Cash Management

White Paper on Bank Account

Transfer

Author: Sanjay Prasad

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

Copyright  2010 Oracle Corporation

All Rights Reserved
Table of Contents
1. Objective .........................................................................................3
1.1 Scope of the Document .............................................................................. 3
1.2 Background ................................................................................................ 3
1.3 Terms ......................................................................................................... 4
2. Overview of the Bank Account Transfer Feature.......................5
2.1 Normal Business Cycle of Bank Account Transfer ................................... 5
2.2 Steps to be Performed in Oracle Applications ........................................... 5
2.3 Configuration Needed in Oracle Applications ........................................... 6
2.4 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 Functional Details ...................................................................................... 9
4.2 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

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1. Objective
To provide:

1. An overview of the Bank Account Transfer feature.

2. A step by step guide to completing bank account transfer

transactions.

3. A brief overview of the table level data at different stages of the

bank account transfer business transaction.

1.1 Scope of the Document

This paper will cover:

1. The Cash Management setup specific to Bank Account

Transfer.

2. The step by step guide to creating bank account transfer

transactions.

3. The step by step guide to processing bank account transfers

through Oracle Payments.

4. The accounting for Bank Account Transfer.

This paper will not cover:

1. The configuration necessary to settle bank account transfers

through Oracle Payments.

2. The intercompany/intracompany accounting setup for bank

account transfers between banks belonging to different legal
entities and/or ledgers.

3. The steps to be performed to enable Bank Account Transfer for

a specific Cash Management responsibility.

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.

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1.3 Terms
Payment Template: A payment template is used if a specific bank account
transfer is performed frequently. The payment template provides default
values to the bank account transfer. This is an optional configuration.

Source Bank Account: Bank account from which funds are disbursed.

Destination Bank Account: Bank account that receives the funds.

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2. Overview of the Bank Account Transfer Feature
The transfer of funds between internal bank accounts is a common business
practice. This type of transfer allows funds to be available to the proper
internal bank accounts, which ensures business operations can run smoothly.

2.1 Normal Business Cycle of Bank Account Transfer

The normal business cycle of Bank Account Transfer includes the following
steps:
1. Initiate a funds transfer between internal bank accounts to
fulfill business requirements.

2. Generate the payment instructions.

3. Send the payment instructions to the corresponding bank for

further processing.

4. Receive the bank statement for the source bank account.

Reconcile the bank statement to ensure funds transfer activity is
complete for the source bank account.

5. Receive the bank statement for the destination bank account.

Reconcile the bank statement to ensure funds transfer activity is
complete for the destination bank account.

6. Generate the corresponding accounting entries.

2.2 Steps to be Performed in Oracle Applications

To successfully complete the bank account transfer, the following steps must
be completed in Oracle Applications:

1. Create a bank account transfer in the Cash Management

module.

2. Bank Account Transfer provides the option of initiating the

settlement process through Oracle Payments. In this case, the
payment instructions will be generated and, if necessary,
transmitted to an external entity for further processing.

3. Receive bank statements for the source and/or destination bank

account. Use Cash Management to reconcile the bank
statements.

4. After the bank statement is reconciled, use the Cash

Management module to create accounting for the reconciled
Bank Account Transfer transactions.

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2.3 Configuration Needed in Oracle Applications
The following configuration is necessary before starting a bank account
transfer:
1. Configure the Cash Management module. Refer to the Cash
Management Setup Checklist section of the Oracle Cash
Management User Guide.

2. Define the internal bank accounts. Refer to the Oracle Cash

Management User Guide.

3. Run the security wizard under the User Management

responsibility, using the login sysadmin. Assign the Cash
Management responsibility so you can perform bank account
transfers. Refer to Document ID 414705.1, steps 5 through 8.

4. Complete the intercompany/intracompany account

configuration if the bank account transfer is between banks,
which belong to different legal entities and/or ledgers.

5. Configure Oracle Payments for funds disbursement. 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, such as
generating and transmitting the payment instructions. Refer to
the Configuring Oracle Payments section of the Oracle
Payments Implementation Guide.

