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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

Submitted to

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Table of Contents
TABLE OF CONTENTS............................................................1
1. BANK ACCOUNT MODEL.....................................................2
2. BANK ACCOUNT BALANCES AND INTEREST CALCULATIONS11
2.1 BANKS

SECURITY WIZARD:...............................................................11

3. BANK ACCOUNT TRANSFERS............................................30

3.1 BANK ACCOUNT TRANSFERS:...........................................................30
4. SUBLEDGER ACCOUNTING...............................................23
4.1 SUBLEDGER

ACCOUNTING:................................................................23

5. BANK STATEMENT RECONCILIATION.................................30

5.1 BANK

STATEMENT RECONCILIATION:....................................................30

6. MULTI-ORG ACCESS CONTROL AND SECURITY...................11

6.1 MOAC

AND SECURITY:....................................................................11

7. CASH POOLING...............................................................11
7.1

CASH POOLING:..............................................................................11

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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

http://apps2fusion.com/images/docs/anilpassi/R12-Oracle-Cash-Management.pdf

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
Improves visibility and control of bank accounts
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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
8

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 Bank- Address

Create Bank Address

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Create Branch

Creating Branch
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Bank Branch information

Branch Address
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Create Branch Address

Branch Address and auto assigned with Branch

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Save and Next

Create Contact
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Email, Phone and Address

Finish

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Bank Account creation

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Create Account

Account Owner and Use

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After assigning the Legal Entity and Account use

Account information
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Account Controls

C
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Account Access
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Add Organization Access

Operating unit specific access is granted

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Creating contact for Bank account is available

Manage Payment Documents

Create

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Creating Payment Documents

Payment Document is created

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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
http://apps2fusion.com/images/docs/anilpassi/R12-Oracle-Cash-Management.pdf

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.

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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 MAI N TEN AN C E

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

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SUMMA RY

Manage all bank account balances in one place

Various balance and float types

Flexible reporting including XML Publisher
Verify bank interest charges
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
PROCESS
Authorization
Required?
Create Bank Account
Transfer
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No

Yes
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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.

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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

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

Description

Cash Management

Cash transfers will be created in

Cash Management using the Bank
Account Transfer framework

Treasury

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)

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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 DESC RI PTI O N

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

Subledger 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

Event 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

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Reconciliation control parameters

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

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

Singapore

Legal
Entity

Legal
Entity

Legal
Entity

India

USA

Singapore

Operating Operating
Unit
Unit

Operating
Unit

Single Responsibility

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

CASH POOLING DESCRIPTION

Cash leveling or Cash Pooling:

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Is a cash management technique aimed at optimizing the

balances of the internal bank accounts held at one or several
banks
Is usually performed on a daily basis
Can be done by transaction or by total net end-of-day balances
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
Are used for cash leveling wherein you can initiate fund
transfers or mirror outsourced cash pools
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
If you have the appropriate user security, you can update the cash
pool
IMPLEMENTATION CONSIDERATIONS
Some setup in Oracle Treasury
SUMMARY
.
In this module, you should have learned how to:
.
Describe and use the new features in Release 12 of
Oracle Cash Management.
.
Set up the new features in Release 12 of Oracle Cash
Management.
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7.

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4 . C ash Pool i ng
Manages transfers between internal banks

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5 . Bank Accou nt Si gni ng Authori ti e s
Manages who has signing authority on which bank accounts

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6 . C ash Posi ti oni ng I ntra-day Acti vi ti e s

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