11i period end ap

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Oracle Payables Period End process

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I) period-end processing in Oracle Purchasing Release 11i.IntroductionThe procedures for performing period-end processing in Oracle Purchasing Release 11i.

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Business RequirementsWe must reconcile the purchasing activity for the accounting period that is to be closed.

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StepsThe following steps are taken in performing period-end processing for Oracle Purchasing.

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Complete All Transactions for the Period Being ClosedEnsure that all transactions have been entered for the period being closed.

Completing all transactions for Oracle Purchasing:

1. Complete Requisitions

2. Complete Purchase Orders and Releases

3. Complete Receipts and Returns

Submit the Confirm Receipts Workflow Select Orders process in Purchasing to send notifications through the Web, email, or Notification Details Web page (accessible through the Notifications Summary menu in Purchasing) to requestors or buyers who create requisitions in Purchasing or Oracle SelfService Purchasing. It lets people know they should have received an item.

The Confirm Receipts workflow sends notifications for items with a Destination or DeliverTo Type of Expense, a Routing of Direct Delivery, and a NeedBy date that is equal to or later than todays date.

Requestors can create receipt transactions by responding to the notification.

1. Print all new Purchase Orders

2. Respond to all Workflow Notifications

Notifications may either require action e.g. notify approver approval required, or are FYI notifications only e.g. notify requestor requisition has been approved. Users should close all FYI notifications and respond to those that require a response.

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Review the Current and Future Commitments (Optional)Run the Purchase Order Commitment by Period Report

The Purchase Order Commitment By Period Report shows the monetary value of purchased commitments for a specified period and the next five periods. You can use the report sorted by buyer to monitor buyer performance. You can also use the report when negotiating with a supplier by limiting the commitments to a specific supplier.

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Review the Outstanding and Overdue Purchase Orders (Optional)Run the following reports:

Purchase Order Detail Report

Open Purchase Orders (by Buyer) Report

Open Purchase Orders (by Cost Center) Report

These reports can be used to review all, specific standard, or planned purchase orders. The quantity ordered and quantity received is displayed so the status of the purchase orders can be monitored.

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Follow Up Receipts - Check With SuppliersFrom the details obtained from the Purchase Order Detail Report regarding un-receipted purchase orders, the appropriate department can then follow up with the suppliers as to the status of the ordered items.

If the goods have been received, but the receipt has not entered into Oracle Purchasing, then the receipt transaction needs to be actioned by the appropriate personnel.

Attention: Where you have selected to accrue receipts at period end, make sure that all receipts have been entered for a specific period before creating receipt accruals for that period. It is not necessary to enter all the receipts for a period prior to closing that period. Simply backdate the receipt date when entering receipts for a closed period.

Warning: Where you have Oracle Inventory installed, it is not possible to process a receipt to a closed Purchasing period.

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Identify and Review Un-invoiced Receipts (Period-End Accruals)By running the Un-invoiced Receipts Report, all or specific un-invoiced receipts that can be accrued, can be reviewed. These are items that have been received that the supplier has not invoiced you for yet. Receipt accruals can be reviewed by account and by item. This report indicates exactly what has to be accrued, and for what amount, and helps in the preparation of accrual entries.

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Follow Up Outstanding InvoicesFor any items identified to have been received but not invoiced, the appropriate department can then follow up the details from the Un-invoiced Receipts Report with the supplier. Entering of invoices, matching of unmatched invoices, and resolution of any invoice holds, where possible, should be carried out at this point in the period-end process.

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Complete the Oracle Payables Period-End ProcessComplete the steps to close the Oracle Payables period, which corresponds to the Oracle Purchasing period being closed, to enable creation of receipts accrual entries. Performing the Oracle Payables Period-End process, effectively prevents any further invoices or payments being entered into Oracle Payables for the closed period.

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Run the Receipt Accruals - Period End ProcessRun the Receipt Accruals - Period-End process to accrue receipts, as no journal entries are created when receipt transactions are entered. This process is used to create period-end accruals for un-invoiced receipts for Expense distributions for a specific purchasing period. Each time the process is run, Oracle Purchasing creates an un-posted journal entry batch in the General Ledger for the receipt accruals. Journal entries are created for the amount of the receipt liabilities, debiting the charge account and crediting the Receipt Accrual Liability Account.

If encumbrance or budgetary control are being used, another journal entries batch is created, corresponding to the encumbrance reversal entries for the un-invoiced receipts that were accrued. The accrual journal entries are then reversed out at the start of the new accounting period when you open the next Purchasing period. Oracle Purchasing creates accrual entries only up to the quantity the supplier did not invoice for partially invoiced receipts.

Attention: This step is only required if the Accrue Expense Items flag is set to Period End, on the Accrual tabbed region of the Purchasing Options window for the current Organisation.When the Accrue Expense Items flag is set to At Receipt, a reversal is not required.

If encumbrance or budgetary control is being used, Oracle Purchasing reverses the encumbrance entry when creating the corresponding accrual entry.

Identify the purchasing period for the receipt accrual entries. Oracle Purchasing creates receipt accruals for all receipts entered up to the end of the nominated period.

This process can be run as many times as needed.

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Reconcile Accrual Accounts - Perpetual AccrualsIdentify the period-end balances of the following accounts in the General Ledger:

Purchase Price Variance

A/P Accrual Account

Inventory Account - (Refer to Chapter 3 Period-End Procedures for Oracle Inventory)

Reconcile the balance of the Purchase Price Variance account using the Purchase Price Variance Report.

Manually remove the Invoice Price Variance amount from the A/P Accrual Account using your General Ledger.

Identify the Invoice Price Variances amount and Accrued Receipts amount in the A/P Accrual Account. Run the Invoice Price Variance Report for the current period. Identify the invoice price variance for all purchase orders charged to the Inventory A/P Accrual Account and compare it with the balance of the Invoice Price Variance account in the General Ledger.

At any given time, the balance of the A/P accrual accounts can account for the following transactions:

Uninvoiced Receipts

Over-invoiced Receipts

Errors(Invoices or inventory transactions charged to this Account by mistake)

You need to analyze the balance of the A/P accrual accounts, distinguish accrued receipts from invoice price variances, and identify errors.

The Accrual Reconciliation Report is used to analyse un-invoiced receipts and to reconcile the balance of the Accounts Payable accrual accounts.

This report enables you to identify the following problems in receiving, purchasing, inventory, work in process, or accounts payable transactions:

Quantities differ between receipts and invoices

Incorrect purchase order or invoice unit prices

Discrepancies in supplier billing

Invoice matched to the wrong purchase order distribution

Received against the wrong purchase order or order line

Miscellaneous inventory or work in process transactions that do not belong to the accrual accounts

Payables entries for tax and freight that do not belong to the accrual accounts

The Purchasing Options can be set to accrue both Expense and Inventory purchases as they are received. When this happens, an Accounts Payable liability is temporarily recorded to the Expense or Inventory Accounts Payable accrual accounts. When the invoice is matched and approved by Oracle Payables, the Accounts Payable accrual accounts are cleared, and the liability is recorded from the supplier site.

There are two versions of this report, detailed as follows:

The Accrual Reconciliation Rebuild Report

This version of the report selects the accounting entries from the appropriate source (sub-ledgers). This accounting information resides in a temporary table, and remains until this information is rebuilt again. Typically, this report is run at period end.

The Accrual Reconciliation Report

This version of the report uses the accrual information residing in the temporary tables that was selected the most recent time the Accrual Reconciliation Rebuild Report was run. This report is typically run throughout the accounting period, providing interim reports, whereas the rebuild report is used to select

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