6. An optional configuration is to define a payment template. A

payment template can be used if a specific bank account
transfer is performed frequently. The payment template
provides default values to the bank account transfer. This
configuration is specific to the Bank Account Transfer feature.

2.4 Business Scenario

To demonstrate the Bank Account Transfer feature, the following example of
a fund transfer is provided:
1. Transfer USD 1000 from bank account number 123321 to bank
account number 1234321.

2. Generate the payment instructions.

3. Receive the bank statements and reconcile the fund transfers.

4. Create journal entries for the fund transfers.

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3. Step by Step Guide to Completing a Bank Account Transfer

3.1 Define Payment Template

In this scenario, transferring of funds from bank account number 123321 to
bank account number 1234321 is a frequent activity. Begin by defining a
payment template—This is an optional step.

3.1.1 Functional Details

Navigation: Cash Management Responsibility > Setup > System > Payment
Template

General Details tab

Template Code: Identifies a specific template. The template code

entered for the bank account transfer from bank account number 123321
to 1234321 is BAT-TR.

Authorize Transaction: Indicates whether this specific funds transfer

requires approval in Oracle Applications. This value can be overridden
when you create the actual bank account transfer. In this example, the
value is No.

Settle Transaction: Indicates if you want to settle the transaction using

Oracle Payments. In this example, you want to generate the payment
instructions using Oracle Applications. Therefore, the value of this field
is set to Yes.

Source Bank Account: Details of the bank account from which funds are
disbursed.

Destination Bank Account: Details of the bank account to which funds

are transferred.

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 Payment Details tab

Payment Method: This value indicates the payment method by which the
funds will be disbursed. Any valid payment method for funds
disbursement can be selected. Before selecting a specific payment
method, you should ensure that the funds disbursement is properly
configured. This includes creating a valid Payment Process Profile
(PPP). Payment Method is a mandatory field only if the value of Settle
Transaction is set to Yes in the General Details tab. In this example, we
will select an electronic payment method.

3.1.2 Technical Details

Details of the defined payment template are stored in the
ce_payment_templates table.

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’

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4. Create a Bank Account Transfer
Navigation: Cash Management Responsibility > Bank Account Transfer

4.1 Functional Details

The bank account transfer transaction can be created using one of the
following two methods:

1. Entering all of the required details, such as the bank account

number, for the bank account transfer.

2. Obtaining the field values from a defined payment template.

In this example, you have defined a payment template for the

transfer from bank account number 123321 to bank account
number 1234321; therefore, the field values will default to the
values listed in the payment template, BAT-TR.

a. Select the payment template from the list of values.

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b. When the payment template is selected, the field values
will default to the values in the template.

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 c. Enter the values for the remaining fields, such as the
Transfer Date field.

d. Edit the default values, if necessary. Click on the Apply

and Validate button.

e. This will create the bank account transfer transaction.

f. Observe the following attributes of the bank account

transfer transaction:

Transfer number: This is the bank account transfer number. In

this example, the transfer number is 106.

Transfer Date: This is the date of the bank account transfer

transaction.

Status: This is the status of the bank account transfer.

Refer to the Cash Management User Guide for a list of status
codes. Search words: bank account transfer status.

4.2 Technical Details

Bank account transfer transaction details are stored in the
ce_payment_transactions table.

1. 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. This is

the payment request number submitted to Oracle Payments for
settlement.

The value of TRXN_STATUS_CODE is IN_PROCESS.

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It is necessary to settle the bank account transfer using Oracle Payments.
Upon successful creation of the bank account transfer, the system will submit
a Payment Process Request (PPR) to Oracle Payments for further processing.
Details of the payment request are stored in the iby_pay_service_requests
table. Details of the related payable documents are stored in the
iby_docs_payable_all table.

2. 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. This indicates that the payment
request has been submitted, but more information is needed to
progress further.

3. 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.

This indicates that the system could not find the PPP for the payable
document. Therefore, the payment request will wait for the
necessary information to be provided in order to continue
processing.

