Oracle Cash Management Introduction

 

Oracle Cash Management

Oracle Cash Management is a cash management solution that helps you manage and control your cash cycle. Following are Cash Management functions and features:

Bank Reconciliation

You need to enter the detailed information from each bank statement, including bank account information, deposits received by the bank, and payments cleared. Once you have entered detailed bank statement information into Cash Management, you then reconcile that information with your system transactions. Cash Management provides two methods of reconciliation: 

Automatic: Bank statement details are automatically matched and reconciled with system transactions.

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. 

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. 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.

Matching Bank Statement Lines with Transactions

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

• Matching: Match a bank statement line against a Payables payment, Receivables receipt, Cash Management cashflow, Payroll payment, miscellaneous transaction, or open interface transaction using a transaction number (such as the payment or deposit number), bank account, amount, and currency. You can match a statement line against a Treasury settlement using date and amount. You can also match a statement line against a General Ledger journal entry. 

• Clearing: Clear the transactions that are matched to the bank statement line, if the transactions have not been cleared previously. Only Payables payments, Receivables receipts, Cash Management cashflows, miscellaneous transactions, and open interface transactions can be cleared. Reconciled Payroll payments and General Ledger journal entries are matched but not cleared.

Multi-Currency Handling

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

• Exchange Rate

• Exchange Rate Type and Exchange Rate Date

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

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:

• Clear and reconcile receipts.

• Undo the reconciled status of a reconciled receipt.

• Undo the cleared status of a cleared receipt.

• Navigate to Receivables where you can create or reverse receipts.

• Create miscellaneous (non-invoiced) transactions, such as interest, debits, or credits.

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:

• Clear and reconcile payments.

• Undo the reconciled status of a reconciled payment.

• Undo the cleared status of a cleared payment.

• Record miscellaneous transactions that are on your bank statements such as bank charges, or bank errors. 

Integration with Payroll

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

• Reconcile your payroll account with your bank statement.

• Undo the reconciled status of a reconciled payroll payment.

Integration with Treasury

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

• Update bank account balances in Oracle Treasury.

• Reconcile Treasury settlements against your bank statements.

• Undo the reconciled status of a reconciled Treasury settlement.

Oracle Payables Reconciliation

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. 

Oracle Receivables Reconciliation

Oracle Cash Management enables you to reconcile receipts you entered with Receivables against your bank statements. You can create miscellaneous transactions in Receivables directly from Cash Management, to reflect bank-originated activities. 

When you unreconcile a receipt in Cash Management, it unclears the receipt and returns the amount to the remittance account. If you use Cash Management to reverse reconciled receipts, the system creates reversal entries and reopens the original invoice.

Oracle Payroll Reconciliation

You can reconcile manual as well as EFT payments from Oracle Payroll against your bank statements. When payments are made to third parties, you can reconcile them using the same matching criteria as payroll payments. You can track payroll and third party payments that have been reconciled. 

Treasury Reconciliation

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

Using Cash Management with Automatic Clearing

You can use Automatic Clearing to clear receipts in Oracle Receivables. 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.

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 create forecasts using data across organizations, and in any currency. You have the flexibility to include or exclude overdue transactions for all appropriate source transaction types in your forecasts.