period closing guide - oracle consulting sam

Oracle Applications Period closing Processes

Oracle Consulting, India

Oracle Consulting, India Private circulation only

Chapter 1 :The Close Schedule

This gives a few hints & tips for period close procedures in GL, AP and AR.

Please, read very carefully this as it contains some very important hints and tips

which will help you perform your closing more easily.

Whenever possible, take advantage of overnight processing to avoid running into processing bottlenecks, for all modules.

1. For your first closing :

Before closing the first go-live period, it is advised to close the period just before go-live period.

Example : if go-live month is September, before closing September, close August.

This allows :

to detect some journals or transactions which have been entered in August, by mistake, and which should really be in September instead.

to do your first closing on an ‘easy’ period, since it contains very few entries (only mistakes actually), in addition to data conversion entries.

2. Establish clear cut deadlines for when data will and will not be accepted for inclusion in the period. After that point, everything goes into the next period.

3. Notify all users when the system is not available during the closing to prevent new transactions from being entered on the period in the process of being closed.

4. Notify users when the system is available again.

5. If you find inappropriate usage of accounts, you may need to modify some of your setups and/or retrain some of your users so this does not happen again.


6. For all modules I recommend that you have only one open period at a time. You could have activity going into one period when you meant for it to go into another period. This is due to the General Ledger date defaulting to the current date and if that date is within an open period it will use that date. Also, there are known problems with items being posted with one side of the entry in one period and the other side in the next period. I find it to be just too risky to have more than one period open. If you minimize the time it takes to close, this should not be an issue.

7. Tip for AR : Set up your Unapplied Cash, Unidentified Cash, On-Account Cash and Accounts Receivables accounts once and for all and do not change them. Processes in Oracle Receivable, such as applying receipts and creating adjustments, do not allow you to access these values which means you cannot override them. In these processes, Oracle Receivables derives the accounts based on the accounts that were used when the remittance bank was originally created, no matter how long ago that was. If these accounts are stable, reconciliation is fairly straight forward. If they are not stable, reconciling can be much more cumbersome and you may see these old accounts for what seems like forever.

8. Tip for AR : Your Unapplied, On-Account, and Unidentified accounts should use a specific account, not your cash or Accounts Receivable accounts. Often the Unapplied, On-Account and Unidentified accounts are all the same account, which is fine.

9. Tip for AP : Do not enter prepayment by debiting the prepayment account in the distribution lines of the invoice. Those lines will not be regarding as ‘liability’ and will not be taken into account in the balance of your supplier.


Chapter 2 :Oracle Payables Period Check List – Detailed Instructions

This describes the actions to be performed and reports to be printed before closing a period in Oracle Payables Version 11i.

Business Requirements

The aim of Sub-ledger closing is to enable, for a given period, reconciliation of the balances and transactions of Sub-ledger accounting with those of general accounting.

Attention : The option chosen for the transfer of Sub-ledger journals to General Ledger, either in detail or in summary, may, in some cases, have a direct impact on the auditability of accounting data.

The decision of transferring in detail or in summary belongs to each country, according to their specific tax and internal reporting requirements.

Whenever it is possible, it is highly recommended to transfer in summary.

Closing Process

1. Check unapplied prepayments

Check if there are any unapplied prepayments which should have been applied to invoices, and which have not been, by mistake.

Run the Prepayment Status Report and set the report parameter ‘Unapproved Invoices only’ to ‘Yes’ to identify all invoices which are not approved.

Include Prepayments : ‘Yes’ Include Credit/Debit memos : ‘No’ Include Invoices : ‘No’

2. Approve all invoices

PURPOSE OF PROCEDURE : All non approved invoices will not be transferred to GL. Therefore, you should check that there are no unapproved invoices in AP in the period you are closing.

You can :

A – Either submit the program of automatic approval for all invoices and manually release the remaining holds which could not be released automatically. STEPS :


Run the Invoice Register and set the report parameter ‘Unapproved Invoices only’ to ‘Yes’ to identify all invoices which are not approved. Run the Payables Approval process : this process checks the PO matching, tax,

period status, exchange rate and distribution information for invoices and either applies or releases invoice holds. This process automatically produces a report called Auto Approval Report which displays the name and number of holds placed or released. Run the Invoice on Hold Report to identify the remaining holds by supplier

and invoice.

You can also submit the Invoice on Hold Report before every payment batch to help identify invoices you want to release from hold.

Attention : once you have released all holds do not forget to check that all invoices are approved, for instance by submitting the Invoice Register for unapproved invoices again.

B – Or submit a report which prints all unapproved invoices, release holds and approve all invoices manually and individually. STEPS :

Run the Invoice Register and set the report parameter ‘Unapproved Invoices only’ to ‘Yes’ to identify all invoices which need to be approved. Run the Invoice on Hold Report to identify the remaining holds by supplier

and invoice.

