
Purchasing Requisitions Projects-related unordered requisitions

External Cashflow Open Interface and Distributed Database Integration

Cash Forecasting allows you to utilize external sources of data as cash inflow and outflow data for the Cash Forecasting feature, providing you an enterprise-wide cash forecasting solution on a distributed database environment.

You can generate a cash forecast that automatically includes cash flows from local and remote databases.

Cash Forecast Reporting and Spreadsheet Integration

Cash Management lets you view cash forecast information online in a spreadsheet format, with the forecast periods in columns and the sources in rows. The Cash Forecast Report uses Oracle Report eXchange to allow you to export your cash forecast data to the spreadsheet application of your choice. You can also print the Cash Forecast Report to review your forecasts.

Related Topics

Cash Forecasting

External Cashflow Open Interface