Cash Management

White Paper on Bank Account Transfer
Author: Sanjay Prasad

Creation Date: November 15, 2010 Last Updated: Version: Status: December 28, 2010 1.0 FINAL

Copyright © 2010 Oracle Corporation All Rights Reserved

Table of Contents
1. Objective .........................................................................................3
1.1 1.2 1.3 Scope of the Document .............................................................................. 3 Background ................................................................................................ 3 Terms ......................................................................................................... 4

2.

Overview of the Bank Account Transfer Feature.......................5
2.1 2.2 2.3 2.4 Normal Business Cycle of Bank Account Transfer ................................... 5 Steps to be Performed in Oracle Applications ........................................... 5 Configuration Needed in Oracle Applications ........................................... 6 Business Scenario ...................................................................................... 6

3.

Step by Step Guide to Completing a Bank Account Transfer ...7
3.1 Define Payment Template ......................................................................... 7 3.1.1 Functional Details ...................................................................................... 7 3.1.2 Technical Details ....................................................................................... 8

4.

Create a Bank Account Transfer..................................................9
4.1 4.2 Functional Details ...................................................................................... 9 Technical Details ..................................................................................... 11

5.

Settlement of a Bank Account Transfer.....................................13
5.1 Payment Creation..................................................................................... 13 5.1.1 Functional Details .................................................................................... 13 5.1.2 Technical Details ..................................................................................... 15 5.2 Payment Instructions Generation ............................................................. 17

5.2.1 Functional Details .................................................................................... 17 5.2.2 Technical Details ..................................................................................... 19

6.

Reconciliation and Accounting ...................................................22
6.1 Reconciliation and Accounting for the Source Bank Account ................ 22 6.1.1 Sample of a Subledger Accounting Report .............................................. 25 6.2 Reconciliation and Accounting for the Destination Bank Account ......... 26

6.2.1 Sample of a Subledger Accounting Report .............................................. 29

7.

References .....................................................................................30

Page ii of 30

1.

Objective
To provide: 1. 2. An overview of the Bank Account Transfer feature. A step by step guide to completing bank account transfer transactions. A brief overview of the table level data at different stages of the bank account transfer business transaction.

3.

1.1

Scope of the Document
This paper will cover: 1. The Cash Management setup specific to Bank Account Transfer. The step by step guide to creating bank account transfer transactions. The step by step guide to processing bank account transfers through Oracle Payments. The accounting for Bank Account Transfer.

2.

3.

4.

This paper will not cover: 1. The configuration necessary to settle bank account transfers through Oracle Payments. The intercompany/intracompany accounting setup for bank account transfers between banks belonging to different legal entities and/or ledgers. The steps to be performed to enable Bank Account Transfer for a specific Cash Management responsibility.

2.

3.

1.2

Background
Bank Account Transfer is a new feature introduced in R12. This feature fulfills the business requirement of transferring funds between internal bank accounts.

Page 3 of 30

The payment template provides default values to the bank account transfer. Page 4 of 30 .3 Terms Payment Template: A payment template is used if a specific bank account transfer is performed frequently.1. This is an optional configuration. Source Bank Account: Bank account from which funds are disbursed. Destination Bank Account: Bank account that receives the funds.

Receive bank statements for the source and/or destination bank account. Use Cash Management to reconcile the bank statements. which ensures business operations can run smoothly. if necessary. 3. Create a bank account transfer in the Cash Management module. 2. transmitted to an external entity for further processing. Receive the bank statement for the source bank account. 4. 4. Generate the corresponding accounting entries. . 3. 2. the following steps must be completed in Oracle Applications: 1.2. the payment instructions will be generated and. In this case. Initiate a funds transfer between internal bank accounts to fulfill business requirements. 2. Receive the bank statement for the destination bank account. Page 5 of 30 2.1 Normal Business Cycle of Bank Account Transfer The normal business cycle of Bank Account Transfer includes the following steps: 1. Generate the payment instructions. Bank Account Transfer provides the option of initiating the settlement process through Oracle Payments. use the Cash Management module to create accounting for the reconciled Bank Account Transfer transactions. Overview of the Bank Account Transfer Feature The transfer of funds between internal bank accounts is a common business practice. 5.2 Steps to be Performed in Oracle Applications To successfully complete the bank account transfer. Reconcile the bank statement to ensure funds transfer activity is complete for the source bank account. Reconcile the bank statement to ensure funds transfer activity is complete for the destination bank account. After the bank statement is reconciled. This type of transfer allows funds to be available to the proper internal bank accounts. 6. Send the payment instructions to the corresponding bank for further processing.

