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DO.070 MOG Cash Management Enhancements

Author:

xxx

Creation Date:

Feb 29, 2016

Last Updated:

Feb 29, 2016

Version:

1.0

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Table of Contents
Table of Contents...................................................................................................... 1
1 . BANK ACCOUNT MODEL.........................................................................................3
2 . BANK ACCOUNT BALANCES AND INTEREST CALCULATIONS....................................15
3 . BANK ACCOUNT TRANSFERS................................................................................18
4 . SUBLEDGER ACCOUNTING....................................................................................22
5 . BANK STATEMENT RECONCILIATION......................................................................26
6 . MULTI-ORG ACCESS CONTROL AND SECURITY........................................................28
7 . CASH POOLING.................................................................................................... 31
8 . BANK ACCOUNT SIGNING AUTHORITIES................................................................33
9 . CASH FORECASTING............................................................................................34
1 0. SECURITY WIZARD............................................................................................. 41

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R12 Cash Management Enhancements.

Banks,Bank Branches,Bank accounts.

Banks security wizard

Bank Transfers.

Bank account signing authority.

Sub ledger Accounting.

Automatic Reconciliation.

Cash Forecasting.

Cash Pooling.

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1 . B AN K AC C O UN T MO DEL

Defines and tracks all bank account information in a central place

Provides ownership of bank accounts by legal entities with the
option to grant account use to Operating Unit (Payables,
Receivables), Legal Entity (Treasury), Business Group (Payroll)
Grants explicitly account
units/functions and users

access

to

multiple

operating

Uses Multi-Org Access and UMX-based security

Each Bank account is associated with a Bank and Bank Branch
defined in Oracles common Trading Community Architecture (TCA)
resulting in Centralized maintenance. TCA is not visible to end
users.

BANK ACCOUNT MODEL INTEGRATION

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Trading Community
Architecture (TCA)
Cash Management
Bank

Payables
Receivables

Bank Branch
Bank Account
Payroll

Treasury

BANK ACCOUNT MODEL BENEFITS

Reduces number of access points to manage bank accounts
Centralizes user interface
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Improves visibility and control of bank accounts

Simplifies bank reconciliation
Provides reconciliation of a single bank statement across multiple
Operating units
Increases percentage of automatically reconciled transaction
Adds flexibility
parameters

by

using

bank

account

level

reconciliation

Bank Account Model Summary

Single bank account can be used across different organizations and
functions

Centralized maintenance

Explicit usage permission

Simplified reconciliation
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Cross-unit reconciliation

Bank account level reconciliation parameters

Bank Account Model Setup and Process

Payroll
Treasury

Cash Management
Define Banks

Define Bank Branches

Yes
7

Define Bank
Counterparties
4 i a pto
p sBank
.com
and link
Branches

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Treasury Use?

NO
System check for users privileges
for Bank Account Maintenance

Define Bank Accounts

Add Bank
Account to
Organization
al Payment
method

Yes
Payroll Use?

No
End
IMPLEMENTATION CONSIDERATIONS
Trading Community Architecture: Bank and Bank Branches
Human Resources: Organization hierarchy
Business Group
Legal Entity
Operating Unit
General Ledger: Accounting Flexfields
Payroll (if used)
Treasury (if used)

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Create Bank- Information

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Create Branch- Information

Create Branch- Address

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Create Branch- Contact

Create Account- Owner and Use (After assigning the Legal

Entity and Account use)

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Create Account- Information

Create Account- Controls

Create Account- Access

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Add Organization Access

Operating Unit specific access

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Create Account- Contact

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2 . B AN K AC C O UN T B AL AN C ES AN D IN TEREST C AL C UL ATI O N S

Centralizes balances and interest. Tracks balances of all internal

bank accounts in a single location.
Reports on the accumulated bank account interest
Allows manual entry and automatic upload.
Compares actual historic vs. projected balances
Provides flexible reports onscreen and through XML
Provides reusable interest rate schedules

BENEFITS
Improves visibility of bank account balances.
Single place to maintain balances for all internal bank accounts.
Verifies bank account interest charges.
Flexible tool to calculate interest due
Improves balance reporting
Keep track of and report on multiple balance types, including
actual vs. projected balances.

BANK ACCOUNT BALANCES AND INTEREST CALCULATIONS

MAINTENANCE
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Query Bank Accounts

No
Maintain
balances of multiple
bank accounts?

