Chapter 7. Managing Cash

In this chapter, we will cover:

• Creating bank accounts

• Entering bank statements

• Reconciling bank statements

• Creating cash forecasts

• Reviewing accounting transactions

Introduction

The liquidity of an organization is managed in Oracle Cash Management; this includes the reconciliation of the cashbook to the bank statements, and forecasting future cash requirements. In this chapter, we will look at how to create bank accounts, enter and reconcile bank statements, and create cash forecasts. Cash management integrates with Payables, Receivables, Payroll, Treasury, and General Ledger.

Let's start by looking at the cash management process:

1. 1. The Bank generates statements.

2. 2. The statements are sent to the organization electronically or by post.

3. 3. The Treasury Administrator loads and verifies the bank statement into cash management. The statements can also be manually entered into cash management.

4. 4. The loaded statements are reconciled to the cash book transactions.

5. 5. The results...

Introduction

The liquidity of an organization is managed in Oracle Cash Management; this includes the reconciliation of the cashbook to the bank statements, and forecasting future cash requirements. In this chapter, we will look at how to create bank accounts, enter and reconcile bank statements, and create cash forecasts. Cash management integrates with Payables, Receivables, Payroll, Treasury, and General Ledger.

Let's start by looking at the cash management process:

1. 1. The Bank generates statements.

2. 2. The statements are sent to the organization electronically or by post.

3. 3. The Treasury Administrator loads and verifies the bank statement into cash management. The statements can also be manually entered into cash management.

4. 4. The loaded statements are reconciled to the cash book transactions.

5. 5. The results are reviewed, and amended if required.

6. 6. The Treasury Administrator creates the journals for transactions in the General Ledger.

Creating bank accounts

Oracle Cash Management provides us with the functionality to create bank accounts. In this recipe, we will create a bank account for a bank called Shepherd Bank, for one of their branches called Kings Cross branch.

Getting ready

Log in to Oracle E-Business Suite R12 with the username and password assigned to you by the system administrator. If you are working on the Vision demonstration database, you can use OPERATIONS/WELCOME as the USERNAME/PASSWORD.

We also need to create a bank before we can create the bank account. Let's look at how to create a bank and the branch:

1. 1. Select the Cash Management responsibility.

2. 2. Navigate to Setup | Banks | Banks.

3. 3. In the Banks tab, click on the Create button.

4. 4. Select the Create new bank option.

5. 5. In the Country field, enter United States.

6. 6. In the Bank Name field, enter Shepherds Bank.

7. 7. In the Bank Number field, enter JN316.

8. 8. Click on the Finish button.

Let's create the branch and the address:

1. 1. Click the Create Branch icon...

Entering bank statements

Bank statements are downloaded from the bank to a local directory. Once the file is received, the bank account balance and statement information can be loaded into the bank statement open interface tables, using the bank statement loader program or a custom loader program. The files can also be loaded automatically using an interface program or using the XML Gateway. Bank statements can also be entered manually.

In this recipe, we will look at how to enter bank statements.

Getting ready

The bank statement shown next has been loaded into the open interface table:

Reconciling bank statements

After importing or entering the bank statements, we can run the AutoReconciliation program to automatically reconcile the bank transactions to the payables payments and receivables receipts. We can also run the bank statement import and AutoReconciliation program as we did in the previous recipe.

We can then review the AutoReconciliation execution report to identify and correct errors. We can rerun the AutoReconciliation program or perform a manual reconciliation, if necessary. In this recipe, we will review the results of the autoreconciliation program, and manually reconcile bank statements.

Getting ready

We need to have entered bank statements.

How to do it...

Let's list the steps required to reconcile bank statements:

1. 1. Select the Cash Management responsibility.

2. 2. Navigate to Bank Statement | Bank Statements and Reconciliation.

3. 3. Navigate to the Menu and select View | Find.

4. 4. In the Account Number field, enter 95-6891-3074.

5. 5. Click on the Find button.

6. 6. Click...

