Fund Transfer Work in R12

Fund transfers are supported directly in Oracle Cash management; this feature allows you to create account transfers between internal bank accounts manually or automatically through physical cash pools. 

The related cash flows are stored in Oracle Cash Management for reporting purposes and are reflected in positioning. Payment processing and accounting is managed using Oracle Payments and Oracle Subledger accounting. 

Funds transfer basically can be done in 2 ways  

When you do not require payment document to be generated. 

This is used when the transfer has been made by the bank and you just have to record the same into the system. For this purpose, you can go to the bank account transfer window and select the option "Settle through Oracle payments" as "No". Fill in the rest of the fields and validate the the transfer. This will create a transfer transaction with the status as "Settled".

You can also provide a standing instruction to the bank to make the bank transfer and would be know about the transfer through the bank statement. You can create the bank statement line as a sweep in or sweep out line and record the bank account transfer.

When a payment document is required. 

This is used when for example you draw a check to make the bank transfer or any other payment document. For this purpose, select the option "Settle through Oracle payments" as "Yes". Fill in the rest of the fields and validate the the transfer. 

This will create a transfer transaction with the status as "Settlement in Process". 

After this you need to go to the funds disbursement process manager and issue the payment document. Process similar to the batch payment in AP.

The bank account transfer can also be initiated through cash positioning by using Physical Cash pool.

Please note that this require the intercompany or intracompany rule to be set in the ledger depending on the type of transfer you are making.