Attention : once you have released all holds do not forget to check that all invoices are approved, for instance by submitting the Invoice Register for unapproved invoices again.

3. Review all transactions & payments to be transferred to GL

PURPOSE OF PROCEDURE : review accounting entries before transferring the data to GL.

STEPS FOR INVOICES :

Run the Posting Hold Report to identify invoices for which Oracle Payables cannot create journal entries because there is a posting hold, distribution variance, ... (Optional) Run the Expense Distribution Detail Report to review detail invoice

distribution accounting information.

STEPS FOR PAYMENTS :

Check that all payment batches have been created on the correct accounting period. Navigate to the ‘Payment Batch’ screen in order to confirm or cancel

payment batches which are not confirmed. Run the Payment Register to review payments made in the period. The report

is sorted by Bank Account. (Optional) Run the Payment Distribution Report to review detailed payment

distribution accounting information. The report is sorted by Bank Account.

Attention : it is not possible to close a period in AP which contains not confirmed payment batches.

4. Transfer all transactions & payments to GL


The transfer from Oracle Receivables to General Ledger creates unposted Journals in General Ledger (see step 11).

Note that the transfer will create a separate journal for the following categories :

• Purchase Invoices

• Payments

• Prepayment Applications

• ...

Transfer invoices and payments to GL using the Payables Transfer to General Ledger Program. Select the audit parameters, set the report parameter ‘Submit Journal Import’ to ‘Yes’ and the report parameter ‘Create Summary Journal’ to ‘No’.

Attention : this program does not update the balances in Oracle General Ledger. You must post these journal entries in GL (task 5).

5. Review the result of the transfer from AP to GL

Oracle Payables automatically prints the Accounts Payable Journal Entry Audit Report after you transfer accounting information to your general ledger. The report shows the total number and amount of journal entries for each batch so that you can easily verify the results after you post.

Use the Accounts Payable Journal Entry Exception Report to identify all exceptions, such as an invalid account or a missing exchange rate, that occurred during the transfer from AP to GL. This report is also automatically printed after you transfer accounting information to your general ledger.

6. Post GL batches

To update GL balances with Payables entries, you need to post the GL batches created by the Transfer to GL program. This is done in General Ledger using the Post Journals functionality.

If you do not perform this step manually it is automatically handled by the industrialisation process overnight.

7. (Optional)Run the Unposted Invoice Sweep

Oracle Payables prevents you from closing a period which contains unposted invoices or payments.

The Unposted Invoice Sweep program allows to move all unposted invoices and payments from one accounting period to another accounting period. When you submit this report, you enter the name of the period you want to move invoices and payments from, and the name of the period you want to move to. Oracle Payables then changes the GL Date of all unposted invoices and payments in the period you want to move from, to the first day of the accounting period you want to move to.

When you submit this report you can :

A - either chose not to transfer the unposted invoices and payments but only to review them before actually transferring them. To do this you must set the report parameter ‘Sweep Now’ to ‘No’. Oracle prints the Preliminary Invoice Sweep Report.


B - Or chose to transfer all unposted invoices and payments from one accounting period to another. To do this you must set the report parameter ‘Sweep Now’ to ‘Yes’. Oracle prints the Actual Invoice Sweep Report.

8. Reconcile Accounts Payable Activity with GL journals

To reconcile your Accounts Payable Trial Balance for a given period :

• add the current period’s posted invoices

total invoice amount from Posted Invoice Register

• subtract the current period’s posted payments from the prior period’s Accounts Payable Trial Balance.

total cash plus discounts taken from the Posted Payment Register

This amount should equal the balance for the current period’s Accounts Payable Trial Balance.

You can also use the Accounts Payable Trial Balance to the Accounts Payable liability in your general ledger.

STEPS FOR INVOICES :

(Optional) Run the Posted Invoice Register to verify that the total invoice amount equals the total invoice distribution amount. (Optional) Run the Accounts Payable Trial Balance to list all unpaid and

partially paid invoices by supplier. You can use this report to verify that the total account payable liabilities in Oracle Payables equal those in your General Ledger.

Attention : The Accounts Payable Trial Balance only takes into account data which has been transferred to GL.

STEPS FOR PAYMENTS :

(Optional) Run the Posted Payment Register to review posted payments in a given period. Oracle Payable sorts and subtotals the listing by bank and 0bank account. (Optional) Run the Posted Invoice Register to verify that the total invoice

amount equals the total invoice distribution amount.

9. Close AP accounting period

After reconciling the accounts payable activity for the period close the period in Oracle Payables. You can close a period in Oracle Payables independently of Oracle Receivables and Oracle General Ledger.

Attention : it is not possible to close a period in AP which contains not confirmed payment batches. You must confirm your payment batches to update Oracle Payables payment history before you can close a period. This prevents you from creating payments in a period which you have already closed.


Attention : When you close a period, Oracle Payables checks if you have any unposted invoices or payments in that period. If you have any, Oracle Payables prevents you from closing the period.

10. Enter Accruals for invoices not yet received

This is done manually in GL for countries who do not use PO.

11. Open the next AP accounting period

Open the next accounting period in AP.

Note that it is not recommended to have more than one Oracle Payables period open at one time.

Oracle Payables prevents you from opening a period if it is an adjusting period.


Chapter 3 :Oracle Receivables Period Check List – Detailed Instructions

This describes the actions to be performed and reports to be printed before closing a period in Oracle Receivables Version 11.

Business Requirements

•

Why don’t my AR and GL numbers match ?

The values you find in Oracle Receivables may not match the values you find in Oracle General Ledger, for three reasons :

1. Inappropriate use of accounts, for example, crediting Accounts Receivable in a negative adjustment or using an Accounts Receivable account as the debit side of a credit memo transaction.

2. Using more than one Accounts Receivable account. Your Aging includes all receivables accounts but you view the same data account by account in General Ledger, causing them to appear out of sync, but they are not.

3. Manual Journal Entries. Data entered directly into in General Ledger does not flow back to Oracle Receivables.

Closing Process

1. Complete the manual payments and adjustments for the period

It is not necessary to approve all unapproved adjustments or to complete or delete all incomplete invoices and credit memos before you close a period. However, the longer it has been since you created these transactions, the harder it is to remember what you were doing and why. It is a good practice to clean them up at least at the end of each period.

2. Complete the manual invoices, credit memos & corrections for the period

3. Run the Monthly Invoice Interface


If this process is not automatic you must submit it manually, or, if somebody does it for you, check that it completed successfully.

4. Confirm that there are no unapproved adjustments

Run the Adjustment Approval Report to verify that there are no unapproved adjustment. Set the report parameters as follows :

Order by : ‘Customer Name’ Status : ‘Waiting Approval

Skip the rest of the parameters. There should be no data on this report. If there is, contact your manager to approve these adjustments.

5. Check for incomplete transactions

Navigate to the Transaction Summary screen, enter a query, click on the ‘Incomplete’ box to uncheck it and execute the query.

You should see a message ‘Query caused no record to be retrieved’. If some records are retrieved work with the appropriate person to complete or delete the documents, and then requery to insure that there are no longer any incomplete invoices.

6. Notify all users that the system is not available

Notify all users that the system is now available for inquiries only. No updates may be made until the close is complete.

7. Review transactions to be transferred to GL

You can either use the Journal Entries Report (Summary by Category) or the Transaction Register and Sales Journal by GL Account.

Run the Journal Entries Report (Summary by Category) to verify what the journal entries will look like.

Detail by Account : ‘Yes’ Detail by Category : ‘Yes’ Summary be Account : ‘Yes’ Summary be Category : ‘Yes’ GL Posting Status : ‘Unposted’ Beginning GL Date : ‘Period start date Ending GL Date : ‘Period start date

Review the Journal Entries Report (Summary by Category) prior to transferring the data to GL. It is often easier to modify an account prior to posting than it is after posting. Even if you find an account that you cannot modify - you can immediately create an offset and create a new record with the proper account. Then the final General Ledger numbers will look okay and your General Ledger and Accounts Receivable values will still match.


Check to see if any unusual accounts were used. If found, run the Journal Entries Report again, specifying: ‘Yes’ to Detail by Category and ‘Yes’ only for the categories where you found problems. Turn to the responsible person to correct the problem. Rerun the Journal Entries Report (Summary by Category).

Run the Transaction Register to check that all postable items are reflected on you Sales Journal. In case there is a variance run the Sales Journal by Customer to identify on which customers the variance shows. Run the Sales Journal by GL Account to ensure that the Transaction Register

matches your Sales Journal.

Attention : this report only prints invoices and credit memos. Therefore if other transactions, such as adjustments, impact revenue accounts, they will not appear on this report.

To match both foreign and functional currency amounts to your general ledger run your Sales Journal by currency.

8. Balance to the Aged Trial Balance

Reconcile the outstanding customer balance at the beginning of a given period with the ending balance for the same period. The following table shows the components which affect a customer’s balance and the reports which can be used to reconcile these.

Reconcile Outstanding Customer Balances Beginning Balance Aged Trial Balance

(Use last day of previous accounting period) + Transactions Transaction Register - Adjustments Adjustment Register

- Invoice Exceptions Invoice Exceptions Report - Applied Receipts Applied Receipts Register

- Unapplied Receipts Unapplied Receipts Register = Ending Balance Aged Trial Balance

(Use last day of accounting period)

Careful : For the Beginning Balance you should enter the last day of the previous accounting period in the field ‘As of Date’. If you enter the first day of the accounting period you are closing, the transactions of the first day of the period you are closing are doubled because they appear on the Beginning and on the Ending Balances.

You use the Invoice Exceptions Report to adjust the Transaction Register for any transactions which are not open to receivables and therefore do not show up on your agings.

In the following report submissions, be sure to use the period start date and period end date as the General Ledger dates for all reports. Do not use any dates other than the General Ledger dates when requesting the reports.

Run the Aged Trial Balance – by account Report Summary : ‘Invoice Summary’ Report Format : ‘Brief’


As of Date : ‘Period end date’ Aging Bucket Name : ‘the standard bucket name’ Show On Account : ‘Age’

Careful : the total by account and by customer is correct. It shows debit and credit amounts and the balance.

However the total by account only shows debit amounts AND NOT CREDIT AMOUNTS which is misleading when the user wishes to control the balance for each account. Only the total for all accounts shows the credit total (currently under investigation by Help Desk).

Use the Grand Total Amount for the Outstanding Amount Column.

Run the Transaction Register Order by : ‘Customer’ GL Date Low : ‘Period start date’ GL Date High : ‘Period end date’

Use the ‘Sum for ______ Class’ total for the ‘Functional Currency’ for each class of transactions (Credit Memos, Debit Memos, Invoices, Chargebacks) - WATCH OUT the ‘Sum for Invoice Class’ is before the last total on the report. On the spreadsheet - sum the amounts for each of these transactions (compare to the ‘Grand Total in Functional Currency’ on the final page of the report - they should be identical - if not correct as needed. Use the signs as they appear on the report (Credit Memos are negative - the rest are positive)

Run the Unapplied Receipts Register Format Option : ‘Detailed’ Receipt GL Date Low : ‘Period start date’ Receipt GL Date High : ‘Period end date’

Use the ‘Total for Report’ values - add the ‘On Account Amount’ to the Unapplied Amount and multiply the sum by -1. (((On Account + Unapplied) * (-1)) - enter as the sign you get as a result of this calculation

Run the Applied Receipts Register Order by : ‘Customer’ Apply Date Low : leave blank Apply Date High : leave blank Receipt GL Date Low : ‘Period start date’ Receipt GL Date High : ‘Period end date’

Use the ‘Grand Total For Functional Currency’ for the ‘Total’ Column - enter as a negative number.

Run the Adjustment Register Order by : ‘Customer’ GL Date Low : ‘Period start date’ GL Date High : ‘Period end date’

Use the ‘Total for Report’ for the Functional Amount column - enter as whatever sign appears on this report.

Run the Invoice Exceptions Report GL Date Low : ‘Period start date’ GL Date High : ‘Period end date’ Order by : ‘Customer’


Use the ‘Grand Total’ for the Functional Amount column - enter as whatever sign appears on the report.

Run the Transaction Reconciliation Report Transaction Date from : ‘Period start date’ Transaction Date to : ‘Period end date’

Complete the «Balancing AR to the Aging» spreadsheet with the values you obtained from these reports.

If your derived balance does not equal your new Aging Balance, you may find that you :

1. Did not use the same dates for every report 2. Used dates other than the General Ledger dates (or in addition to the General

Ledger dates) for the selection; 3. Entered the wrong amounts from the various reports into the spreadsheet

(especially easy to do with the Transaction Register); 4. Used the wrong sign. Credit memos and applied receipts should be negative. 5. Adjustments, unapplied activity and «invoice exceptions» may be negative or

positive; 6. Have overlapping dates in the «Aging Bucket» definitions;

9. Reconcile your receipts

Run the Receipt Journal Report in the balance mode to review details of receipts which appear in your Journal Entry Report.

Order by : ‘Accounting Flexfield’ Report Mode : ‘Balance’

Run the Receipt Register to review receipts by status (unidentified, unapplied, applied, cancelled,…) for a given range of GL dates.

The total of the two reports should match.

10. Transfer transactions to the General Ledger

The transfer from Oracle Receivables to General Ledger creates unposted Journals in General Ledger (see step 11).

Note that the transfer will create a separate journal for the following categories :

• Invoices

• Receipts

• Miscellaneous Receipts

• Adjustments

• ...

Run the General Ledger Interface (Menu patch : Interface/General Ledger. Summary or Detail : ‘Detail’ GL Posted Date : ‘end of period date’ GL Start Date : ‘period start date’


GL End Date : ‘period end date’ Run Journal Import : ‘Yes’

Note this submits multiple processes. Verify they all finished successfully. Confirm that the Unposted/Unbalanced Items report does not contain any data.

