This is in response of one offline mail as one of consultant asked some more information for Cash Clearing Account and Clearing Account, so thought to share here. His question was:
What is difference between "Cash Clearing Account" and clearing account in AR?
If you are using Oracle Cash Management, you need to define
- Bank Errors Account
- Bank Charges Account
- Cash Clearing Account
That mean for each bank account you plan on reconciling by using Cash Management. If you use Payables, you can override these accounts for
each payment document you define.Right.
If you set up Oracle Receivables to account for payments at clearing time, enter the cash clearing account you are associating with a bank account. When you create accounting entries for your unreconciled invoice payments, you credit your cash clearing account using this account. After you reconcile your invoice payments using Oracle Cash Management, when you create accounting entries for the cleared payments, you debit this cash clearing account and credit this bank account's cash account. The account you enter here defaults to the Cash Clearing Account field in the GL Accounts region of the Payment Documents window.
If you are using future dated payment methods, enter the clearing account you are associating with a payment document. When you pay an invoice with a payment document that uses a Manual Future Dated or Future Dated payment method and post payments within Payables,Receivables automatically debits your liability account and credits this account. When you clear this payment using automatic or manual reconciliation within Oracle Receivables or Oracle Cash Management then post payments within Payables, Receivables debits this cash clearing account and credits this bank account's cash account.
Clearing Accounts are used for AutoInvoice
The clearing account is for your imported transactions. Receivables uses the clearing account to hold any difference between the specified revenue amount and the selling price times the quantity for imported invoice lines. Receivables only uses the clearing account if you have enabled his feature for the invoice batch source of your imported transactions.
Normally, cash clearing account is used if your accounting is accrual Based.
Is there any relation between Cash Clearing and Reconciliation?
Cash clearing and reconciliation have no relation. You can use cash clearing if you want to account for the payment after its cleared in the bank and not on payment issue.
More over, you should note that reconciliation is a activity of matching a Payment / Receipt with bank statement.
Have a nice weekend.:)