Oracle Applications 11i

Cash Management System

A Presentation by EAS – Oracle Applications

July 2003

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 Oracle Cash Management
Oracle Cash Management (CM) is an enterprise cash management solution that helps one to effectively
manage and control cash cycle of the enterprise in order to ensure liquidity and improve profitability.
Major Features:
 Enterprise Cash Forecasting
 Efficient Bank Reconciliation
 Extensive Multi-Currency Capabilities
 Up-to-date Cash Balance Information
 Integrated with Other Sub-Ledgers and open interfaces for integration with external systems.
Business Requirements:
 Bank Reconciliation:
To determine whether the bank balances in Oracle Financials matches with the balance as per
Bank Statement.
 Cash Forecasting:
Uses the above reconciliation to predict balances for any time period.
Why CM is required?
 Improved overall profitability – Invest surplus cash
 Reduced risk of currency exposure – balance future inflow and outflow currency-wise and period-wise
 Prevention of finance charges – anticipate insufficient cash flow situations
 Liquidity analysis tool to prepare accurate cash forecasts quickly.

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Cash Management Process

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 CM – Bank Reconciliation
Bank accounts are the assets of the company and must be explained as part of the audit requirements.
Bank reconciliation can reveal fraud as well as errors.
Reconciliation is the process of explaining the difference between two balances which could be due
to legitimate reasons like timing differences.
Bank Reconciliation uses the following formula:
Bank Account Balance in Oracle Financials + Items on Bank Statement, but not in Financials
Items in Financials, but not on Bank Statement = Balance as per Bank Statement
Both types of differences are to be analyzed to determine whether the source of discrepancy was error or
a legitimate difference and action initiated accordingly.
Legitimate differences occur due to the following reasons:
Timing differences – Check Issued but not presented or Checks Deposited but not cleared.
Bank charges and other items unknown till the bank statement is received.
Fees for currency conversion
Unprocessed Transactions
These differences once identified have to be eliminated by making appropriate accounting entries.

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Reconciliation Overview

Receive bank Load and verify Perform

statement bank statement reconciliation

Post to general Review and summarize results

ledger

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Reconciliation Integration

Oracle Cash
Management

Oracle
Payroll External
Oracle Oracle Oracle General
systems
Payables Receivables Ledger

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 CM – Reconciliation Process
Bank transactions entered directly into GL or generated from Payables, Receivables or Payroll can be
reconciled with CM.
 Loading the Bank Statement:
The transactions can be reconciled manually or automatically by loading an electronic statement directly
into CM. Loading is done using the bank statement open interface where a bank statement in the
requisite flat file format is uploaded into CM tables. The automatic reconciliation looks for certain match
criteria to determine whether a transaction and a bank statement line are one and the same.
 Reconciling Journal Entries:
The journal entries entered directly in GL can be reconciled with the bank statement. The Auto reconciliation
program matches a journal line description with the bank statement line transaction number.
 Reconciling Payments:
Supplier payments entered in Payables can be reconciled to the bank statement lines in CM. The payment
status against each check is updated as “Reconciled”.
 Reconciling Receipts:
Receipts created in Receivables can also be reconciled to the bank statement lines in CM. CM updates
the status of the receipts to “Reconciled” and creates appropriate accounting entries for transferring to GL.
Payables and Receivables can generate reconciliation accounting entries for cash clearing, bank charges
and foreign currency gain or loss.
 Reconciling other Transactions:
Certain transactions like bank charges, interest credits, specific exchange rate applied against foreign
currency transactions, customer receipts returned due to bounces etc, are known only when the bank
statement is received. These would not have been initiated from Oracle Applications. CM is the primary
point of entry for these transactions.
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CM – Loading Bank Statements

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Bank Statement Open Interface
Header

Bank file Import program

Lines

Bank statement
open interface
tables

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Bank Statement Open Interface (Contd…)
Select Bank Account
No, Name, Currency,
Bank Statement No.

These reflect the Summary

information of the Bank
Account in Financials and
the Bank Statement Click to view
Lines

Click to
View the
Error Lines

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Bank Statement Open Interface (Contd…)
The closing date of the
bank statement.