Creating cash forecasting

Cash forecasting is a tool that can be used to forecast the inflow and outflow of cash within the organization:

• Inflows sources: General Ledger, Sales, Order Management, Receivables, Treasury, Projects, and External Sources

• Outflows sources: General Ledger, Purchases, Payables, Payroll, Projects, Treasury, and External Sources

This can help the organization to plan liquidity requirements, and plan adequately. In this recipe, we will look at how to run cash forecast.

Getting ready

A cash forecast template is required. Let's look at a six month forecast template:

1. 1. Select the Cash Management responsibility.

2. 2. Navigate to Cash Forecasting.

Date	Transaction	Description	Debit	Credit	Balance
		Opening Balance			0.00
03-Mar-11	Payment	Fixture Expert Inc		3,092.26	3,092.26
06-Mar-11	Deposit	GL Deposit	100,000.00		96,907.74
08-Mar-11	Payment	Consolidated Supplies		3,688.05	93,219.69
11-Mar-11	Payment	AP Bank Charges		30.00	93,189.69
11-Mar-11	Receipt	Bank Interest	37.52		93,227.21
14-Mar-11	Receipt	Advantage...

3. Select the Forecast Templates tab.

4. In the Template Name field, enter Six Month Forecast VisionOps.

5. Click on the Go button.

6. The Forecast Template is displayed, click on the Six Month Forecast VisionOps link.

7. The forecast is by GL Periods and Overdue transactions are excluded.

8. The row definitions are displayed, and...

Reconciling bank statements

After importing or entering the bank statements, we can run the AutoReconciliation program to automatically reconcile the bank transactions to the payables payments and receivables receipts. We can also run the bank statement import and AutoReconciliation program as we did in the previous recipe.

We can then review the AutoReconciliation execution report to identify and correct errors. We can rerun the AutoReconciliation program or perform a manual reconciliation, if necessary. In this recipe, we will review the results of the autoreconciliation program, and manually reconcile bank statements.

Getting ready

We need to have entered bank statements.

How to do it...

Let's list the steps required to reconcile bank statements:

1. 1. Select the Cash Management responsibility.

2. 2. Navigate to Bank Statement | Bank Statements and Reconciliation.

3. 3. Navigate to the Menu and select View | Find.

4. 4. In the Account Number field, enter 95-6891-3074.

5. 5. Click on the Find button.

6. 6. Click...

Creating cash forecasting

Cash forecasting is a tool that can be used to forecast the inflow and outflow of cash within the organization:

• Inflows sources: General Ledger, Sales, Order Management, Receivables, Treasury, Projects, and External Sources

• Outflows sources: General Ledger, Purchases, Payables, Payroll, Projects, Treasury, and External Sources

This can help the organization to plan liquidity requirements, and plan adequately. In this recipe, we will look at how to run cash forecast.

Getting ready

A cash forecast template is required. Let's look at a six month forecast template:

1. 1. Select the Cash Management responsibility.

2. 2. Navigate to Cash Forecasting.

Reviewing accounting transactions

In this recipe, we will transfer transactions to the General Ledger and review the accounting transactions generated.

Getting ready

Log in to Oracle E-Business Suite R12 with the username and password assigned to you by the system administrator. If you are working on the Vision demonstration database, you can use OPERATIONS/WELCOME as the USERNAME/PASSWORD.

How to do it...

Let's list the steps required to complete the task:

1. 1. Select the Cash Management responsibility.

2. 2. Navigate to Other | Programs | Run, or select View | Requests from the menu.

3. 3. Click on the Submit a New Request button.

4. 4. Select Single Request from the Options.

5. 5. Click on the OK button.

6. 6. In the Submit Request form, select Create Accounting from the list of values.

7. 7. Select the Parameters field, and select Vision Operations (USA) as the Ledger, enter 31-MAR-2011 as the End Date, select Yes as the parameter for Post in General Ledger, and enter YO-CE-00001 as the General Ledger Batch...