Bank Statement Reconciliation Process in Oracle Cash Management

One of the main purposes for the Cash Management module is to reconcile all financial
incoming and outgoing Bank transactions.
As the actual financial transactions have to be between supplier and customer banks, it is
necessary to get the bank statements on a regular basis and match the bank statement
against all payments and receipts, etc. If for some reason certain transactions could not
be reconciled then probing both the statement and the transaction in Oracle will bring out
the discrepancy. Hence this is also very effective internal audit mechanism for the
organization implementing Oracle.
Step by step procedure to Load, Import and Reconcile the Bank Statement:
Login to Cash Management Administrator/ Manager responsibility
Prerequisites for running the Bank Statement Loader Program:
Bank Statement Mapping:
The Bank Statement Loader program uses a predefined SQL*Loader script to
load SWIFT940 bank statement files. However, since each bank adopts the
SWIFT940 standard slightly differently, you need to map the SWIFT940 format
to the Bank Statement Open Interface tables.
The SWIFT940 SQL*Loader script is located in $CE_TOP/bin/SWIFT940.ctl.
The mapping rules for the SWIFT940 format are listed in SWIFT940 Mapping
Template.
Since the Bank of Bahrain and Kuwait adopts the SWIFT940 standard slightly
differently, we have prepared a new SWIFT940 template in the setup.

Navigation: Setup > Bank Statements > Bank Statement Mappings

NOTE: Mapping Setup details have been attached as embedded object.

Bank Statement on the File Server:

Drop the bank statement files on the file server. Note the location of the files as
this has to be entered as a parameter in the Bank Statement Loader Program.

In our case the Data File Name is: 100000297603-130231.txt and the Directory
Path is /tmp.

Bank Transactions Codes:

If you want to load electronic bank statements, you must define, for each bank
account, the transaction codes that your bank uses to identify different types of
transactions on its statements.
Since each bank might use a different set of transaction codes, you need to map
each code that your bank uses (if you know it in advance). You should define a
bank transaction code for each code that you expect to receive from your bank.
For example, TRF represents transfers. However, SWIFT940 transaction codes do
not contain information about the debit or credit nature of the transaction. Instead,
the Debit/Credit Mark field is used to differentiate debit and credit entries, where
D means debit and C means credit.
When the Bank Statement Loader program populates the TRX_CODE column in
the Bank Statement Lines Interface table, it appends the Debit/Credit Mark to the
transaction code to form a new code.
For example, debit transfers are identified as TRFD and credit transfers as TRFC.
You must set up all the bank transaction codes before you import the bank
statement information otherwise the Bank Statement Import program will error
out. (Error case is explained later in this document).

Navigation: Setup > Banks Statements > Bank Transaction Codes

 After taking care of all the prerequisites, now run a Program by name Bank Statement

Loader.
Navigation: Other > Programs > Run

Enter the Parameters:

Enter parameters for the Bank Statement Loader program for 1 statement file.

Explanation for each parameter to be entered:

Process Option: Available values in Process Option parameter LOV are as follows:

Load: It is used to run the loader program only.

Load and Import: The Bank Statement Import program starts after the Bank Statement
Loader completes successfully (In our case we use this option).

Load, Import and Auto Reconciliation: In this case, both the Bank Statement Import
program and the Auto Reconciliation programs are launched after successful completion
of the Bank Statement Loader program.

Mapping Name: Name of the mapping rules that should be used. In our case it is SWIFT940.
Data File Name: Name of the bank statement file to load from. In our case it is 100000297603130209.txt
Directory Path: Location of the bank statement file. If none is entered, the Bank Statement
Loader program looks for the bank statement file in the directory of $CE_TOP/bin. In our case it
is /home/applcrp/
Note: If the Bank Statement Loader program completes with errors or warnings running in Load
and Import or Load, Import and AutoReconciliation mode, then the concurrent request terminates
and no further process is started.

All the requests fired for the Load and Import program are listed below:
The concurrent programs executed related to Bank Statement Loader is shown below:

Following requests are fired when Bank Statement Loader program runs:
1. Run SQL*Loader- SWIFT940: This request gives the output to say how many records have
been loaded into Oracle.
At this stage the records are loaded from the file into a staging table named,
CE_STMT_INT_TMP.
To view the records in this table, use the select * from CE_STMT_INT_TMP statement which
will give us the output as shown in the screenshot below:

Load Bank Statement Data: This request (Load Bank Statement Data) validates the data
against CE_STMT_INT_TMP table with the Mapping Name (i.e. SWIFT940, the parameter
entered while running the Bank Statement Loader Program).
The statement moves to CE_STATEMENT_LINES_INTERFACE table.
To view the records in the table, use the statement select * from
CE_STATEMENT_LINES_INTERFACE which will give us the output as shown in the
screenshot below:

Bank Statement Loader Execution Report: This report gives the overall status of the program.
The output looks like the following screenshot:

The concurrent programs executed related to Bank Statement Import is shown below.

