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AIMBP.080 FUTURE PROCESS MODELCash ManagementThe National Company for Glass Industries – ZoujajOracle Applications Implementation Project – Release 12

Author: Padmaiah.VCreation Date: January 10, 2010Last Updated: February 10, 2010Document Ref: 1.0 Version: 1.0

Approvals:

Mr. Yousef Al Salman General Manager / Project Sponsor , Zoujaj

Mr. Hatem Al Fadli Group Finance Manager , Zoujaj

Zulfiaqar Ali Najeeb Project Manager, Zoujaj

Sathyanarayana Sarma Project Manager, Sierra Atlantic

Document Control

Change Record1

Date Author Version Change Reference

10-Jan-2010

Padmaiah V Draft 1.0 No Previous Document

19-Jan -2010

Sathyanarayana Sarma

Draft 1.0 Not Applicable

23-Jan-2010


Draft 1.1 Not Applicable

10-Feb-2010


1.0 Version Change

Reviewers

Name Position

Sathyanarayana Sarma Project Manager – Sierra AtlanticMr. Balan Asst Group Finance Manager – Zoujaj Mr. Anantha Krishnan Oracle CoE, Sierra Atlantic

Distribution

Copy No. Name Location

1 Library Master Project Library2 Zoujaj Project Manager Riyadh, Saudi Arabia3

Note To Holders:

If you receive an electronic copy of this document and print it out, please write your name on the equivalent of the cover page, for document control purposes.

If you receive a hard copy of this document, please write your name on the front cover, for document control purposes.

File Ref: document.doc Zoujaj / Sierra Confidential Document Control iii

Contents

Document Control...............................................................................................ii

Introduction & Scope.....................................................................................4

Future Business Model..................................................................................5

Future Processes............................................................................................9

Future Process Descriptions........................................................................10

Future Process Diagrams............................................................................13CE.BP.01 Define and Maintain Banks....................................................13CE.BP.02 Define Payment Templates....................................................14CE.BP.03 Define Cash Forecasting Template........................................15CE.BP.04 Define Cash Positioning Worksheet.......................................16CE.BP.05 Bank Transfers.......................................................................17CE.BP.06 Clear Transactions.................................................................18CE.BP.07 Create Miscellaneous Transactions.......................................19CE.BP.08 Generate Cash Forecasts.......................................................20CE.BP.09 Generate Cash Positioning....................................................21CE.BP.10 Generate Reports...................................................................22

Cash Management Business Solution Matrix..............................................23Critical Requirements............................................................................23Current Benchmark Activities................................................................24Current Bottlenecks...............................................................................25

Open and Closed Issues for this Deliverable..............................................26Open Issues............................................................................................26Closed Issues.........................................................................................26

File Ref: document.doc Zoujaj / Sierra Confidential Document Control iii

Introduction & Scope

This document consists of the Future Process designs including high-level design, the various Organizations (Divisions) at National Company for Glass Industries - Zoujaj will operate after the Oracle Cash Management system is implemented in this project.

The Process Designs included in this document are generic and intended to apply across the whole of the Organization(s). Designs for variants, such as business units or departments, will be produced in this deliverable. The generic process model explains in high-level terms how work will flow in the future and who will be responsible for completing the activities. It is composed of the following components:

Future Business Model (Proposed Model) – A detailed diagram and necessary descriptions for any proposed business set ups that would form the basis of the proposed processes.

Process Flow Diagram—A description of the process level (high-level) design and sub processes in graphical form wherever applicable.

Process Descriptions & Events—A high-level, textual description of the process that is executed in response to each event, together with an identification of the processes main inputs and outputs.

Sub Process Flow Diagram & Description - A description of the sub process level design and sub processes in graphical form. A textual description and graphical representation of the process that is executed in response to each event, together with an identification of the process’ main inputs and outputs.