4. 2. 6. Receive the bank statements and reconcile the fund transfers. 5. the following example of a fund transfer is provided: 1. Refer to the Configuring Oracle Payments section of the Oracle Payments Implementation Guide.3 Configuration Needed in Oracle Applications The following configuration is necessary before starting a bank account transfer: 1. Refer to Document ID 414705. The payment template provides default values to the bank account transfer. Refer to the Cash Management Setup Checklist section of the Oracle Cash Management User Guide. Generate the payment instructions. using the login sysadmin.2. An optional configuration is to define a payment template. which belong to different legal entities and/or ledgers. Configure Oracle Payments for funds disbursement. 4. Create journal entries for the fund transfers. 3. This configuration is specific to the Bank Account Transfer feature. 2.4 Business Scenario To demonstrate the Bank Account Transfer feature. Page 6 of 30 . such as generating and transmitting the payment instructions. Transfer USD 1000 from bank account number 123321 to bank account number 1234321.1. Refer to the Oracle Cash Management User Guide. Assign the Cash Management responsibility so you can perform bank account transfers. Complete the intercompany/intracompany account configuration if the bank account transfer is between banks. steps 5 through 8. 3. Define the internal bank accounts. 2. This is a mandatory configuration only if you wish to settle the bank account transfer through Oracle Payments. Settling the bank account transfer through Oracle Payments enables the user to process funds disbursement through Oracle Payments. Run the security wizard under the User Management responsibility. Configure the Cash Management module. A payment template can be used if a specific bank account transfer is performed frequently.

3. This value can be overridden when you create the actual bank account transfer. 3.1 Step by Step Guide to Completing a Bank Account Transfer Define Payment Template In this scenario. the value of this field is set to Yes. Page 7 of 30 . transferring of funds from bank account number 123321 to bank account number 1234321 is a frequent activity. Destination Bank Account: Details of the bank account to which funds are transferred. The template code entered for the bank account transfer from bank account number 123321 to 1234321 is BAT-TR. Therefore. Authorize Transaction: Indicates whether this specific funds transfer requires approval in Oracle Applications. 3. Source Bank Account: Details of the bank account from which funds are disbursed. Settle Transaction: Indicates if you want to settle the transaction using Oracle Payments. the value is No. In this example.1. you want to generate the payment instructions using Oracle Applications. Begin by defining a payment template—This is an optional step.1 Functional Details Navigation: Cash Management Responsibility > Setup > System > Payment Template General Details tab Template Code: Identifies a specific template. In this example.

Payment Details tab Payment Method: This value indicates the payment method by which the funds will be disbursed.2 Technical Details Details of the defined payment template are stored in the ce_payment_templates table. we will select an electronic payment method. Run the following query to list the columns in the ce_payment_templates table: select * from ce_payment_templates where payment_template_code = ‘BAT-TR’ Page 8 of 30 . In this example. 3. you should ensure that the funds disbursement is properly configured. Before selecting a specific payment method. This includes creating a valid Payment Process Profile (PPP).1. Any valid payment method for funds disbursement can be selected. Payment Method is a mandatory field only if the value of Settle Transaction is set to Yes in the General Details tab.

Entering all of the required details. for the bank account transfer. Page 9 of 30 . a. you have defined a payment template for the transfer from bank account number 123321 to bank account number 1234321. In this example.1 Functional Details The bank account transfer transaction can be created using one of the following two methods: 1.4. therefore. the field values will default to the values listed in the payment template. 2. Create a Bank Account Transfer Navigation: Cash Management Responsibility > Bank Account Transfer 4. Select the payment template from the list of values. such as the bank account number. Obtaining the field values from a defined payment template. BAT-TR.

Page 10 of 30 . When the payment template is selected.b. the field values will default to the values in the template.

Observe the following attributes of the bank account transfer transaction: Transfer number: This is the bank account transfer number.2 Technical Details Bank account transfer transaction details are stored in the ce_payment_transactions table. Status: This is the status of the bank account transfer. Enter the values for the remaining fields. 1. Refer to the Cash Management User Guide for a list of status codes. Transfer Date: This is the date of the bank account transfer transaction. Click on the Apply and Validate button. f. Page 11 of 30 . the transfer number is 106. This will create the bank account transfer transaction. The value of TRXN_STATUS_CODE is IN_PROCESS. such as the Transfer Date field. Edit the default values. In this example. Run the following query to view the values in the ce_payment_transactions table for this bank account transfer transaction: select * from ce_payment_transactions where trxn_reference_number = 106 The value of PAYMENT_REQUEST_NUMBER is 107.c. e. 4. This is the payment request number submitted to Oracle Payments for settlement. d. Search words: bank account transfer status. if necessary.