Amounts:
Amount: The amount of the transaction, in the bank account currency.
Charges: The amount of any bank charges associated with the transaction.
Original Amount: The statement line amount, in its Original currency.
Exchange :
Currency: The currency of the transaction.
Date: The date associated with the exchange rate that was used.
Type: The exchange rate type
Rate: The exchange rate specified by the bank
Reference:
Agent: The customer or supplier.
Agent Bank Account: The bank account number of the customer/supplier
Invoice: invoice number
Description:
Effective Date: The value date for the transaction.
Description: Any other Information provided by the bank.
Line Number: The line number provided by the bank.
Code: The code that the bank uses to identify a transaction.
Number: The transaction number, Automatic Reconciliation uses this
number to identify transactions when matching the bank transaction to a
transaction or batch.
Date: The date that the transaction cleared the bank. The default is
the statement date.

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Bank Statement Interface Errors
Incorrect Oracle Cash
Management setup

Interface
tables
Bank
Bank Transmission errors

Interface
Bank File
tables
Errors in SQL*Loader
File
SQL*Loader
Interface
tables

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CM- Importing Bank Statements and Validation

Use CM’s Reconciliation programs to:

• Validate the information in the bank statement open interface tables
• Import the validated bank statement information
• Perform an automatic reconciliation after the import process completes
The AutoReconciliation program performs the following validations on loading bank
statement information into the bank statement open interface tables:
• Bank statement header validation
• Control total validation
• Statement line validation
• Multicurrency validation

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 CM- Bank Statements Window
Select Bank Account No, Name, Currency,
Bank Statement No, Closing Dt of the
Bank Statement ,the document number that
appears on the bank statement

These reflect the

Summary
information of
the Bank
Statement
These reflect the Summary
information of the Bank Account
in Financials

Check this field to indicate that the

bank statement is complete and to
prevent any changes to it.

Error: To view and rectify Error Lines

Reversals: To reverse a receipt. Mark the receipt to be reversed, by checking
the box to the left of the receipt information. and Choose Reverse Receipt to
generate the reversing transaction.
Reconciled: To review reconciled items.
Available: To find lines which are available for reconciliation
Lines: To view/enter the Bank Statement Lines.

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CM – Entering/Viewing Bank Statement Lines

The transaction types:

Payment: Payments, such as generated or recorded checks, wire
transfers, and electronic funds transfers.
Receipt: Receipts, such as received checks, direct debits, and bills of
exchange.
Enter the Unique Line No, Transaction Type, Bank Miscellaneous Payment / Receipt : Payments / Receipt not associated
Transaction Code/Instrument No (for Auto Reconcile), with supplier / customer invoices
Transaction Date, Value Date and Amount Stopped: Stopped payments previously entered, generated, or cleared
Rejected: Receipts rejected for reasons other than non-sufficient funds
To check and Correct Error lines, Reconciled Items and Find NSF: Receipts rejected by the bank due to non-sufficient funds
Available Lines for Reconciliation.

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CM - AutoReconciliation Overview

Run Review Identify reconciliation

AutoReconciliation AutoReconciliation errors
program Execution report

Reconcile manually Correct errors and run

(if necessary) AutoReconciliation
program

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CM – Auto Reconciliation Process
Reconciling Bank Statements Automatically
Use AutoReconciliation program to automatically reconcile any bank statement in Oracle CM. There are three versions:
AutoReconciliation: Use this program to reconcile any bank statement that has already been entered in CM.
Bank Statement Import: Use this program to import an electronic bank statement after loading the bank file with a
SQL*Loader script. .
Bank Statement Import and AutoReconciliation: Use this program to import and reconcile a bank statement in the
same
run.
After the program has been run, review the AutoReconciliation Execution Report to identify any reconciliation errors
that need to be corrected and re-run the program again if corrections are done.

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CM – Auto Reconciliation

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CM- Submitting Auto Reconcile

On selecting Auto Reconcile Reconcile Bank Statements

window, this window populates. One can choose to Import,
Reconcile Only, or Import and Reconcile.
Select the GL Date, Receivable Activity, Payment Method,
and NSF Handling.
When the concurrent request is finished, review the
AutoReconciliation Execution Report for reconciliation
errors.
Review the Bank Statement Detail Report, which shows
reconciled and unreconciled statement lines.
If any statement lines remained unreconciled, or you need to
correct a reconciled line, use the Bank Statement Lines
window to manually reconcile those lines.