File Ref: document.doc Zoujaj / Sierra Confidential Future Process Descriptions 11 of 26

Future Business Model

Cash Management module will carry out the business functions of Bank Account (s) Management, Bank Reconciliation, Cash Positioning and Cash Forecasting. Oracle Cash Management is an Enterprise cash management solution that helps effectively manage and control the cash cycle. With Cash Management, the business requirements of Bank Account Management, Reconciliation, Cash Positioning and Forecasting activities are comprehensively met.

The broad scope of Cash Management module will be as follows:

1. Define and Maintain Banks and Bank Branches:

a. Bank Definition and Maintenance : Banks and Bank Branches are defined and maintained in Oracle Cash Management.

b. Security and Access Controls : Cash Management provides for a comprehensive security management facility for Bank Accounts. Bank Accounts are secured at the Legal Entity Level and access is given to various Divisions / Operating units. The Bank Account Access – Security and Setup mechanism controls the “Bank Account Access” and “Use” of the Organization’s Bank Accounts. This simplifies the Bank Access, Bank Account Maintainenace and Bank Account Reconciliation process.

2. Bank Account Transfers: Bank Account Transfers represents “Funds Transfer” between Organizations (Internal) Bank Accounts. For Funds Transfer, Cash Management provides the facility to define reusable templates that can be used during the Fund Transfer facility. Bank Account transfer creates a “Cash Flow” which can be cleared in the system.

3. Bank Reconciliation: The Reconciliation functionality provides the automatic or manual loading of bank statements and reconciling against system transactions. Validation and reconciliation of transactions can be reviewed and corrected online. For banks that provide electronic files, Bank Statements can be imported into Oracle Cash Management through Bank Statement Open Interface Tables. After the bank statements are imported into the system, the bank Reconciliation can be run for these banks. Miscellaneous transactions can also be created during the Reconciliation process to record bank initiated activities such as interest and bank charges. Bank Reconciliation in Cash Management is an integrated application that works with Receivables and Payables.


4. Clearing Receipts, Payments, Miscellaneous transactions: Transactions can be manually cleared in Cash Management after they have been cleared from the bank.

5. Creating Miscellaneous Transactions: Miscellaneous Transactions can be created for bank originated entries like Banks Charges etc. Miscellaneous charges are created as negative Miscellaneous Receipts in Oracle Receivables. During Reconciliation, Miscellaneous Payment (Ex: Bank Charges), which is a negative receipt, is reconciled to a payment bank statement line with a positive amount.

6. Cash Positioning: Cash Positioning is a planning tool that helps viewing daily “Cash Position” by currency or bank account. Cash positioning allows in the projection of cash needs, and evaluate Organization’s liquidity position. The daily cash positions are based on actual cash flows from various Oracle Applications (Receivables, Payables, etc). Cash Positioning can be generated on a daily basis for a single currency, multiple currencies, a single bank account, multiple bank accounts, and a Legal Entity.

7. Cash Forecasting: Cash Forecasting is a planning tool that anticipates the flow of cash in and out of business allows to project cash needs and evaluates the liquidity position. For using the Cash Forecasting feature in Oracle Cash Management, a Cash Forecasting template has to be defined in the system and to which the various sources and the periods are to be assigned. A Cash Forecasting template specifies the Cash Forecast specifications. It comprises of Rows (Sources) and Columns (Periods) for generating Cash Forecasts. Cash Forecasting involves two steps:

a. Creating a Cash Forecasting Template: A Cash Forecast template is a matrix, similar to spreadsheet, with each row defining the source of the cash flow and each column defining the forecast period in GL periods or in days.

b. Generating Cash Forecasts from the Templates: A Cash Forecast can be generated using the Submit Forecast window or by using the submit requests window in Oracle Cash Management. When the forecast is submitted, it generates the forecast information based on the parameters provided such as the start and the end date and currency, collects the necessary source data and summarizes the information as cash forecast amounts based on the forecast period specifications. The forecast data is available for update, inquiry or reporting purposes and can also be exported to a spreadsheet.

