Overdraft A/c in 11i

[innovator]

Hi Friends,

How to handle the Overdraft Account?




With Regards,
Sri

[tgs100]

Oracle Treasury module gives you better functionality for this. As per my knowledge, there is no specific setups involved for this. Your cash account will be showing credit balance for that bank account. If the bank charges interest amount for overdraft, then you need to create AP invoice and make payment.

Cheers,
Saravanan

[innovator]

Hi Friends,

Thanks for your reply saravanan!

Let me put my Question in detail...

Assumption:
1. My company has an Overdraft A/c with ICICI Bank and our OD A/c limit is 3lacs.
2. As on 01Nov09 our OD A/c balance is 0.
3. We are making a payment for a vendor for 2lacs on 05Nov09 using our OD A/c.
4. And on 07Nov09 we are depositing 5lacs cash on OD A/c.

Automatically bank will deduct 2lacs+OD charges (assume Rs. 2000) on 07Nov09 and now my account balance will be Rs.2,98,000.00

My queries are...

1. If u takes the bank statement it will show
a) Dr. 2lacs on 05Nov09
b) Cr. 5lacs on 07Nov09
c) Dr. 2lacs on 07Nov09
d) Dr. 2000 on 07Nov09 and closing balance will be 2,98,000.00
So what entry I have to pass for c.

2. How my manual bank book and System bank book will get tally?


With Regards,
Sri

[tgs100]

<b>1. If u takes the bank statement it will show
a) Dr. 2lacs on 05Nov09
b) Cr. 5lacs on 07Nov09
c) Dr. 2lacs on 07Nov09
d) Dr. 2000 on 07Nov09 and closing balance will be 2,98,000.00
So what entry I have to pass for c.</b>

Your bank statement should show a,b and d lines (NOT c). If line "c" is also shown, the bank balance will be 98000 instead of 298000.

Or there will be a one more credit line to reverse line "a". Please clarify.

Cheers,
Saravanan

[innovator]

Hi,

s u r right saravanan

sorry "a" will not be shown in bank book, but in our system we will do payment on 05Nov09 and GL date will be same.

so how to do the reconciliation in this situation


With Regards,
Sri

[tgs100]

I could not understand the problem in the reconciliation?

If check (cheque) number appears in your bank statement, there should not be any issue in reconciliation. You have made payment (say cheque number 123) on 05th and bank clears it on 07th (Payment might have been disbursed to the vendor much earlier, for which there will be a bank charge) . You can do reconciliation based on the cheque number.

The last line, i.e bank charges or commission should be entered in the system and then reconcile the same.

Cheers,
Saravanan

[innovator]

Fine Saravanan I got it.....

Thanks for u r effort


With Regards,
Sri

[innovator]

Hi Friends,

Correction on my previous thread...

I had spoken to my auditor and he told that "a" will be shown in bank statement, but only "c" will not be shown in bank Statement.


With Regards,
Sri