Oracle Fusion Financials - Cash Management

Cash management is a tool that helps businesses effectively manage their cash flow. It includes various functions to streamline the handling of cash transactions. Some key features of cash management are:

• Loading bank statements and reconciling them with your system's transactions

• Bank transfers

• Ad-hoc payments

• Cash forecasting

This chapter will introduce you to the different functionalities available in cash management, giving you an overview of how it can benefit your business.

Banks provide bank statements in various formats to meet the needs of businesses. While some banks support multiple formats, others may only offer a few. The most common formats supported by banks include:

• MT940

• BAI2

• CAMT54

By exploring this chapter, you will gain a deeper understanding of how these different bank statement formats appear and a comprehensive insight into each field within.

Businesses receive bank statements from banks to aid in reconciling their accounts and understanding transactions. Each transaction in the bank statement is assigned a transaction code to indicate the type of transaction, such as debit, credit, interest, or bank charges.

In the course of learning about creating transaction codes, you will gain insight into:

• Understanding the purpose of bank statements for businesses

• Identifying transaction codes in bank statements

• Recognizing different types of transactions through codes

• Creating transaction codes for various transactions

• Bank statements can be created manually in the system for bank accounts when either the transaction volume is low or integration with the bank is not established. In this chapter, you will learn:

  • Reasons for creating bank statements manually

  • Steps to manually create a bank statement in the system

  • Benefits of the manual bank statement creation process

When a receipt is generated in Receivables, the following steps occur:

• The receipt is sent from Receivables to Cash Management for reconciliation purposes.

• Upon loading the bank statement and running the bank reconciliation process, the receipt is then marked as reconciled.

This chapter will walk you through the process of how a receipt transitions from Receivables to Cash Management.

Payments made in Payables are pushed to Cash Management for reconciliation:

• Payments made in Payables are sent to Cash Management for reconciliation.

• Bank statement loading and reconciliation process in Cash Management reconciles the payments.

This chapter covers the movement of payments from Payables to Cash Management.

Sometimes, businesses may need to make one-off payments without going through the process of supplier registration, as it can be a cumbersome process in many organizations. The ad-hoc payment process provides a simpler way to make such payments:

• It offers approval control ensuring necessary maker/checker controls are in place.

• It allows the actual payment to be routed via Accounts Payables.

In the following chapter, you will learn how to effectively make ad-hoc payments.

Businesses often need to transfer cash for different purposes, whether between bank accounts or legal entities. Bank transfers are a convenient method for moving funds smoothly and securely. Here's what you need to know about executing a bank transfer:

• Bank transfers are used by businesses to transfer funds between different bank accounts or legal entities.

• Bank transfers provide a secure and efficient way to move money electronically.

• Understanding how to initiate a bank transfer is important for businesses to meet their financial needs.

One of the key functions of the Cash Management module is the ability to reconcile bank statements with receipts and payments recorded in the system.

Here's what you'll learn in this chapter about bank reconciliation:

• The importance of reconciling bank statements with system transactions

• The process of reconciling bank statements in the Cash Management module

• Reviewing unreconciled transactions post-reconciliation

• Manually reconciling transactions if needed

It is crucial to reconcile account balances between Cash Management and General Ledger to ensure data accuracy and generate precise financial statements. The reconciliation process provides the accounting team with the assurance that all information has been transferred correctly.

In this chapter, you will gain insights into the reconciliation of account balances between Cash Management and General Ledger. Here are some key points you will learn:

• The importance of reconciling account balances between Cash Management and General Ledger.

• The benefits of having accurate data in both systems.

• How reconciling account balances aids in generating precise financial statements.

Businesses must forecast their cash needs to plan for necessary cash reserves. Cash forecasting involves predicting incoming cash from customers, outgoing payments to suppliers, and the net cash available for a specific period. By analyzing this data, businesses can adjust their bank account balances accordingly.

• Forecasting cash needs is crucial for businesses to plan for required cash reserves.

• Cash forecasting provides an outlook of expected customer receipts, supplier payments, and net cash availability.

• Businesses can make adjustments to their bank account balances based on the cash forecast.

• This chapter focuses on teaching how to generate a cash forecast for businesses.