8. Generating Cash Management ReportsCash Management provides for a number of reports to review and analyze the Cash Management activities. Cash Management reports can be run to review the respective business reporting requirements.


Cash Management Set upsCash Management uses information from Oracle General Ledger, Oracle Payables and Oracle Receivables for Bank statements reconciliation; and from Oracle General Ledger, Oracle Order Entry, Oracle Payables, Oracle Purchasing, and Oracle Receivables for cash forecasting. Set ups steps in these respective modules / applications relating to cash management will need to be done before using Cash Management with them.

Cash Management fully integrates with General ledger, Receivables, Payables and Purchasing as depicted in the chart below

System ParametersSystem parameters determine, for example, the default options for manual reconciliation windows, and the control settings for the Auto Reconciliation program and accounting controls for Cash Management transactions

I. Basic System Parameters:


Legal Entity: The name of legal entity that system parameters are applied to.

Ledger: The name of the Ledger for Cash Management accounting transactions. This value defaults from the GL Data Access Sets profile option.

Begin Date: Begin date is the date from which Cash Management will start displaying transactions. Cash Management will not display transactions dated earlier than the Begin Date.

II. System Controls and Cash Management Transaction Parameters:

1. System Controls: System Controls refer to the controls relating to Bank Reconciliation activities and determine the default options for manual reconciliation and control settings for Auto Reconciliation program.

2. Cash Management Transaction Controls: The Cash Management Transactions parameters control the Accounting of the Cash Management Transactions. Cash Management Transaction parameters include the

o Accounting - Exchange Rate Type (Corporate, User, etc), Cash Statement Cash Flow Rate Date, and Bank Transfer Rate Date ; and

o Bank Account Transfers Authorization –Authorization for Bank Account Transfers : Whether required or Not

Payment TemplatesA Payment Template is used during the Bank transfers. A Payment template allows defining reusable set of Bank Account transfer attributes and Payment Processing options. The Source Bank Account (the bank from which the transfer will be made) and Destination Bank Account (the Bank Account that will receive the transfer) will need to be specified in the template. During the Bank Account transfer, the system provides an option to select a Payment Template. If the Payment Template is selected all the attributes of the Payment Template will default into the Bank Account Transfer.

Accounting CalendarThe Accounting calendar defined and used in the General ledger is applicable in the Cash Management.


Future Processes


Future Process Descriptions

Sl No.

Event / Process id

Description of the Response to the Event

Inputs Outputs Frequency/ month

Responsibility

Corresponding Event id in RD20 (Current Business Process Document)

Changes from the existing process

1. CE.BP.01

Define Internal Banks Internal Banks and Bank Branches are defined and maintained in Cash Management.

Banks are secured at the Legal Entity level and Bank Account access is given to the respective Divisions (Operating Units). The Bank Accounts Access determines which Divisions (Operating Units) can access the Bank Account. Bank Account information can be accessed and updated any time (based on Account access).

The Payment Documents (Cheque Book Details) and GL accounts are assigned to the Bank Accounts.

List of Internal Banks details and respective GL Accounts

Defined Banks, Bank Branches and Bank Accounts

One Time, As and when required

Finance Department

CE RD 1.1 New Setup process

2. CE.BP.02

Define Payment TemplatesPayment templates are used during the Bank transfers. Payment Template specifies the default attributes and payment processing options for the Bank transfer.

Template Specifications

Defined Payment Template

One Time , Periodic

Finance Department

CE.RD.2.1 New Setup process

3. CE.BP.03

Define Cash Forecasting TemplateA Cash template provides for the

Template Specifications, Different

Defined Cash Forecasting

One Time , Periodic

Finance Department

CE RD 6.1CE RD 6.2

New Setup Process


Sl No.

Event / Process id



Responsibility



Cash Flow specifications. It consists of Rows (Sources) and Columns (Forecast Periods) for which a forecast can be generated. Cash Forecasting Template(s) are used during the Cash Forecast generation process.