Maintain
No
historical
balances?
Yes
Maintain historical
balances of a single
account

Select a date

Maintain historical
Balances of multiple
bank accounts

Maintain projected
balances of a single
bank account

Cash Position

SUMMARY

Manage all bank account balances in one place

Various balance and float types

Flexible reporting including XML Publisher
Verify bank interest charges
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Flexible interest calculation tool

IMPLEMENTATION CONSIDERATIONS
Determine the need for customized XML Publisher reporting

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3 . B AN K AC C O UN T TRAN SF ER S

Allows creating, approving, settling and accounting for cash transfers between internal bank
accounts

Uses with Cash Pools, Zero Balance Accounts (ZBA) and Cash Leveling activities

BANK ACCOUNT TRANSFERS DESCRIPTION

Provides multiple creation methods

Manual

Cash Leveling

Zero Balance Account (ZBA)

Includes bank account transfer payment templates

Uses an option to exclude from settlement

Provides multiple levels of security

UMX security for Transfer creation

Separate Authorization Function

BANK ACCOUNT TRANSFERS BENEFITS

Improves cash management efficiency

Creates bank account transfers and process payments via seamless integration with
Payments

Journalizes bank account transfers with a powerful and flexible subledger accounting
feature

Increases cash positioning accuracy

Updates projected balances automatically when the bank

account transfers are created
BANK ACCOUNT TRANSFER PROCESS
Authorization
Required?

No

Create Bank Account

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Transfer

Yes
Authorize Bank
Account Transfer

Validate Bank
Account Transfer

Journalize Bank
Account Transfer
Return status

BANK
ACCOUNT
INTERACTIONS

Payments

TRANSFERS

Subledger
Accounting

DEPENDENCIES

AND

Payments
Bank Account Transfers rely on the functionality available in
Payments to process the settlement of the bank account
transfers.
Intercompany
For Bank Account Transfers between different internal entities
rely on the Intercompany setup to identify the cross-charge
segments.
Subledger Accounting
Journal entries for Bank Account Transfers are created by the
Subledger Accounting engine.

BANK ACCOUNT TRANSFERS SUMMARY

Create, settle and account for bank account transfers.
Intra- and inter-company cash transfers.
Domestic or foreign currency transfers.
Manage your cash position and bank statements effectively.
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Create bank account transfers in the cash position.

Record cash transfers based on the bank statement activity.

BANK ACCOUNT TRANSFERS SETUP

Set system profile

Set up Transaction Subtypes

Set up Payment Templates

BANK ACCOUNT TRANSFERS SETUP SET SYSTEM PROFILE

CE: Bank Account Transfers
This parameter defines where the cash transfers will be created
as a result of the cash pool activity
Profile Value
Cash Management

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Description
Cash transfers will be created in
Cash Management using the Bank
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Treasury

Account Transfer framework

Cash transfers will be created in
Oracle
Treasury
using
InterAccount
Transfers
(if
both
accounts belong to the same legal
entity) or Intercompany Funding
transactions (if bank accounts
belong to different legal entities)

IMPLEMENTATION CONSIDERATIONS
Where can your organization benefit from template based bank
transfers?

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4 . SUB L EDGER AC C O UN TI N G

Rule-based accounting engine: Provides

framework for creating journal entries for:

common,

flexible

Bank Account Transfers

Bank Statement Cash Flows in Cash Management

CASH MANAGEMENT SUBLEDER ACCOUNTING

Bank Account
Transfer

Accounting
Configurations
Subledger

GL

Journal
Journal
Entries and
Accounting
Balances
Events

Accounting

Entries

Program

Subledger
Balances
Bank
Statement
Cash Flow

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Journal
Entry Setup

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SUBLEDGER ACCOUNTING BENEFITS

Reduces financial reporting costs.
Allows multiple accounting representations for a single business
event.
Resolves conflicts between corporate and local fiscal accounting
requirements.
Increases transparency and auditability.
Retains the most granular level of detail in journal entries.
Provides different summarization options in the General Ledger.
Allows full audit and reconciliation.
SUBLEDGER ACCOUNTING KEY CONCEPTS
Event Model: Definition of the subledger transaction types and
lifecycle.
Event Class: Transaction types for accounting rule purposes.
Event Type: Possible actions with accounting significance.
Transaction object: Data model containing transaction information
to be used in accounting.
Source: Any attribute of a transaction that can be used in defining
the journal entry rules and when generating an entry.

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SUBLEDGER ACCOUNTING KEY CONCEPTS FLOW

SOURCES
TYPE

E VENT CLASS

EVENT
Create

Bank Account Transfer

Date
Cash Flow Amount
Bank Account Number

Bank Account
Transfer

Cancel
Clear
Unclear

Bank Statement Date

Bank Statement Number
Cash Flow Amount

Record
Bank Statement
Cash Flow

Cancel

SUBLEDGER ACCOUNTING SUMMARY

Flexible accounting engine.
Common flexible framework for creating journal entries for Bank
Account Transfers and Bank Statement Cash Flows in Cash
Management
Transparency and auditability.
Drill down from the journal entry to the source transaction
Trial balances
Flexible reports

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IMPLEMENTATION CONSIDERATIONS
General Ledger: The GL account derivation in this feature depends on
the setup in General Ledger.