Check the report for the following processes :

General Ledger Transfer Program : verify debit total = credit total Unposted Items Report : review each page to ensure no unposted item exists. If

there are unposted items in the report, it means that those items have not been transferred from AR tables to GL interface tables. This data is still in AR tables, unposted. If there are unposted items you should call support in France. Journal Import : insure that you have a status of ‘SUCCESS’ and check the number of batches and headers created. If the status is ‘SUCCESS’ take a note of the Journal Import request id. You will use this number to query on the batch in the GL Journal entry screen. The request id is a part of the batch name. Therefore if your request id is 285048, to query on it, you should enter %285048% in the field called Batch in the Find Journals window which appears when you open the GL journal entry screen. If the status is ‘ERROR’ the data has been transferred from AR tables to GL interface tables but not from the GL interface tables to GL tables. Therefore, this data cannot be viewed in GL. If the status is ‘ERROR’ check on the same report : • The number of errors • The error codes • The meaning of the error codes on the last page of the report • Make the corrections, if necessary (enable code combinations,…) • Resubmit Journal Import

If you cannot solve the problem yourself you should call support in France. (Optional) Run the Journal General (180 Char) to check that the total amount

by source matches the total amount printed the Journal Import report. Type : ‘Source Item’ Posting Status : ‘Unposted’ Period : ‘period of posting’ GL Start Date : ‘period start date’ GL End Date : ‘period end date’ Batch Name : leave blank

Note this submits multiple processes. Verify they all finished successfully. Confirm that the Unposted/Unbalanced Items report does not contain any data.

11. Post GL batches

To update GL balances with Receivables entries, you need to post the GL batches created by the Transfer to GL program. This is done in General Ledger using the Post Journals functionality.


12. Reconcile Accounts Receivable Activity to General Ledger

Using a list of your key Accounts Receivable, Cash and Unapplied Cash accounts and the Journal Entries Report (Summary by Category) in AR, document which accounts comprise each of the report totals, i.e. determine the totals by source and category. See Exhibit D: Reconciling AR and GL -- spreadsheet and instructions.

Start with the spreadsheet you used to balance to the Aging. Add a column for each of your Accounts Receivable accounts and your cash and unapplied cash accounts (on-account and unidentified cash too, if they are different accounts).

If you have more than one company, split out each company and account combination.

Using the values in the Journal Entries Report (Summary by Category), fill in the detail numbers for each of the accounts for the applicable activity.

Use only the net amounts and debit amounts should be positive and credit amounts should be negative.

This gives you a detailed breakdown of which accounts comprise each category, and points out where an account was used inappropriately.

Note the usage of each account both appropriate and inappropriate. If it is a standard usage, include the amount on the same line as the amount you reported when balancing to the Aging. If it is an inappropriate usage, add a new line for the amount and a description of what was done.

Cross foot the amounts broken out by account with the «Balancing AR to the Aging» amounts. The amounts should match, if not, re-check the numbers. Since the inappropriate accounts are on separate lines, they will not throw off your cross validation.

One area where you will not be able to directly cross foot is Receipt Applications. This activity appears in two standard reports : the Applied Receipts Register and the Unapplied Activity Report (thus two separate lines on the «Balance AR to the Aging» spreadsheet). They fall into the single General Ledger category of Trade Receipts on the Journal Entries report. When you cross foot, you must include the combination of the Applied Receipts and Unapplied Activity reports against the Trade Receipts (AR) totals. Note that the cash, unapplied, unidentified and on-accounts accounts should be on separate lines since they are not used in determining the net effect on the Aging.

Possible sources of problems :

1. You did not run the Journal Entries report for all accounts. If you select specific accounts based on what you are expecting you may be missing some activity. Unless you are researching a specific issue, always run for all accounts.

Attention : do not forget cash discount accounts or you will have discrepancies between GL and AR !!

1. You had more than one period open in Oracle Receivables and activity appeared in an unexpected period.

2. You had unpostable items (they should have appeared on the Unposted Items report). They appear on the standard reports (so you used them in balancing to the Aging) but they were not transferred to the General Ledger due to unbalanced debits and credits. Contact Help Desk.


The following table lists the proper and improper usage of accounts for each category and how to enter the data into the spreadsheet to indicate how the data will accounted for.

Category Where to Add

Adjustment There should be no AR account activity in this category. If they occur - add a special line for each - add to the column for the applicable AR account.

Adjustment (AR) There should only be AR account activity in this category. For each account add to the Adjustment activity line - split by AR account . If there are non-AR accounts in this category, add a special line for each - add a new column for the non-AR account.