Sources and periods

Template

4. CE.BP.04

Define Cash Positioning WorksheetA Cash Positioning Worksheet provides the Cash positioning specifications. It consists of Rows (Sources) and Columns (Bank Accounts) for generating the Cash Position.

Template Specifications - Different Sources and Bank Account inputs

Defined Cash Positioning Worksheet

One Time , Periodic

Finance Department

CE RD 6.4 CE RD 6.5

New Setup Process

5. CE.BP.05

Bank TransfersBank Transfers are to be validated before they can successfully processed. After validation and in “Settled” status, Bank Account Transfers are to be accounted. The “Create Accounting” process creates the Accounting entries for the Bank transfer and transfers the accounting to the General Ledger. Manual Bank Transfers create “Cash Flows”, which are available for clearing and reconciliation in Cash Management.

Payment Template

Bank transfer settled and accounted

As and when required.

Finance Department

CE.RD.2.1 New Process. Bank transfers between the Bank Accounts held by the respective divisions will be handled in Cash Management.

6. CE.BP.06

Clearing Transactions The system transactions can be manually cleared in the system

Bank Statement information

Cleared bank transactions

As and when required

Finance Department

CE RD 3.1 CE RD 4.1 CE RD 4.2

New Process. System Transactions


Sl No.

Event / Process id



Responsibility



after obtaining the statement from the bank. While clearing the transactions, the transaction cleared date and cleared amount need to be mentioned.

and System Transactions

can be cleared in the system.

7. CE.BP.07

Create Miscellaneous TransactionsMisc Receipts can be created during the clearing process for any entries like Bank charges etc in the Bank Statement and not reflected in the Oracle system.

Defined Receivables Activities, Bank statements

Created Miscellaneous transactions

At the time of clearing

Finance Department

CE RD 5.1 New Process.

8. CE.BP.08

Cash Forecasts – Generate Cash Forecasts Cash Forecasts can be generated at periodic intervals to view the Cash Forecast for the desired period.

Defined Cash Forecast Template

Cash Forecast Statement


Finance Department

CE RD 6.2CE RD 6.3

New Process.Cash Forecasts will be generated online in the new system.

9. CE.BP.09

Cash Positioning – Generate Cash Positioning Cash positioning can be generated on a daily basis for a single currency, multiple currencies, a single bank account and multiple bank accounts. The daily cash positions are based on actual cash flows in various Oracle Applications.

Defined Cash Positioning Worksheet

Cash Positioning Statement


Finance Department

CE RD 6.4 New Process. Cash Positioning will be generated online in the new system i.e. Oracle Cash Management

10. CE.BP.10

Generate ReportsCash Management provides a number of reports to review Cash management activities. The following are some of the useful reports that can be generated

Report Parameters

Report As and When required

Finance Department

CE RD 6.5 New Process. Reports can be generated Online in the new system i.e. Oracle


Sl No.

Event / Process id



Responsibility



from Cash Management and can be used for reconciliation and reporting :

1. Cash Forecast Report2. Cleared Transaction report3. Cash Positioning Statement4. GL Reconciliation Report

Cash Management


Future Process Diagrams

CE.BP.01 Define and Maintain Banks

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Open and Closed Issues for this Deliverable 14 of 28

CE.BP.02 Define Payment Templates

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CE.BP.03 Define Cash Forecasting Template

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CE.BP.04 Define Cash Positioning Worksheet

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CE.BP.05 Bank Transfers

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CE.BP.06 Clear Transactions

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CE.BP.07 Create Miscellaneous Transactions

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CE.BP.08 Generate Cash Forecasts

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CE.BP.09 Generate Cash Positioning

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CE.BP.10 Generate Reports

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Cash Management Business Solution Matrix

Critical Requirements

S.No

Critical Requirements as documented in RD.020

Future Business Solution Corresponding Process Id in BP.080

Remarks

1 Inter Division Cash Transfers – Recording of entries on time

Zoujaj Inter Division Cash transfers will be handled directly in General Ledger through Inter Division Unit Accounts.

