Cash Management: Cash Cycle

Cash Management: Cash Cycle

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.

Oracle Cash Management is used to reconcile transactions on the (electronic) bank statements against recorded transactions in Accounts Payables and Accounts Receivables. You can also create miscellaneous transactions for bank-originated entries, such as bank charges and interest 

The Bank Reconciliation function enables you to eliminate errors and control cash outflow. Financial audits require that you should reconcile your bank accounts with bank statements to locate errors and frauds. For this reason, you should reconcile your bank account with the bank statement every time the bank sends you a statement. The Oracle Cash Management system's bank reconciliation function enables you to identify and fix the causes of non-reconciliation of bank balances with bank statements and enables you to maintain accurate cash balances.

Since Cash Management doesn’t have an own posting into GL, all transactions go through Accounts Payables or Accounts Receivables. The “Miscellaneous Transactions” will flow through Accounts Receivables into GL. 

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 (SWIFT MT940) 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.

Auto-Reconciliation needs the imported bank statement line to pass these checks:

·         The currency code on the statement line must be defined in the system.

·         The bank transactions code must be defined.

·         The exchange rate type must be of valid type defined.

·         The amount must be entered for the statement.

·         Multi-Currency Validation

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:

o    Automatic- Bank statement details are automatically matched and reconciled with system transactions. This method is ideally suited for bank accounts that have a high volume of transactions.

o    Manual- This method requires you to manually match bank statement details with system transactions. The method is ideally suited to reconciling bank accounts that have a small volume of monthly transactions. You can also use the manual reconciliation method to reconcile any bank statement details that could not be reconciled automatically

The Bank Statement Open Interface table consists of two tables:

·         The Bank Statement Headers Interface Table: Contains header-level information. The name of the table is CE_STATEMENT_HEADERS_INT_ALL. This table must contain exactly one record for each bank account within a bank statement.

·         The Bank Statement Lines Interface Table: Contains transaction-level information from the bank statement. This table is named CE_STATEMENT_LINES_INTERFACE.

Run the Bank Statement Import Program, which is a concurrent program, to transfer the information from the interface tables to the bank statement tables in Oracle Cash Management.