As you are using Oracle Payments to settle the bank account transfer, the
next step is to generate the payment instructions in Oracle Payments. Refer
to Section 5 of this document, Settlement of a Bank Account Transfer. If
Oracle Payments is not used to settle the bank account transfer, then refer to
Section 6, Reconciliation and Accounting.

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5. Settlement of a Bank Account Transfer

5.1 Payment Creation

Navigation: Fund Disbursement Process Manager Responsibility > Home

5.1.1 Functional Details

a. Click on the Take Action icon for the corresponding payment

request. In this example, this is PPR 107.

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Internal Bank Account: This is the account from which funds are disbursed.
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. In this example, the submitted PPR is awaiting user
input from the PPP.

b. Provide a value for the PPP. Click on the Go button to run the PPR.

c. Check the status of the PPR.

Status: This field displays the status of the PPR.

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5.1.2 Technical Details
1. 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.

2. 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.

3. 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. The value of DOCUMENT_STATUS is

PAYMENT_CREATED.

2. The value of PAYMENT_PROFILE_ID is populated after

the PPP for the PPR is selected.

3. The value of PAYMENT_ID is determined after the

payment is initiated. It provides the payment a unique
identifier. During the initiation process, details of the
payment are stored in the iby_payments_all table.

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4. 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.

5. The next step is to create the payment instructions.

• In this example, the selected PPP was not Printed. To create

the payment instructions, you must submit a Create Electronic
Payment Instructions request.

• If the PPP type is Printed, then you must submit a Create

Printed Payment Instructions request.

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5.2 Payment Instructions Generation

5.2.1 Functional Details

This request will create the payment instructions for all of the PPRs with the
following attributes:

1. Status of Payment Initiated

2. PPP value of SANPPP 111222333

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 a. Check the status of the PPR.

b. Check the status of the bank account transfer.

Navigation: Cash Management Responsibility > Bank Account Transfer

c. Check the details of the bank account transfer by clicking on the

Transfer Number link.

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 d. Check the generated cash flows by clicking on the View Cashflows
button.

Bank Account Transfer has created the following two cash flows:

1. The outgoing cash flow for the source bank account. In this
example, this is Cashflow Number 63.

2. The incoming cash flow for the destination bank account. In

this example, this is Cashflow Number 64.
3.

5.2.2 Technical Details

When the payment instructions are generated, the status of the bank account
transfer becomes SETTLED.

1. 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.

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2. 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.

3. 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.

4. 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.

The value of PAYMENT_INSTRUCTION_ID is populated in the

iby_payments_all table when the payment instructions are created.

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 5. 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.

If the PPP type is Printed, then record the print status. However, if the PPP
type is Electronic, continue to the next section.

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6. Reconciliation and Accounting

6.1 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.

The value of Type is Payment. From the bank statement, you can see that
the payment has been disbursed from the source bank account.

a. Click on the Available button.

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b. Reconcile the cashflow using Cashflow Number 63.

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The value of Status is Reconciled.

c. Run the Create Accounting request to begin the accounting of the

reconciled bank account transfer from the source bank account.

d. Create an accounting output file. Refer to section 6.1.1 for a sample

report.

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6.1.1 Sample of a Subledger Accounting Report
The following is a sample of a Create Accounting output file:

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6.2 Reconciliation and Accounting for the Destination Bank Account
Navigation: Cash Management Responsibility > Bank Statement > Bank
Statement and Reconciliation

The value of Status is Unreconciled.

The value of Type is Receipt. From the bank statement, you can see that the
destination bank account shows that it has received the transfer.

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a. Click on the Available button.

b. Reconcile the cashflow using Cashflow Number 64.

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c. Click on the Reconcile button.

d. Run the Create Accounting request to begin the accounting of the

reconciled bank account transfer from the destination bank account.

e. Create an accounting output file. Refer to section 6.2.1 for a sample

report.

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6.2.1 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.

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7. References

Refer to the following documentation for more information on the Bank

Account Transfer feature:

1. Oracle Cash Management User Guide

2. Oracle Payments Implementation Guide

Oracle documentation can be found at:

http://www.oracle.com/technetwork/documentation/applications-
167706.html

3. Document ID 414705.1: R12: How to Create Bank Account

Transfers in Cash Management

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