Cash Management Period Closing Procedures

Introduction

•      Oracle Cash Management is an enterprise wide solution for managing liquidity and controlling cash.

•      Cash Management gives you direct access to expected cash flows from your operational systems.

•      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

•      Forecast cash flows in any currency and in multiple time periods

•      Streamline the reconciliation process

•      Monitor for exceptions and fraud

•      Forecast based on historical or future transactions

•      Manage the cash cycle efficiently and with control

Cash Management Integration

•      Cash Management is integrated with Payables, Receivables and General Ledger.

•      Payables: Payments information automatically transfers to CM without any process.

•      Receivables: to transfer Receipts information to CM remittance process is required.

•      From AR only remitted eligibility transactions will transfer to CM.

•      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:

·         Normally at the end of every period, the entries in the cash book are compared with entries in the pass book.

·         The exact causes of differences are scrutinized and then bank reconciliation statement is prepared.

·         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:

ü  We will enter bank statement into Oracle and run a program, so that system will search the transactions and will reconcile automatically.

ü  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

ü  These formats are used to upload bank statements into Oracle.

ü  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.

ü  We have to run “Bank statement load” program.

ü  We have to define Bank codes for transaction identification purpose.

Cash Management Period Closing Procedures 

Ensure the following before closing the Payables & Receivables.

       Any reconciliation transactions created by Cash Management are properly entered.

       Account balances are updated.

       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.