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5 . B AN K STATE MEN T REC O N CI L I ATI ON

BANK STATEMENT RECONCILIATION DESCRIPTION

Bank Transaction Codes can be linked to multiple sources.
Reconciliation tolerances are:
Defined at the bank account level
Available as
reconciliation

separate

tolerances

for

manual

and

auto

Broken down by source for Auto reconciliation

Reconciliation can be done across operating units.
BANK STATEMENT RECONCILIATION BENEFITS
Improved Efficiency: Increases straight-through processing success
rate of the auto reconciliation
Process involves the below steps,

Receive bank statement

Load and verify bank statement

Perform Auto reconciliation

Review results

Create journal entries and post to General Ledger

BANK STATEMENT RECONCILIATION SETUP

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Now part of bank setup

Transaction Codes

Assign a transaction code to multiple transaction sources

Account Controls

Reconciliation control parameters

DEFINING BANK TRANSACTION CODES

If you want to load electronic bank statements or use Cash Management's Auto Reconciliation
feature, you must define, for each bank account, the transaction codes that your bank uses to
identify different types of transactions on its statements. You should define a bank transaction
code for each code that you expect to receive from your bank. Payment and Receipt codes may be
defined more than once if they apply
You can enter effective date range fields, Start Date and End Date, so that you can make a bank
transaction code inactive.
Navigation: - Setup-> Banks-> Bank Transaction Codes

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To
define
a
bank

transaction code:
1. Navigate to the Bank Transaction Codes window.
2. In the Find Bank window, select the bank, whose codes you are defining. Alternatively, you can
query the bank account number
3. For each transaction code you are defining, select a transaction type from the list of values. The
transaction type determines how Cash Management will match and account for transactions with
that code.
Bank statement lines are coded to identify the transaction type the line represents. Since each
bank might use a different set of transaction codes, you need to map each code a particular bank
uses, to one of the following Cash Management transaction types.
You can select from the following list of values,
Payment, Receipt,Miscellaneous payment,Miscellaneous
Sufficient Funds),Sweep In,Sweep Out

receipt,Stopped,Rejected,NSF

(Non-

4. Enter the code used by your bank.

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5. Optionally enter a description of the transaction.
6. Enter start and end dates to determine when the bank transaction code is considered active.
7. Enter the number of float days that you want Cash Management to add to or subtract from the
statement date to create an anticipated value date for automatic lockbox receipts.
8. Enter a Transaction Source for payment and receipt transactions.
9. Enter the Reconciliation Sequence number.If the same code with bank transaction type
Payment or Receipt is entered more than once with different transaction sources this number is
used by the AutoReconciliation program to determine the order in which to search the transaction
sources for a matching transaction
Optionally select a value for the Payroll Payment Format field to reconcile statement lines, with the
assigned transaction code, to Payroll EFT payments
11. If the transaction type is Miscellaneous Receipt or Miscellaneous Payment, use the Matching
against field to determine the order of matching and the type of transactions to match.
12. Choose the correction method your bank uses when correcting bank errors: Reversal,
Adjustment, or Both.
This field is only applicable for those Miscellaneous Receipt or Miscellaneous Payment transaction
codes that may be used to match to correction statement lines.
13. Choose whether to create transactions for any miscellaneous payments and miscellaneous
receipts reported on the bank statement when no transaction number is provided.
14. If you selected the Create option in the previous field, specify the Receivables Activity type
and payment method for any miscellaneous transactions (receipts or payments) you create from
within Cash Management.
15. Define each additional bank transaction code, following the previous steps.
16. Save your work.

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Reconciliation sequence and Matching against

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Correction method, Activity and Receipt method

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Enter the mandatory fields for Bank Transaction Code Types

Save your work and Close

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6 . MULTI - O RG AC C ESS CO N TRO L AN D SEC URI TY

Provides bank account maintenance security.

Privilege to create and update bank accounts that belong to the
legal entities that the user can access
Provides bank account access security.
Bank Account Access Cash Management Security Profile: Which
organizations the user can access.
Sets:
Bank Account use
Treasury security
MOAC security
Payroll security

MULTI-ORG ACCESS CONTROL AND SECURITY BENEFITS

Reduced Costs: Enable shared services centers and cut down
processing time.
Improved Efficiency: Easily access data from different operating
units.
Improved Security Control: Explicitly grant access to specific users
for specific purposes.

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MULTI-ORG ACCESS CONTROL AND SECURITY SUMMARY

Existing security model expanded: More granular and explicit
access and usage rights.
Shared services center support.

