How to set up Intercompany Balancing Rules

for Bank Account Transfers

The Bank Account Transfer creates two external transactions. An outflow (payables) external transaction is created for the From
Bank Account, and an inflow (receivables) external transaction is created for the To Bank Account. These transactions generate the
accounting entries when reconciled with bank statement lines.

Bank account transfer can be between an intercompany or intracompany, and the intercompany’s (FUN) Manage Intercompany
Balancing Rules and Manage Secondary and Clearing Company Balancing Options UI’s will be used to setup the default offset
accounts for these transactions. You will need to configure rules under both these setups if you anticipate transfers between bank
accounts belonging to the same legal entity and also between bank accounts belonging to different legal entities.

To distinguish Cash Management balancing rules from others, setup intercompany balancing rules with: Source as Cash
Management and Journal Category as Funds Transfer.

CASE 1: INTERCOMPANY BANK ACCOUNT TRANSFER

FROM BOFA-2869 (US1 LEGAL ENTITY) TO BNP-INTERNE EN EURO 999 (FRANCE LEGAL ENTITY)

Step 1: Create Intercompany Balancing Rules

Task: Manage Intercompany Balancing Rules

-Navigator> Setup and Maintenance > Manage Intercompany Balancing Rules task

-Create Legal Entity Rule for:

 From Legal Entity: US1 Legal Entity

 To Legal Entity: France Legal Entity
 Source: Cash Management
 Category: Funds Transfer

-Enter Receivables and Payables Accounts.

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 -Create Legal Entity Rule for:

 From Legal Entity: France Legal Entity

 To Legal Entity: US1 Legal Entity
 Source: Cash Management
 Category: Funds Transfer

-Enter Receivables and Payables Accounts.

Step 2: Create Bank Account Transfer (between bank accounts belonging to different legal entities)
Task: Create Bank Account Transfer

- Cash Management > Cash Balances > Click Transfer Funds or click the Panel drawer and click the Create Bank Account Transfer
task

-Submit Bank Account Transfer From BofA-2869 (US1 Legal Entity) to BNP-Interne en Euro 999 (France Legal Entity)

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Step 3: Review Bank Account Transfer Status
Task: Manage Bank Account Transfer

- Cash Management > Cash Balances > click the Panel drawer

- Click the Manage Bank Account Transfer task

Note: When you select “Settle transactions through Payments”, approval rules will be routed, and there will be other steps required to achieve Completed status.

Step 4: Review External Transactions created

Task: Manage Transactions

- Cash Management > Bank Statement and Reconciliation > Manage Transactions task

-Search by Origin: Bank Account Transfer

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Review External Transaction created for BofA-2869 (Outflow External Transaction)

Cash Account from

Bank Account Setup

(311) – Intercompany Segment (BNP)

Review External Transaction created for BNP- Interne en Euro 999 (Inflow External Transaction)

Cash Account from

Bank Account Setup

(101) – Intercompany Segment (BofA-2869)

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(Optional) Step 4: Submit Cash Position Data Extraction
Scheduled Processes

-Schedule New Process: Cash Position Data Extraction

(Optional) Step 5: Review Cash Position

Cash Management > Cash Balances > Cash Position

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Step 6: Reconcile External Transactions and Create Accounting Entries

External transactions created for Bank Transfers and Ad hoc payments can be journalized with the Create Accounting process. (After
they are reconciled against Bank Statements)

Any gain/loss calculation due to different currencies is handled by Subledger Accounting the same way it is currently handled for
other external transactions. No specific requirement identified for these transactions.

Specify Ledger Options Setup

 Check “Enable Intercompany Acocunting” to

allow intercompany balancing.
 The Intercompany Gain or Loss Account will
be made available in the future for cross
ledger transactions.

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 Sequencing of Intercompany Balancing Rules

You can define intercompany balancing rules at the following levels:

1. Primary balancing segment

2. Legal entity
3. Ledger
4. Chart of accounts

The rules are evaluated in the order shown above.

For example, you can define a Primary Balancing Segment rule and a Legal Entity level rule. If both rules can be used to balance a
particular journal, the Primary Balancing Segment rule is used, as it has a higher precedence.

You have flexibility in defining your intercompany balancing rules. You can have a simple setup in which you define one rule for your
chart of accounts. This rule is used for all intercompany balancing for all ledgers that use this chart of accounts. Alternatively, you can
have a more granular set of rules. For example, you can define a different rule for each legal entity and one chart of accounts rule to
cover any gaps in your rule definitions. You can gain even more granularity by defining rules for specific journal and/or category
combinations or intercompany transaction types.

For Bank Account Transfers, consider Journal Source: Cash Management / Journal Category: Funds Transfer

Please, refer to http://docs.oracle.com/cloud/latest/financialscs_gs/FAIGL/FAIGL1453212.htm#FAIGL316744 for additional

information on how to setup your Intercompany Balancing Rules

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 Manage Secondary and Clearing Company Balancing Options

Secondary and Clearing Company Balancing options are used to balance the second balancing segment and/or the third balancing
segment, when a transaction is unbalanced by one of these segments but is already balanced by the primary balancing segment.

This option is defined for a ledger but you can create rules for various Source and Category combinations.

Secondary and Clearing Company balancing options include the following settings:

 Intercompany Receivables and Intercompany Payables accounts: You can use as the template to build balancing accounts
for balancing segment 2 and balancing segment 3 when the journal is already balanced by primary balancing segment.
 Summarization options: You can choose to summarize lines within a legal entity before balancing lines are generated by
choosing the Summary Net option. Alternatively choose the Detail options so lines are not summarized before balancing
within a legal entity. Note that summarization always applies to balancing lines generated in a cross legal entity scenario.
 Clearing company options: Oracle recommends always setting clearing company options to handle many-to-many journals
as this avoids balancing failing during General Ledger Posting or Subledger Accounting Create Accounting process.

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BUG 25080900 - R11 RFI: 25060602 OFFSET ACCT FOR BAT NOT PULLED FROM INTERCOMPANY BALANCING
Note: There are known issues and bugs opened for Intercompany Bank Account Transfers:

Note: Currently in GSE Environments, when we submit an Intercompany Bank Transfer, and Settle transactions through Payments,
the Cash and Offset accounts for Inflow External transactions are not being updated as expected:

(FROM) BofA-2869 (TO) BNP – Interne en Euro 999

Outflow (Payables) External Transaction Inflow (Receivables) External Transaction

- Ok - Missing Cash and Offset Accounts: