Cash Management
Introduction
1.
Oracle Cash Management is an enterprise wide
solution for managing liquidity and controlling cash.
2.
Cash Management gives you direct access to
expected cash flows from your operational systems.
3.
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
ü
Forecast cash flows in any currency and in
multiple time periods
ü
streamline the reconciliation process
ü
Monitor for exceptions and fraud
ü
Forecast based on historical or future
transactions
ü
Manage the cash cycle efficiently and with
control
Cash Management
Integration
v
Cash Management is integrated with Payables,
Receivables and General Ledger.
v
Payables: Payments information automatically
transfers to CM without any process.
v
Receivables: to transfer Receipts information to
CM remittance process is required.
v
From AR only remitted eligibility transactions
will transfer to CM.
v
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 purposes
1.
Reconciliation
2.
Forecasting
Forecasting is used to identify the future cash inflows and
outflows of an Organization.
Reconciliation:
o
Normally at the end of every period, the entries
in the cash book are compared with entries in the pass book.
o
The exact causes of differences are scrutinized
and then bank reconciliation statement is prepared.
o
Necessary suitable entries will passed in the
cash book.
Reconciliation
process is 3 types:
1. Manual
Clearing Process
2. Manual
Reconciliation
3. 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 Process
Automatic 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.
CASH MANAGEMENT
REPORTS
1. AUTO
RECONSILIATION
2. BANK
STATEMENT DETAIL REPORT
3. BANK
STATEMENT IMPORT EXECUTION REPORT
4. BANK
STATEMENT SUMMARY REPORT
5. BATCHES
AVAILABLE FOR RECONSILIATION
6. CASH
FORECAST REPORT
7. CASH IN
TRANSIT REPORT
8. CLEARED
THE TRANSACTION REPORT
9. GL
RECONSILIATION REPORT
10. TRANSACTION
AVAILABLE FOR RECONSILATION REPORT
11. UNRECONSILED
BANK STATEMENT
Cash Management period closing
procedures
Ensure the following
before closing the Payables & Receivables.
Ø
Any reconciliation transactions created by Cash
Management are properly entered.
Ø
Account balances
are updated.
Ø
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.