CM Applications and CM Applications (AR)

These should net to zero - and should include only AR Accounts - ( if there are non-AR accounts add a special line for each and add a new column to the spreadsheet for each account). If each account does not net to zero, enter the amount for each account in the proper column on the spreadsheet.

Credit Memos There should be no AR account activity in this category. If they occur, add a special line for each and add to the column for the applicable AR account.

Credit Memos (AR) There should only be AR account activity in this category. For each account add to the Credit Memo activity line - split by AR account. There should be no non-AR accounts in this category. If they occur, add a special line for each and add a new column for the non-AR account.

Misc Receipts and Misc Receipts (Distributions)

There should be no AR account activity in these categories. If they occur, add a special line for each and add to the column for the applicable AR account. Add the cash amount to the appropriate column.

Sales Invoices There should be no AR account activity in this category. If they occur, add a special line for each and add to the column for the applicable AR account.

Sales Invoices (AR) There should only be AR account activity in this category. For each account add to the Invoice activity line - split by AR account. There should be no non-AR accounts in this category. If they occur, add a special line for each and add a column for the applicable non-AR account.

Trade Receipts (AR) There should only be AR account activity in this category. For each account add to the Applied Receipts activity line - split by AR account. There should be no non-AR accounts in this category. If they occur, add a special line for each and add a column for the non- AR account. Add unapplied amounts to the appropriate columns.

Trade Remittances There should be no AR account activity in this category. If they occur, add a special line for each and add to the column for the applicable AR account. This should represent your Cash Account(s) only. Add cash amounts to the appropriate columns.

Note: the ‘Total for Currency’ debit and credit amounts should be equal but the ‘Total for AR’ debit and credit amounts may not be equal.

Note that the Unapplied Amount plus the unapplied activity (from the journal details) should equal the Applied Payment and Unapplied Activity totals from the reports.

Run the Account Analysis Report in General Ledger for every key account you included in your reconciliation spreadsheet. This may include various different cost centres, divisions … so be sure that your ranges allow for all possible sub-segment values for the accounts you are working with. Your


key accounts should include : Accounts Receivable, Cash, Unapplied Cash and AP/AR Clearing.

Type : ‘Source Item’ Currency : functional currency Balance Type : ‘Actual’ Order by : ’Account Segment’

If you are working with different companies, you should run a separate report for each company and account combination.

For each account and company combination add the starting and ending balances from the Account Analysis Report to the «Reconciling AR and GL» spreadsheet (on the gray lines).

Add one line for each journal entry that has a Source other than Receivables. Note the Source, Category, Batch Name and amount by account.

Note that debits are positive and credits are negative.

Foot the totals for the Starting Balance plus or minus all activity for each account (including manual journal entries) and compare this amount to the new Ending Balance.

If they do not match, check for the following causes :

1. Manual Journal Entries - be sure to document on the spreadsheet. Find out why these are being done, if we are using the system properly - there should never be manual journal entries.

2. Activity from Sources other than AR - find out why these are happening and get this stopped now. Only Accounts Receivable should be using AR accounts.

3. Your General Ledger Interface did not complete successfully. Verify that you had no unposted items in the General Ledger Interface table or in Oracle Receivables.

4. You have changed the standard accounts used for Unapplied, Unidentified, and On-Account receipts, or for Accounts Receivable. Even if you change the defaults for these accounts, the original accounts are retained in the existing transactions and used if you have any subsequent activity against them. You must run Account Analysis Report for each of the old accounts also and include their activity on the spreadsheet.

5. The dates you used for the Account Analysis Report are not consistent with those you used for the Oracle Receivables reports.

6. The Accounts Receivable journal entries have not yet been posted in General Ledger. Remember that until General Ledger closes the period, these values may change and you will have to recreate the Account Analysis Report and re-complete the spreadsheet.

7. Improper set up values. For example, using your cash account for your Unapplied, On-Account, and Unidentified accounts. They should use a special account, not your cash or Accounts Receivable accounts. Often the Unapplied, On-Account and Unidentified accounts are all the same account, which is fine.


If you still do not balance, you need to review the data at a lower level. Check which of the totals by Source and Category in General Ledger do not match the totals for the same sources and categories in Accounts Receivable.

One of the drawbacks of the Account Analysis report is that it lacks subtotals by Source and Category. You must calculate the totals manually. The level of difficulty in doing this is directly proportional to the number of journal entries that were created since this report includes one line for each journal entry. If you post daily this could be quite difficult. If you post once or twice a month, this will be much easier. See which categories or sources have problems.

When you have narrowed the differences down to specific accounts, sources and categories, run the Journal Entries report again but request the Detail by Category and specify just the accounts and categories you must research. You should be able to see exactly which transactions made up the values that you see. If you still have problems, get Help Desk involved to do more research.