Run the following query to view data from the iby_pay_service_requests table: select * from iby_pay_service_requests where call_app_pay_service_req_code in ( select payment_request_number from ce_payment_transactions where trxn_reference_number = 106 ) and calling_app_id = 260 The value of PAYMENT_SERVICE_REQUEST_STATUS is INFORMATION_REQUIRED. Refer to Section 5 of this document. Therefore. Details of the related payable documents are stored in the iby_docs_payable_all table. This indicates that the system could not find the PPP for the payable document. the next step is to generate the payment instructions in Oracle Payments. This indicates that the payment request has been submitted. As you are using Oracle Payments to settle the bank account transfer. the system will submit a Payment Process Request (PPR) to Oracle Payments for further processing. 3. Reconciliation and Accounting. Upon successful creation of the bank account transfer.It is necessary to settle the bank account transfer using Oracle Payments. then refer to Section 6. the payment request will wait for the necessary information to be provided in order to continue processing. 2. If Oracle Payments is not used to settle the bank account transfer. Details of the payment request are stored in the iby_pay_service_requests table. but more information is needed to progress further. Settlement of a Bank Account Transfer. Run the following query to view data from the iby_docs_payable_all table: select * from iby_docs_payable_all where calling_app_doc_ref_number = '106' and calling_app_id = 260 The value of DOCUMENT_STATUS is MISSING_PROFILE. Page 12 of 30 .

In this example. this is PPR 107. Page 13 of 30 .5.1. 5.1 Settlement of a Bank Account Transfer Payment Creation Navigation: Fund Disbursement Process Manager Responsibility > Home 5. Click on the Take Action icon for the corresponding payment request.1 Functional Details a.

The value defaults to the source bank account designated in the bank account transfer transaction. Payment Process Profile (PPP): PPP is used by Oracle Payments to process the payment request. b. the submitted PPR is awaiting user input from the PPP. Provide a value for the PPP. c. Click on the Go button to run the PPR. Check the status of the PPR. Status: This field displays the status of the PPR.Internal Bank Account: This is the account from which funds are disbursed. In this example. Page 14 of 30 .

3. 2. The value of PAYMENT_PROFILE_ID is populated after the PPP for the PPR is selected.5. Run the following query to view data from the iby_docs_payable_all table: select * from iby_docs_payable_all where calling_app_doc_ref_number = '106' and calling_app_id = 260 The following results are obtained: 1. Page 15 of 30 . details of the payment are stored in the iby_payments_all table. Run the following query to view data from the iby_pay_service_requests table: select * from iby_pay_service_requests where call_app_pay_service_req_code in ( select payment_request_number from ce_payment_transactions where trxn_reference_number = 106 ) and calling_app_id = 260 The value of PAYMENT_SERVICE_REQUEST_STATUS is PAYMENTS_CREATED. The value of PAYMENT_ID is determined after the payment is initiated. During the initiation process.1. 3. Run the following query to view data from the ce_payment_transactions table: select * from ce_payment_transactions where trxn_reference_number = 106 The value of TRXN_STATUS_CODE is IN_PROCESS. The value of DOCUMENT_STATUS is PAYMENT_CREATED. 2. It provides the payment a unique identifier.2 Technical Details 1.

If the PPP type is Printed. The next step is to create the payment instructions. the selected PPP was not Printed. then you must submit a Create Printed Payment Instructions request. To create the payment instructions. • In this example. • Page 16 of 30 . 5. Run the following query to view data from the iby_payments_all table: select * from iby_payments_all where payment_service_request_id in ( select payment_service_request_id from iby_pay_service_requests where call_app_pay_service_req_code in ( select payment_request_number from ce_payment_transactions where trxn_reference_number = 106 ) and calling_app_id = 260 ) The value of PAYMENT_STATUS is CREATED. The status of the PPR is Payment Initiated. you must submit a Create Electronic Payment Instructions request.4.

Status of Payment Initiated PPP value of SANPPP 111222333 Page 17 of 30 . 2.2 5.2.5.1 Payment Instructions Generation Functional Details This request will create the payment instructions for all of the PPRs with the following attributes: 1.

