Getting Started with Account Reconciliation Manager (ARM)

Finit has delivered solutions for the office of finance 20 years, beginning in 2002 with a focus on Oracle EPM. In 2011, we were the first OneStream implementation partner and delivered the first OneStream solution to go live. We no longer offer consulting services for Oracle EPM. However, the functional experience and technical expertise built from this experience form the foundation of our industry-leading OneStream practice.

The Oracle Financial Close Management Suite (FCM) which includes 3 modules in the latest version (11.1.2.4): Close Manager (CM), Account Reconciliation Manager (ARM), and Supplemental Data Manager (SDM).  Upper Management decides they want to focus on implementing ARM first.  These modules can be configured independently.  When focusing on ARM, what is next?  Where do you begin?

Understanding your “As Is” Process

The best place to start any project is to understand the current process.  Here are some examples of key questions that will need to be answered in order to set up ARM:

• Who prepares reconciliations in your organization?
• Who signs off on reconciliations?  Are there situations where more than one person signs off on a reconciliation?
• What reports or extracts, if any, do the preparers use to retrieve their data?
• Are there any standard Excel templates that preparers utilize to complete a reconciliation?
• How frequently are reconciliations performed? 
• What level of detail is a reconciliation performed at? 
• Are there any accounts or locations that are summarized for reconciliation purposes?
• Is any subledger data used in performing reconciliations?
• What reporting do you currently have on reconciliations?
• What reporting do you feel is lacking or time consuming to develop as part of your current process? 

ARM

Once you have the questions answered, this will drive the ARM Configuration for your company. 

ARM Terminology

Here are some key terms that will help you understand how ARM is set up.

• Profiles – A profile stores the master data of a reconciliation such as preparers, frequency, and due dates.
• Reconciliations – When a profile is moved into a period, it becomes a reconciliation.  This is what an end user will see when logging into the tool.
• Formats – A format determines how a reconciliation is performed. 
• Attributes – Attributes are assigned to formats or profiles which allow users to filter on reconciliations.  There are two types of attributes in ARM: System and Custom.

ARM Required Setup

When you first log into ARM as an Administrator, a popup window will appear.  This will list all of the key items that need to be set up in ARM.  The checklist includes the following:

• Formats – ARM requires at least 1 format.  There are 2 different layouts that can be applied to a format: Account Analysis or Balance Comparison.  An Account Analysis layout shows the ending balance that the preparer needs to support.  A Balance Comparison layout is used to determine if 2 values agree. 
• Frequency – Frequency is used to drive how often an account needs to be reconciled.
• Profile Segments – Each Profile needs to have a unique identification.  This can be segmented based on the level of detail that your organization performs reconciliations.  An example of Profile Segment is Entity and Account.
• Currencies – There are a couple of decision points that need to be made related to currency.  The first decision point is whether or not the application will be a single currency or multi-currency application.  If one reconciliation is performed in Euro and another reconciliation is performed in US Dollar, then the application needs to be set up as a Multi-Currency.  If all reconciliations are performed in a single currency, then the application can be set up as a single currency.  If the application is set up as Multi-Currency, the second decision point is how many currency buckets are needed.  ARM allows you to enable up to 3 currency buckets.
• Profiles – Once you have the above set up, you are now able to create a profile which will become a reconciliation. 

ARM Optional Setup

ARM does allow for some additional functionality to be set up.

• System Attributes – System Attributes include the following: Process, Account Type, and Risk Rating. 
• Custom Attributes allow you assign members that are unique to your organization.  An example would be if you have different teams that perform reconciliations, an attribute can be created and assigned to the profiles to identify the various teams.  This would allow end users to be able to filter on the teams.
• Filters – Pre-defined filters can be created from any field in ARM.  When setting up a filter, you have to define whether the filter applies to a Profile, Reconciliation, or Transaction.

ARM Due Dates

In version 11.1.2.4, ARM released some changes related to calculating due dates for reconciliations.  Here are the parameters that will drive the setup.

• The reconciliation is for June close which is completed in July.
• Preparer has 15 working days to complete the reconciliation.
• Reviewer has 5 days to complete the sign off.
• July 3^rd does not count as a work day.
• The books are closed in 5 working days.

Three settings drive due date calculations.

• System Settings – Holiday Rules

   

  • Holiday rules can be set up to exclude holidays in the calculation of a due date.
  • If a holiday rule is not set up, then the due date would be July 21st.
  • Multiple Holiday Rules can be set up for each region.
• System Settings – Organizational Units

   

  • Organizational Units drive what days are considered “Work Days”. 
  • Holiday rules are then assigned to the Organizational Unit.
  • Multiple Organizational Units can be created based upon region.
• Profiles

   

  • Properties – Assign the Organizational Unit to the Profile.
  • Workflow – Preparer

     

    • Assign the number of days that the preparer has to complete

       

      • Can be calculated from 2 dates:

         

        • End Date – Last day of the month (15 Days)
        • Close Date – Date the books are closed for the month (10 Days
  • Workflow – Reviewer

     

    • Assign the number of days the reviewer has to sign off on the reconciliations

For more information about ARM or other products, please contact us.  We’re always glad to be of help.