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    Oracle Payables Reconciliation Accounting: Realized Gains and Losses

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    suresh
    Oracle Payables Cash Management allows reconciliation of payments against bank statements. It automatically handles accounting for payment timing differences and reconciliation differences. When payments are reconciled, accounting entries are created and can be transferred to General Ledger. The system also automatically calculates and accounts for realized gains and losses. Miscellaneous payments made in Cash Management are treated as negative receipts in Receivables. Payments can be unreconciled or reversed, undoing previous accounting entries.

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    Oracle Payables Reconciliation Accounting: Realized Gains and Losses

    Uploaded by

    suresh
    95 views5 pages
    Oracle Payables Cash Management allows reconciliation of payments against bank statements. It automatically handles accounting for payment timing differences and reconciliation differences. When payments are reconciled, accounting entries are created and can be transferred to General Ledger. The system also automatically calculates and accounts for realized gains and losses. Miscellaneous payments made in Cash Management are treated as negative receipts in Receivables. Payments can be unreconciled or reversed, undoing previous accounting entries.

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    Oracle Payables Cash Management allows reconciliation of payments against bank statements. It automatically handles accounting for payment timing differences and reconciliation differences. When payments are reconciled, accounting entries are created and can be transferred to General Ledger. The system also automatically calculates and accounts for realized gains and losses. Miscellaneous payments made in Cash Management are treated as negative receipts in Receivables. Payments can be unreconciled or reversed, undoing previous accounting entries.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    95 views5 pages

    Oracle Payables Reconciliation Accounting: Realized Gains and Losses

    Uploaded by

    suresh
    Oracle Payables Cash Management allows reconciliation of payments against bank statements. It automatically handles accounting for payment timing differences and reconciliation differences. When payments are reconciled, accounting entries are created and can be transferred to General Ledger. The system also automatically calculates and accounts for realized gains and losses. Miscellaneous payments made in Cash Management are treated as negative receipts in Receivables. Payments can be unreconciled or reversed, undoing previous accounting entries.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 5

    Oracle Payables Reconciliation Accounting

    Cash Management enables you to reconcile payments you created in Oracle Payables against
    your bank statements. You can use Cash Management to:

    o Automatically account for the delay in bank clearing of payments by crediting a


    cash clearing account when you issue a payment, and clear the balance with a
    cash account when you reconcile the payment.

    o Automatically account for differences between the amount cleared and the
    original payment amount, whether they are due to exchange rate fluctuations,
    bank charges, or bank errors.

    When you reconcile your payments with Oracle Cash Management, the system automatically
    creates accounting entries to the Cash, Cash Clearing, realized Gains and Losses, Bank Charges,
    and Bank Errors accounts you specified in the Oracle Payables Banks window. You transfer the
    accounting entries resulting from Cash Management payment reconciliation to General Ledger
    from Payables.

    Realized Gains and Losses

    Cash Management automatically calculates your realized gains and losses, caused by exchange
    rate fluctuations, between payment creation and payment reconciliation time. Oracle Payables,
    on the other hand, calculates your realized gains and losses between invoice entry and payment
    issuance time.
    Note: You must specify exchange rates for foreign currency payments to be reconciled.

    Miscellaneous Payments

    You can create miscellaneous payments directly from Cash Management to account for
    transactions such as bank charges. However, miscellaneous payments are actually created as
    negative miscellaneous receipts in Oracle Receivables. As a result, the reconciliation accounting
    for Receivables applies to these transactions.

    Unreconciling a Payment

    When you unreconcile a payment in Cash Management, it creates reversing entries if you have
    already posted the reconciled payment. Such actions in Cash Management automatically update
    information in Payables, and you can transfer these entries to General Ledger by submitting the
    Payables Transfer to General Ledger program. If you have not yet posted the reconciled
    payment, Payables deletes the reversing entries.

    Reversals and Unclearing

    You can use Cash Management to reverse reconciled transactions. You can also undo the cleared
    check status of a reconciled payment, whether that payment was originally cleared in Cash
    Management or Payables. When you undo the clearing, the check status reverts to Negotiable
    and, if you use a cash clearing account, the entry that debited the cash clearing account and
    credited cash is reversed.

    Transferring Cash Management Transactions to General Ledger

    You transfer the accounting entries generated in Cash Management to your general ledger when
    you transfer payments using the Transfer to General Ledger program from Payables. Payables
    performs the following accounting, depending on whether you have enabled the Allow
    Reconciliation Accounting Payables option:

    o Enabled: Payables transfers each payment you issue twice--once as an


    unreconciled payment and once again as a reconciled payment. The system
    creates an accounting entry for unreconciled payments to debit the AP Liability
    account and credit the Cash Clearing account you specify. Once you reconcile the
    payments in Cash Management and then transfer them using Payables, Payables
    creates an accounting entry to debit the Cash Clearing account and credit the Cash
    (asset) account. Payables also creates accounting entries to record bank charges,
    bank errors, and exchange rate gains or losses that occur between payment
    issuance and payment reconciliation.

    o Not Enabled: Payables transfers each payment once. The system creates an
    accounting entry to debit the AP Liability account and credit the Cash (asset)
    account.

    Payables provides several reports to review transfer and posting information about your
    payments. See your Oracle Payables User's Guide for more information.

    Procure to Pay (P2P) – Accounting Entries

    In response of my last post ,yet another reader asked for "Asset ,Purchasing & Inventory
    Purchasing and there corresponding accounting entry within P2P cycle. Therefore this post
    highlights some of key accounting entry in each steps with respect to th

    As you know "procure to pay" Business Flow start Purchasing requisition till paying to vendors
    and most important, in all the case the purchase is made for basic element called Items.

    As you know there are three types of items:

     Inventory Expense Item


     Inventory Asset Item
     Expense item

    Definition of above Items used in Purchasing can be best understood as:

    Asset flag means means it is an asset and the items value will show in your inventory valuation.

    Inventory Item

    Expense Item

    These are one which is used for consumable items purchase for your organization. More
    importantly , for creating an expense item you have to perform following setup doing in the
    Master Item form.Go to same path in oracle inventory

    Oracle Inventory -> Items -> Master Items

    When master items form open Go to Inventory Menu you need to tick followings

    1. Inventory item
    2. Stock able
    3. Transactble
    4. Resolvable

    And you can also setup in Costing and purchasing menu account code as per your requirement.
    Asset Item

    As discussed above , the following attributes need to be enabled for such an item.

     Inventory item
     Stock able
     transact able
     Costing flag
     Inventory asset value

    For entering on purchase orders


    It should have purchased and purchasable flags enabled and you have to make sure you are
    assigning this item to the Purchasing org which you have defined at

    Oracle Purchasing > Setup > Organizations >


    Financial Options > 'Supplier-Purchasing' alternate region 'Inventory Organization' field.

    The accounting can be best described for such kind of items is;

    Is there any effect on Step 5 in all three cases, that mean do matching have different
    accounting entry?

    The answer is no; as per my understanding purpose of setting the PO to a 2way, 3 way or 4 way
    match is to ensure that the corresponding hold is generated on the invoice.

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