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CM- Manual Reconciliation Process

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CM- Manual Reconciliation

Use the Find Transactions window to

locate detail or batch transactions that
Detail: to select one or more types to find
are available for reconciliation.
detail transactions that match criteria.
Batch: to find batches that match criteria.
Open Interfaces: to find open interface Transaction: to enter ranges of transaction
Numbers, Dates, Amounts, Maturity Dates,
transactions
Batch Names, and Remittance Numbers to find
only transactions within those ranges.
Agent: to enter a Customer/Supplier Name
and Customer/Supplier No to use when finding
Receivables/Payables transactions.
Receipt: to enter a Reference Type, Reference
No, Receipt Class, Payment Method, or
Deposit Dates to use when
finding miscellaneous transactions.
Journal: to enter a Period Name, Journal
Entry Name, Document Number, or Line
Number to use when finding journal
Choose Find to find all batches that entries.
match search criteria, or Find and Ordering: The sort criteria determines how
the resulting transactions are displayed in the
Mark to find and automatically mark, Available Transactions
for reconciliation, the transactions Window.
within any matching batches.

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CM – Manual Reconciliation (Contd..)
Reconciling Available Transactions
Transaction: to review the transactions and Batches: After locating detail or
and journal entries shown. batch transactions that are available for
Exchange: to review the exchange rate reconciliation, mark the specific items
information about the transactions.
that are to be reconciled.
Reference: to review additional
descriptive
information about the transactions and
journal entries.

Click to Reconcile the selected item.

Select the item to be CM shows the Amount Reconciled and the Amount Remaining to be
reconciled. reconciled for the current bank statement line. After reconciliation, the
amount reconciled for the bank statement line should be the same as the
entered amount. Later on the amount can be unreconciled if any error
has occurred /wrong line has been selected.

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CM – Entering Reversals
Enter the Parameters to
find the receipt for
reversal.

One can reverse receipt transactions to

account for NSF and rejected receipts.
One create a Standard reversal or a
debit memo reversal for the full
amount of the receipt.

Click to reverse the

Select the item to be
receipt.
reversed.

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CM – Manual Clearing

Mark each transaction

that to be cleared /
uncleared by checking One can manually clear / unclear
this box. receipts, payments, and miscellaneous
transactions without first reconciling
them from the Find Clear / Unclear
Transactions window.

Choose the Clear/Unclear Transaction button to

clear/unclear the selected transactions.
This Tab will appear as Unclear when entering
from the Find Unclear window.

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 CM – Cash Forecasting
Why Cash Forecasting?
 To analyze liquidity across the entire business.
 To prepare accurate cash forecasts and analyze currency exposure.
 To forecast in any currency, across different organizations in the enterprise and for
multiple time periods.
 To make informed financing and investment decisions.

 Cash forecasting depends on up-to-date banking information and relevant information

from operational systems.

 Cash forecasting takes cash position as at today and rolls the balance forward to a future
period by adding predicted cash inflow and subtracting predicted cash outflow.

 Forecast covers future transactions such as orders and invoices, or historical transactions
such as payments, receipts and payroll.

 Forecasting is built on cash forecast templates which determines the period of forecast,
sources of forecast and the level of detail required.

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 Cash Forecasting Overview
Cash Outflow Sources Cash Inflow Sources
Oracle Oracle
Payables Receivables

Oracle Oracle
Purchasing Order
Management
Oracle Oracle
Payroll General
Ledger
Oracle
Cash Oracle
General
Ledger forecast Treasury
Oracle
Oracle
Projects
Projects
Oracle
External Sales
Systems
External
Systems
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Generating a Cash Forecast
1. Define a forecast template.

2. Choose the relevant source type or

parameters.

3. Submit the forecast.

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 CM – Creating Cash Forecast

Enter a unique name, a forecast period type of Days or GL Periods& description for
template.
Include or Exclude Overdue Transactions to determine whether to include or exclude
open transactions that have a cash activity date before the forecast start date. To
include overdue transactions, enter a value in the Cutoff Period field. The cutoff Enter a Column No to specify the sequence of the
period determines how far back to include overdue transactions. columns (forecast periods).
Enter the From and To specifications as periods or days,
depending on what was entered in the Forecast by Field.
The values must be integers between 1 and 999. These
numbers define the forecast periods by indicating the
specific date or period ranges for each column.

