Introduction to

Cash Management

-Rohit Daswani
 Agenda

 Overview
 Bank Account Model
 Cash Management Setups
 Bank Statement Reconciliation
 Cash Positioning
 Cash Forecasting

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 Overview
Oracle Cash Management is an enterprise cash management solution that helps you effectively manage
liquidity and control your cash cycle. It provides comprehensive bank reconciliation and flexible cash
forecasting solutions.

Use Oracle Cash Management to

• Manage Bank, Bank Branch, and Bank Account Information
• Upload and reconcile bank statements
• Manage and control cash cycle
• Forecast cash needs
• Transfer funds between bank accounts, if functionality is available.

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 Key Concepts

 Cashflow:  Cash flow is the net amount of cash and cash-equivalents being transferred into and
out of a business.
 Cash inflow: Cash inflow is the money going into a business. That could be from sales,
investments or financing.
 Cash outflow:  The total outgoing funds from a company in a given period of time. Cash
outflows include expenses such as salaries, supplies, and maintenance.
 Cash Clearing: The Cash Clearing process enables you to track amounts that have actually cleared
the bank versus amounts still floating in the banking system. It creates the entries in the bank
account only when the amounts have cleared the bank they have been reconciled as cleared by
the bank reconciliation process.

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 Setups
Cash Management Security (Add legal entity to Roles)

Navigation: User Management Responsibility->Roles & Role Inheritance.

Enter the Type as Roles and Responsibilities, Category as Miscellaneous and Application as Cash Management. Then
click on Go. Select the responsibility and click on Update.

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 ..Cash Management Security continued

Click on Security Wizard.

In the new window, click

on Run Wizard for CE
UMX Security Wizard.

Add the legal entities

and choose the
Privileges: Use,
Maintenance and Bank
Account Transfers.

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 System Setup
Navigation: Cash Management-> Setup-> System->System Parameters

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 Bank Setup
Navigation: Cash Management ->Setup-> Banks-> Banks.
In the Bank Information page, give the details for Country, Bank Name and Bank Number. Once done click on Save
and Next. Bank Address and Bank Contact details if required, else click on Finish.

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 Bank Branch Setup
Navigation: Click on “Create Branch” in the Bank Creation Confirmation window or navigate to Cash Management-
> Setup->Banks.
In the Branch Information window give the details for Bank Branch Name and Branch Type. Once done click on
Save and Next. Give Address and Contact details if required else click on Finish.

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 Bank Account Setup
Navigation: Click on Create Account on the branch creation confirmation page or navigate to Cash Management
-> Banks->Bank Accounts.

Select the Legal Entity which would be the Bank Account Owner. Select the Account use for Payables,
Receivables. Once done click on Next.

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 Bank Account Setup : Bank Account Information
Give the Account name, Account Number, Currency and select if multiple currencies are allowed. Once done click
on Save and Next.

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 Bank Account Setup : Account Controls

Most important in Account Controls setup is Cash Account and Cash Clearing Account. Rest are not mandatory. Once
done click on Save and Next.

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 Bank Account Setup : Account Access

Click on Add Organization Access to add the OU’s which would have access to this account and select the Account
Use. Once done click on Finish.

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 Payment Documents
Navigation: Cash Management-> Setup -> Bank Accounts. Search for the bank account and Click on
“Manage Payment Documents”.
Enter the Name, Format, and First Available Document Number. Click on Apply.

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 Bank Transaction Codes
Navigation: Cash Management->Banks->Bank Transactions Codes.
Define, for each bank account, the transaction codes that is used by the bank to identify different types of
transactions on its statements. Define a bank transaction code for each code that you expect to receive from
the bank.

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 Bank Statement Reconciliation
A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to
the corresponding information on a bank statement. The goal of this process is to ascertain the differences between
the two, and to book changes to the accounting records as appropriate.

Before you can reconcile transactions against a bank statement, you need to enter the bank statement information into
Oracle Cash Management. You can accomplish this task by doing one of the following:

– Manually entering the information

or automatically by using:

– Using the Bank Statement Loader program or

– Using a custom loader program

Bank Reconciliation can be done either manually or by using AutoReconciliation.

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 Bank Statements Reconciliation Exercise
First Create a Payment in Payables Manager. Once done click on Create Accounting (Final).

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 Create Manual Bank Statement
Navigation: Cash Management-> Bank Statements-> Bank Statements and Reconciliation

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Add lines Manually and give the payment type as well as appropriate code number as well as transaction number. Once
done click on Save.

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 Manual Reconciliation
For Manual Reconciliation click on Available in the bank statement form to search for available transactions. In the
Available Transactions form check the relevant transactions for reconciliation.

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 Auto Reconciliation
If you want to use Auto Reconciliation run AutoReconciliation Program from Tools menu or by submitting a new
request. Payables uses Bank Transaction Codes as well as the document numbers to identify and match the relevant
transactions.

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 Post Reconciliation Accounting

Once reconciliation is done then go back to

Payables/Receivables and run Create Accounting
(Final Post) for clearing entries.

For example in the payment created earlier, after

running Create Accounting with Final Post we get
the clearing entries.

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 Cash Positioning
Cash positioning is a planning tool that helps business to view its daily cash position by currency or bank
account or cash pool. Cash positioning helps to evaluate your company's liquidity position.

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 Create Cash Position Worksheet
Navigate to Cash Management-> Cash Positioning. Click on Create.

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 Cash Positioning Exercise
Create a receipt in AR with todays date.

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Create an invoice and its payment in AP with todays date.

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Calculate prior day cash flow that is the inflow and outflow of cash between the date of the last bank statement and the
date for which the Cash Position is desired. Navigate to the Cash Management responsibility and submit the concurrent
program: Cash Position Prior Day Cash Flow and Overdue Transactions Program with the worksheet name and the
Date of Cash Position.

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 Generate Cash Position

Navigate to Cash Management-> Cash Positioning-> Search for the worksheet->Generate the cash position.
Notice the Customer Receipts and Supplier Payments Columns. Click on Export to view the Cash Position in
Excel Worksheet.

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 Cash Forecasting
Cash forecasting is a tool that integrates within the E-Business Suite and with external data sources to allow an
enterprise to manage cash flow into the business based on configured templates.

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 Create Cash Forecasting Template
Navigate to Cash Management->Cash Forecasts->Forecast Templates. Click on Create Template.
Templates determine the presentation of sources (rows) and forecast periods (columns) for your cash forecasts.

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Enter row details. Rows represent the sources of cash inflow or outflow.

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Next enter Column Details. Enter the details for each and every row.

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 Generate Cash Forecast
Navigate to Cash Management->Cash Forecasts->Forecast Templates. Enter the name of the forecast
template created and search for the same. Then click on Run Forecast.

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In the Submission Parameters window, enter the parameters for Forecast Name, Calendar Name etc. Then select the
Opening Balance Options. Next click on Submit. Next navigate to the Forecasts page and click on Go.

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Navigate to the Forecasts Page and search by forecast name and click on Go.

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Click on the concerned forecast name. We get the forecast results as shown below:

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