Check the status of the PPR.a. Page 18 of 30 . Navigation: Cash Management Responsibility > Bank Account Transfer c. b. Check the details of the bank account transfer by clicking on the Transfer Number link. Check the status of the bank account transfer.

Run the following query to view data from the ce_payment_transactions table: select * from ce_payment_transactions where trxn_reference_number = 106 The value of TRXN_STATUS_CODE is SETTLED. Bank Account Transfer has created the following two cash flows: 1.2 Technical Details When the payment instructions are generated. this is Cashflow Number 63. Check the generated cash flows by clicking on the View Cashflows button.2. The outgoing cash flow for the source bank account. Page 19 of 30 . In this example. this is Cashflow Number 64. The incoming cash flow for the destination bank account. 1. 2. the status of the bank account transfer becomes SETTLED. In this example. 3. 5.d.

4.2. The value of PAYMENT_INSTRUCTION_ID is populated in the iby_payments_all table when the payment instructions are created. Run the following query to view data from the iby_pay_service_requests table: select * from iby_pay_service_requests where call_app_pay_service_req_code in ( select payment_request_number from ce_payment_transactions where trxn_reference_number = 106 ) and calling_app_id = 260 The value of PAYMENT_SERVICE_REQUEST_STATUS is COMPLETED. Page 20 of 30 . 3. Run the following query to view data from the iby_payments_all table: select * from iby_payments_all where payment_service_request_id in ( select payment_service_request_id from iby_pay_service_requests where call_app_pay_service_req_code in ( select payment_request_number from ce_payment_transactions where trxn_reference_number = 106 ) and calling_app_id = 260) The value of PAYMENT_STATUS is FORMATTED. Run the following query to view data from the iby_docs_payable_all table: select * from iby_docs_payable_all where calling_app_doc_ref_number = '106' and calling_app_id = 260 The value of DOCUMENT_STATUS is PAYMENT_CREATED.

If the PPP type is Printed.5. Page 21 of 30 . if the PPP type is Electronic. However. then record the print status. Run the following query to view data from the iby_pay_instructions_all table: select * from iby_pay_instructions_all where payment_instruction_id in ( select payment_instruction_id from iby_payments_all where payment_service_request_id in ( select payment_service_request_id from iby_pay_service_requests where call_app_pay_service_req_code in ( select payment_request_number from ce_payment_transactions where trxn_reference_number = 106 ) and calling_app_id= 260 ) ) This completes the creation and settlement of the bank account transfer. continue to the next section.

Page 22 of 30 . you can see that the payment has been disbursed from the source bank account. From the bank statement. 6. The value of Type is Payment. Click on the Available button.6.1 Reconciliation and Accounting Reconciliation and Accounting for the Source Bank Account Navigation: Cash Management Responsibility > Bank Statement > Bank Statement and Reconciliation The creation of the bank statement for the source bank account 123321 is displayed below. The value of Status is Unreconciled. a.

b. Page 23 of 30 . Reconcile the cashflow using Cashflow Number 63.

d. Create an accounting output file. c.1.1 for a sample report.The value of Status is Reconciled. Refer to section 6. Page 24 of 30 . Run the Create Accounting request to begin the accounting of the reconciled bank account transfer from the source bank account.

1.1 Sample of a Subledger Accounting Report The following is a sample of a Create Accounting output file: Page 25 of 30 .6.

From the bank statement. The value of Type is Receipt. you can see that the destination bank account shows that it has received the transfer.2 Reconciliation and Accounting for the Destination Bank Account Navigation: Cash Management Responsibility > Bank Statement > Bank Statement and Reconciliation The value of Status is Unreconciled.6. Page 26 of 30 .

Page 27 of 30 . Click on the Available button. b. Reconcile the cashflow using Cashflow Number 64.a.

Click on the Reconcile button. Page 28 of 30 .c. d. Refer to section 6. Run the Create Accounting request to begin the accounting of the reconciled bank account transfer from the destination bank account. Create an accounting output file. e.2.1 for a sample report.

1 Sample of a Subledger Accounting Report The following is a sample of a Create Accounting output file: This completes the accounting of the bank account transfer. Page 29 of 30 .2.6.

References Refer to the following documentation for more information on the Bank Account Transfer feature: 1.com/technetwork/documentation/applications167706.oracle. Oracle Cash Management User Guide Oracle Payments Implementation Guide Oracle documentation can be found at: http://www.html 3. 2.1: R12: How to Create Bank Account Transfers in Cash Management Page 30 of 30 .7. Document ID 414705.

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