India

USA

Legal
Entity

Legal
Entity

India

USA

Operating Operating
Unit
Unit

Singapore
Legal
Entity

Singapore
Operating
Unit

Single Responsibility

IMPLEMENTATION CONSIDERATIONS
HRMS
Organizational hierarchy
Set up Multi-Org Security Profiles
Treasury
Payroll

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7 . C ASH PO O LI N G

Cash leveling or Cash Pooling:

Is a cash management technique aimed at optimizing the
balances of the internal bank accounts held at one or several
banks by consolidating balances.
Is usually performed on a daily basis
Can be done by transaction or by total net end-of-day balances
Allows users to group bank accounts into pooling structures to
manage funds effectively
CREATING CASH POOLS
Notional Cash Pools:
Consist of one concentration account and multiple sub accounts
Are used for cash leveling similar to zero balancing without the
actual funds movement
Physical Cash Pools:
Consist of one or two concentration accounts and multiple subaccounts with funds transfer rules specified. When Organizations want
to monitor individual bank account balances manually and then physically move cash to
or from their accounts based on their preferences, Self-Initiated Physical Cash Pools
structure can be used. We can define the rules in pool definitions, to automatically
determine when bank account transfers should be made and for what amounts.

Are used for cash leveling wherein you can initiate fund
transfers or mirror outsourced cash pools

Bank-Initiated Physical Cash Pools, or Zero Balance Accounts(ZBAs):

Bank-Initiated Physical Cash Pools are used When Organizations want to sweep all end-of-day
balances automatically to or from the main accounts.
This kind of services will leave zero balances at the end of way. That is the reason, BankInitiated Physical Cash Pools are often called as Zero Balance Accounts.

VIEWING AND UPDATING CASH POOLS POOLS

You can view cash pool information as follows:
Search for the cash pool name
Click on the cash pool name in the Search and Results page
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If you have the appropriate user security, you can update the cash
pool
IMPLEMENTATION CONSIDERATIONS
Some setup in Oracle Treasury

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8 . B AN K AC C O UN T SI GN I N G AUTHO RI TI ES

This feature allows Oracle Cash Management users to enter, maintain, and report on those
people in their organizations with bank account signing authority.

Users are able to indicate single and joint signing limits for each bank account as well as
signer group categories, effective dates, approval status, and other relevant information.

Users are also allowed to attach electronic copies of documents like passport photos,
signature files, or bank documents directly to the signing
authority records.

It is possible to use Oracle Workflow to route approval requests for signing authority, or users
can set statuses manually.

Configuration for controlling whether Signing Authority Approval has

to be processed through workflow or manually controlled can be done
from System parameters,
Navigation: Setup> System> System Parameters

System Parameters
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Configurations for Bank Account Signing Authority can be done by navigating to,
Setup> Bank> Bank Account Signing Authority and then, we can define the approval authorities,

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9 . C ASH FO REC ASTI N G
When planning the short or long term funding requirements of a business, it is more important to
forecast the likely cash requirements. It is a planning tool that helps to anticipate the flow of cash
in and out of our business. Cash Flow forecasts help us to build a model of the way in which cash
moves within an organization or project. This cash forecasting can be framed for few weeks or
months based on the clients requirement.
Define forecast templates with specifications and we can modify the template whenever we need
or business forecast changes.
To create Cash forecasting template,
Navigate to Cash Management responsibility and click cash forecasting to define Template,

Name the template and select the forecast by days / GL period and select exclude or include for
overdue transactions. I have used days and exclude overdue transactions.
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Click next
Add source type row for Supplier invoice / Supplier payments / Customer invoice/ Customer
receipts. There are lot more to include, which are listed in the screen shot below

Select supplier invoice and click go

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We have various filters to limit the cash forecasting by OU / Ledger / Pay group / Supplier type etc
Similarly continue for rest of the other types and allocate row number 20 / 30 /40.
Click next and configure the column details as follows,

And click the Finish button to complete the Template. The template created is shown below

Template- Vision Operations C.F

Click run forecast. This is the way we submit the request to process cash forecast.

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1 0. SEC URI TY W IZ ARD
Cash Management Security Wizard
Using the Cash Management Security wizard, an administrator can assign multiple legal entities to
a role or roles to set up the following three securities:

Bank Account Maintenance security control bank account creation and updates
Bank Account Use security control bank account access

Bank Account Fund Transfers security control bank account transfers

To launch the Cash Management Security Wizard,

Define Grants and Roles:
Navigation: User Management --> Role & Role Inheritance.
Select the User Management Responsibility and Click on Roles & Role Inheritance.

Enter Type, Category and Name of the payable responsibility name and click on GO.

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Click on Update.
Click on Security Wizards

Click on Save and Proceed.

Click on CE UMX Security Wizard

Click on Add Legal Entities.

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Select Bank Account Grants Use and Maintenance and Bank Account Transfers and then click on
Apply.

Click on Apply.

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