NA Complete Solution

2 Recording of Misc Charges, Bank Commission, and Interest Income etc during bank reconciliation.

Misc charges / transactions can be generated in the system during the clearing process and transactions can be accounted and transferred to the General Ledger.

CE.BP.07

3 Centralization / Consolidation of Cash and Bank Activities

Receipts will be recorded in Receivables and Payments will be entered in Payables modules in the new system. Reconciliation can be performed in Cash Management with Bank Statements.

NA

4 Estimated Projection of Bank Balance.

Cash Forecasting can be used to project cash balances

CE.BP.08 Complete Solution

5 Cash Flow statement and Cash Forecasting

Cash Flow and Cash Forecasting Statements can be generated in Cash Management (to the extent of available information in the system)


6 Elimination of Clearing Accounts for Cash Transfers

Clearing Accounts will be used only wherever required. Ex: Cash clearing Account during clearing transactions.


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Current Benchmark Activities

S.No

Current Benchmark as documented in RD.020


Remarks

1 Recording of Export Sale Realizations

Sales Invoices and Receipts against these Invoices will be entered and processed in the Accounts Receivable module. Receipts will be applied to the respective invoices.

AR.BP.10AR.BP.11

Complete Solution

2 Inter Bank Transactions All Inter Division/ Unit Bank transactions will be handled in General Ledger. However Bank Transfers between Bank Accounts within the same division will be handled in Cash management


3 Collection of Cash Sales Receipts by Petty Cashier

Receipts collected by Petty Cashier can be entered and processed in Oracle Receivables.

AR.BP.11 Complete Solution

4 Segregation of Bank Accounts by Major activity

Different Bank Accounts can be defined and maintained in the System


5 Cash forecasts in accordance with projections & Sales Orders/ Production Plans for the year.

Cash Forecasts can be generated in Cash management for system maintained information


6 Debit/Credit Advice from various Banks.

For Debit / Credit Advices, the transactions can be created directly as Misc Receipts during the Clearing activity


7 Bank Statement from various Banks and reconciliation

Bank Statements received can be entered manually in the system and used for reconciliation purposes with system transaction. Alternatively system transactions can be cleared based on the bank clearance date.


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Current Bottlenecks

S.No

Critical Requirements as documented in RD.020


Remarks

1 Delayed collection of Bank Statement from Various Banks

Transactions can be manually cleared in the system. Upon clearing, the cash clearing account will be closed and cash account will be debited / credited accordingly.


2 Delay in reconciliation of Export Sales realizations with billing

Export Billing and respective realizations will be handled through Accounts Receivable module. There will no separate systems for billing and recording of receipts.

AR.BP.10AR.BP.11

Complete Solution

3 Reconciliation process is not automated for banks

Bank Transactions will be cleared in the system after obtaining the Bank Statement.


4 Cash forecast is done manually. There is no uniform method of preparing cash forecasts as these are adjusted manually every month / periodic basis based on business events / developments in the organization.

Cash Forecasting can be generated online in the new system with the Cash Forecasting Template


5 Inter Division Fund transfers: Manual clearing of temporary accounts created for transfer of funds between divisions.

There will no clearing accounts for funds transfers as all Receipts will be recorded in Accounts Receivable and all payments will be handled in Accounts Payable.Also for inter division transfers as required by Zoujaj, they will be handled directly in General Ledger through Inter Division Unit Accounts.

NA Complete Solution

6 Reporting Requirements – Current system provides for only limited reporting

Reports relating to Cash Management like Cash Forecasting, Cash Positioning, etc can be generated online in the new system.


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Open and Closed Issues for this Deliverable

Open Issues

ID Issue Resolution Responsibility Target Date

Impact Date

Closed Issues

ID Issue Resolution Responsibility Target Date

Impact Date

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