Bank Statement Import Execution Report: The Bank Statement Import Execution Report
gives the overall status of the Import process. The report is shown below:
Screenshot

From the above screen, we find that the import program has completed with error.
The error is that the Transaction code for the statement line is not valid for this bank
account.
Sometimes, after you load SWIFT940 bank statement files into the open interface tables, you
may need to define new bank transaction codes in Cash Management which are not defined
earlier. SWIFT940 transaction codes represent the type of transaction.
To view the details about Transaction code, navigate to the Bank Statement Interface window.

Bank Statement Interface Window:

Navigation:
Bank Statements, Reconciliation and Balances > Bank Statements and Reconciliation > Bank
Statement Interface

We see the Error status to corresponding Account Numbers here in this screen.
Select any one line and click Ok to see the details. The following screen opens up:

Click on Lines button to view the Line details.

In this screen, we find that our bank has used Bank Transaction Codes that has not been defined
earlier in the Bank Transaction window.
Define the Bank Transaction Codes in the Bank transaction Codes window.
Navigation: Setup > Bank Statements > Bank Statement Transaction Codes

Again, run the Bank Statement Import Program and see the resulting Bank Statement Import
Execution Report. The Bank Statement Import Execution Report output gives the overall
status of the Import process. The report is shown below:

Once
the
Import
program
ends,
CE_STATEMENT_LINES_INTERFACE
table
CE_STATEMENT_LINES tables.

the
to

statement
moves
from
CE_STATEMENT_HEADERS,

To view the records in the table, use the statement:

select * from CE_STATEMENT_HEADERS where STATEMENT_HEADER_ID IN (2904,
2905, 2906, 2907);
which will give us the output as shown in the screenshot below:

To view the records in the table, use the statement:

select * from CE_STATEMENT_LINES where STATEMENT_HEADER_ID=2904 and
LINE_NUMBER BETWEEN 1 and 20;
which will give us the output as shown in the screenshot below:

You can view the records by navigating to the Bank Statements and Reconciliation window.
Navigation:
Bank Statements, Reconciliation and Balances > Bank Statements and Reconciliation > Bank
Statements and Reconciliation

Reconciliation Process:
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:

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.

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.

Run a Program by name AutoReconciliation.

Navigation: Other > Programs > Run

Enter parameters for the AutoReconciliation Program for the account for which you want to run
the AutoReconciliation.

NOTE: You can run the Bank Statement Loader program to load, import and reconcile a
statement by selecting Process option Load, Import, and AutoReconciliation. But, in our
case, since the bank statement is already loaded and imported, we just have to run
AutoReconciliation as a separate program which is available in LOV.
The requests which will run are shown in the screenshot:

Detailed output of AutoReconciliation Execution Report is as follows:

As per the output of Autoreconciliation Execution Report:

Out of 20 lines, line number 3, 4, 5, 6, 7, 8, 14 and 15 are UNRECONCILED and the remaining
lines are RECONCILED successfully by the Autoreconciliation program.

After AutoReconciliation completes, view the status in CE_STATEMENT_LINES table.

The statement lines STATUS change to RECONCILED from UNRECONCILED for

the lines for which the program could reconcile, in the CE_STATEMENT_LINES table.
To query the status follow the two steps as follows:
Get the STATEMENT_HEADER_ID from CE_STATEMENT_HEADERS table as
follows:
select * from CE_STATEMENT_HEADERS where STATEMENT_NUMBER = '6/1 - 06JAN-13';

View the status of the statement lines in CE_STATEMENT_LINES table with

STATEMENT_HEADER_ID for the statement_number = '6/1 - 06-JAN-13' as follows:
select * from CE_STATEMENT_LINES where STATEMENT_HEADER_ID = 2904;

Note that AutoReconciliation program could not reconcile few lines as there was it could not find
proper match for reconciling the lines which is available in the AutoReconciliation Execution
Report as Reconciliation Exceptions.

We can see the reconciled lines in the Bank Statements form.

Navigation: Bank Statements, Reconciliation and Balances > Bank Statements and
Reconciliation > Bank Statements and Reconciliation
Search for the Bank account (100000297603) with other parameters like date to reduce the LOV
that will appear for this account:

List of all the statements for the Bank Account comes up based on the search criteria as follows:

Select the Statement here and press Review button.

The imported Statement header appears.

See the reconciled lines by clicking Reconciled button