For each row enter the following:

Row Number to specify the sequence of the
source types.
Source: Enter relevant selection criteria for
the source type chosen.

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CM – Generating Cash Forecast
Submit Forecast Parameters
Forecast By. The forecast period type used to run the
cash forecast.
Template Name. The forecast template used to create a
new forecast.
Forecast Name. The unique forecast name for this cash
forecast.
Calendar Name. The name of the GL accounting
calendar, used only when submitting a forecast by GL
Period.
Start Period and Start Date. The accounting period to
begin the forecast, or the day to begin the forecast.
Start/End Project. The beginning/ending no for the
range of projects to include in the forecast. Cash
Forecast Currency. The currency in which the forecast
amounts are to be displayed.
Source Currency Type. The currency type for the
sources in the cash forecast: Source Currency. The
currency for the source transactions.
Exchange Date and Exchange Type. These fields are
required if the Forecast Currency and the Source
Currency are not the same.
Exchange Rate. The user–defined currency exchange rate
Amount Threshold. The min value of individual
transactions to be included in the forecast, to omit
insignificant transaction amounts from the forecast.
Row Number From/To. A list of values provides you
with a choice to run a partial forecast for sequential rows
of the template you entered.
Request by Row. Check this check box to submit a
separate concurrent request for each row, so that the rows
One can create a cash forecast using the Submit for the forecast are generated
Forecast window or the Submit Request concurrently.
window: Cash Forecasting by GL Periods or
Cash Forecasting by
Days.

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 Multicurrency Forecasts
You can select one of the following options at
submission time:

• Generate a forecast in any currency

• Analyze currency exposure by choosing to forecast

transactions entered in a specified currency

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Changes Allowed in Cash Forecast Templates and Cash Forecasts

Change Add Rows and Delete Rows Change

Descriptive Columns and Columns Forecast
Information Amounts
New Yes Yes Yes N/A
Templates

Templates Yes Yes, but will Yes, but will N/A

Used to modify all existing modify all
Generate forecasts based on existing
Forecasts this template forecasts
based on this
template

Forecasts Yes Yes, with an option No Yes, will

to modify original modify values
template and all directly in
existing forecasts fields, or will
based on that use the Tools
template; or to menu.
create new
template

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Implementation Considerations for Cash Forecasting

• Identify who will be responsible for creating the

templates, and how many will be needed.
• Identify the correct sources, transaction types, and
parameters.
• Identify security issues: Who has access to
forecasts?
• Identify any lead time requirements.
• Identify any unique naming conventions.
• Verify the forecast numbers before moving the
forecast template to production.

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 Cash Forecasting Based on
Expense Reports

Oracle Projects Oracle Payables Self Service Expenses

Cash
forecast
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 CM – Interfaces
 Bank Statement Open interface:
The bank statements in the requisite flat file format can be loaded directly into CM using the
Bank Statement Open interface. This interface validates the bank account and currency code
in the header. Control totals also can be used. Statement lines with errors can be corrected
in the Statement Interface window. The Bank Statement Open Interface consists of two
bank statement open interface tables:
• Bank Statement Headers Interface Table - CE_STATEMENT_HEADERS_INT_ALL
• Bank Statement Lines Interface Table - CE_STATEMENT_LINES_INTERFACE

 Reconciliation Open Interface:

One simply defines a database view or a table that CM can use to access the payment and
receipts in the external system. CM executes custom reconciliation logic when the external
transaction is reconciled.

 Forecasting Open Interface:

This supports cash forecasting in a distributed database environment, allowing one to
combine relevant transaction information from both local and remote databases.

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 CM- Data Tables
CM uses receipts and payment information held in Receivables and Payables
respectively. Bank statement headers and lines are held in the following two
tables:

Table Purpose

CE_STATEMENT_HEADERS_ALL Holds one row for each separate bank

statement.
CE_STATEMENT_LINES Holds one row for each line on a bank
statement.

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 Q&A

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