Document each of the inappropriate account uses, and manual journal entries that caused your values to be out of sync and add to your totals. You should now tie to the ending balances.

13. Close accounting period in Oracle Receivables

You can now close the period in Oracle Receivables (Menu path : Control/Accounting/Open-Close periods). You can do this in Oracle Receivables independently of Oracle Payables and Oracle General Ledger.

Oracle Receivables check for unposted items, there shouldn’t be any. If there are none, SAVE.

If there are unposted items, this is due to problems in the General Ledger interface. Contact Help Desk.

14. Open the next accounting period in Oracle Receivables

Open the next accounting period in AR.

Note that you should not have more than one Oracle Receivables period open at one time.

15. Notify all users that the system is available

Notify all users that they can use the system again.


Chapter 4 :Reconciling Accounts Receivable Cash to GL

1. Complete all receipt entry and re-applications for the period

2. Run AR Payment Reports

Run the Deposited Cash – Applied Detail to reconcile Oracle Receivables with your bank statement. This report shows applied amounts, unapplied amounts, and applied miscellaneous cash. The information is printed based on the deposit date you enter. It is printed by Bank account. Run the Deposited Cash – Open Detail to reconcile Oracle Receivables with

your bank statement. This report shows the total applied, unapplied, and on-account amount for each deposit date. The information is printed based on the deposit date you enter. It is printed by Bank account. Run the Receipt Register Run the Reversed Receipt Report (order by Remittance Bank) Run the Journal Entries Report (Summary by Category) for trade receipts and

Miscellaneous only. Currency : functional currency Balance Type : ‘Actual’ Order by : ’Account Segment’

Compare totals on the individual reports to the Journal Entries report to see if they tie, including :

• The net amount for Misc Remittance (on the Journal Entries report) should equal the Misc Applied total (in the Deposited Cash - Applied Details Report);

• The net amount for Trade Remittances (on the Journal Entries report) should equal the AR Applied total (in the Deposited Cash - Applied Details Report);

• The Credit amount for Misc Remittance (on the Journal Entries report) should equal the Total For Miscellaneous Cash Receipts (in the Reversed Receipts Report);

• The Credit amount for Trade Remittances (on the Journal Entries report) should equal the Total For Invoice Related Cash Receipts (in the Reversed Receipts Report).

Does the Receipt Register Total = Net total on the Journal Entries Report ?

Check that the accounts found on the Journal Entries Report are proper :

• Misc Cash Accounts (Misc Receipts Distributions)

• Only cash accounts in the cash categories (Misc. Remittance, Trade Remittances)

• Only Accounts Receivable in the Trade Receipts (AR) category.



• You have the version of the Reversed Receipt Report which does not include Miscellaneous Cash items and/or does not include subtotals at the end.

• Deposit Dates are not in the same range of dates as the General Ledger dates.

Warning : if you book your payments to your customers by entering a debit memo which credits the bank account, you should also print the Transaction Register for the Transaction Type ‘PAYMENT’ used to enter the debit memo (cf AR Procedures : Book a payment to a customer).

3. Run GL Account Analysis Report

Once all postings are completed for AR and GL for the period, you should :

Run the Account Analysis report in General Ledger for each of the cash accounts.

Compare the net activity amount on the Account Analysis report to the amount indicated on the Journal Entries Report - Summary by Category. They should match.

If Not :

• Confirm that there were no manual journal entries. If there were, note the total by account.

• Confirm that the only Source was Receivables. If not, note the total by account and source.

• Confirm that the net activity less these exceptions equals the Journal Entries Report amount.

If you still are not in balance :

• Verify entry by entry the values in the Account Analysis Report against the Journal Entries Report. If you find differences, run the Journal Entries report again, this time as ‘Detail by Account’ for each account where you have differences – compare.

Possible sources of problems : cash accounts being used improperly (e.g. in adjustments or as the unapplied account).


Chapter 5 :Reconciling Accounts Payables Cash to GL

1. Confirm all payment batches

Navigate to the ‘Payment Batch’ screen in order to confirm or cancel payment batches which are not confirmed.

2. Run AP Posted Payment Register

Run the Posted Payment Register Sort Posted Payments by : ‘Bank account, Payment’


1. Entering payments, using the invoice transaction, that is by crediting a bank account in the distribution line of a credit memo will distort this report. Indeed, this transaction will not appear on the Posted Payment Register since this report is based on the payment tables, not on the invoice tables. It is recommended to use a suspense account, and to book manually the payment in GL and net to zero the suspense account.

The report can only be submitted for an open period.

Recommendation : Do not try to match your AP Payments with your bank statement using a GL Report, because AP bank entries are usually transferred in detail to GL, and the amounts on the bank accounts do not correspond with the amount on the bank statement.

