Multi-Currency Matching (Oracle Cash Management User's Guide)


	Previous	Next		Contents	Index	Navigation	Glossary	Library

Multi-Currency Matching

Bank statement lines must include an exchange rate when the transaction currency is foreign and the same as the bank account currency, and you are using automatic reconciliation. The AutoReconciliation program handles statement line matching to transactions differently, depending on the bank account currency.

Notes:

The transaction amount is the amount recorded in Receivables or Payables.

The tolerance amount in the system parameters is always in the functional currency.

The minimum of the percent and amount tolerance is used as the actual tolerance.

Bank Account Currency is Functional (International Scenario)

Cash Management compares the transaction base amount to the bank statement line amount. They must be equal or within the tolerance range.

The following table shows how Cash Management validates tolerances in the international scenario:

Receipt in Oracle System In Bank Statement

Bank account currency = USD

Functional currency = USD
Transaction amount = CAD 200
Transaction exchange rate = 0.75
Transaction base amount = USD 150
Tolerance = USD 10
Statement line amount = USD 145

Is this a match?
Tolerance amount = USD 10
Statement line amount = USD 145
Yes, since |(145-150)| < 10

Receipt in Oracle System	In Bank Statement
Bank account currency = USD
Functional currency = USD Transaction amount = CAD 200 Transaction exchange rate = 0.75 Transaction base amount = USD 150 Tolerance = USD 10	Statement line amount = USD 145
Is this a match? Tolerance amount = USD 10 Statement line amount = USD 145 Yes, since \|(145-150)\| < 10

Bank Account Currency is Foreign (Foreign Scenario)

Tolerance validation is in two steps.

1. Cash Management converts the tolerance into the bank account currency using the bank statement exchange rate provided, and verifies that the difference between the statement line amount and the transaction amount is within the tolerance range.

2. Cash Management then uses the original tolerance amount to compare the bank statement line amount with the transaction amount (in the functional currency), checking again to see if the difference is within the tolerance range. The bank statement line amount must match the transaction line amount within the tolerance limit for automatic validation to succeed. If the difference in either case exceeds the tolerance amount, Cash Management gives an error message and you must manually reconcile the bank statement line.

The following table shows how foreign scenario tolerances are validated, and demonstrates one match failing.

Receipt in Oracle System In Bank Statement

Bank account currency = CAD

Functional currency = USD
Transaction amount = CAD 100
Transaction exchange rate = 0.75
Transaction base amount = USD 75
Tolerance = USD 10
Statement line amount = CAD 120
Exchange rate = 0.6

Is this a match in bank account currency?
Tolerance amount in CAD = 10/0.6 = 16.67
No, since |(120-100)| > 16.67

Is this a match in functional currency?
Tolerance amount = USD 10
Statement line amount = (120*0.6) = USD 72
Yes, since |(72-75)| < 10

Receipt in Oracle System	In Bank Statement
Bank account currency = CAD
Functional currency = USD Transaction amount = CAD 100 Transaction exchange rate = 0.75 Transaction base amount = USD 75 Tolerance = USD 10	Statement line amount = CAD 120 Exchange rate = 0.6
Is this a match in bank account currency? Tolerance amount in CAD = 10/0.6 = 16.67 No, since \|(120-100)\| > 16.67
Is this a match in functional currency? Tolerance amount = USD 10 Statement line amount = (120*0.6) = USD 72 Yes, since \|(72-75)\| < 10

Note: If matching fails, you need to manually reconcile the bank statement line using the Reconcile Bank Statements window.

Contents

Index

Navigation

Glossary

Library