3. Run GL Account Analysis Report

Once all postings are completed for AP and GL for the period, you should :

Run the Account Analysis report in General Ledger for each of the cash accounts.

Compare the net activity amount on the Account Analysis report to the amount indicated on the Posted Payment Register. They should match.


Chapter 6 : Oracle General Ledger Period Check List – Detailed Instructions

This describes the actions to be performed and reports to be printed before closing a period in Oracle General Ledger Version 11.

Closing Process

1. Enter Journals

• Enter manual journals

• Generate your recurring journal entries.

2. Run Payroll Interface

Run the payroll interface (if not automatic).

Check that the Journal Import has a status of ‘SUCCESS’ and check the number of batches and headers created. If the status is ‘ERROR’ check on the same report : • The number of errors • The error codes • The meaning of the error codes on the last page of the report • Do the corrections, if necessary (enable code combinations,…) • Resubmit Journal Import

3. Interfaces from AP and AR to Oracle General Ledger

Make sure, with the people working in the Accounts Payable and Accounts Receivable departments that they have transfered to GL all data from Oracle Payables and Receivables.

Careful : ‘Posting’ or ‘transfering’ data from Oracle Payables and Receivables into Oracle General Ledger, creates journals in GL but does not automatically update GL balances.

The journals created by the Journal Import program must be posted manually by the user. Depending on your organisation, this task may be performed by the persons responsible for Payables and Receivables posting to GL or by the General Ledger person.


4. Post Journal Entries

Post your :

• manual journals

• recurring journal entries

• Payroll journal entries

• (depending on your organisation) Oracle Payables and Receivables journals.

5. Check unposted journals, correct and post

You must check if you have any unposted journals. If there are any, do the necessary corrections and post them. To check, you can use the following reports :

Run the Account Analysis Run the Journal Batch Summary Pièces – synthèse des lots Run the Journal Entry Report Pièces / Devises Run the Journal Line Report Pièces / Ecritures Run the Journal Entry Report Pièces / Général Run the Journal Entry Report

Possible sources of problem :

• Unbalanced journal : total debit and credit amounts do not match. • The period is not opened. You can only post a journal in an open period.

6. Generate & post Mass Allocation Journals

• Generate Mass Allocation Journals

• Post Mass Allocation Journals

7. Analyse Transit accounts

Use the Account Analysis Report to analyse your transit accounts by source.

Enter the necessary adjustment journals, and post your adjustment journals.

8. Currency Revaluation

(Optional).

9. Produce Accounting Reports

Run the Trial Balance - Summary 1


Run the Trial Balance - Expanded Run the Journal Entry Report Run the Journals General (180 char.) Run the Journals Summary

10. Close Period

Periods in GL have the following statuses :

Never Opened : The period has never been opened Future Entry : You can enter journals but you cannot post them Open : You can enter and post journals Closed : You cannot enter journals. The period can be reopened Permanently closed : Nothing can be done in that period. It cannot be reopened.

Current practise is to close the period, using the ‘Closed’ status to be able to reopen them to book adjustment entries.

Oracle does not prevent you from closing a period which contains unposted batches.

Suggestion : periods are ‘Permanently closed’ once you have completed all accounting entries, and produced all reports regarding that period. This is usually done after yearly closing, and once the accounts have been approved by auditors.

Be sure that you are completely satisfied with an accounting period before you permanently close it because you cannot reopen a permanently closed period.

11. Open next GL Period

Open your next accounting in General Ledger.

To reduce processing time, keep as few accounting periods open as possible.

12. Reverse journals from previous accounting period


Chapter 7 : Inventory and Purchase

Purchasing module activities to be completed and the Control Purchasing periods of PO should be closed after ensuring that all transactions are completed.

Reconcile the Receiving Inspection account with GL and ensure that this account has value which is equivalent to receipts which are pending to be delivered to Inventory. This includes taxes which are forming part of receipts.

Subsequently Inventory period should be closed. Subsequently reconciliation should be carried out. Recommended method is that ensure that all transactions are completed to enter in the system. Ensure that all pending transactions costed and check that there is no reocrd is pending to be costed.

Subsequently close the Inventory period and run the Period Value Close Summary report and verify this report with GL inventory.

Also check the Transaction Historical Value Summary and Detail Report.

Always recommended to close the period immediatley after the end of the month. Please note back dated transactions are primary reason to have reconiliation differences between different reports.

The following are the reasons for differences bewteen Inventory and GL:

• Material account is used in Miscellaneous Receipt and Payment transactions of Inventory module. Also in Move transaction in Inventory

• Material account used in other modules

• Material account used in Intransit account wherein the material is not received by receiving organization at the end of the period. This is primary occured in Internal Sales order transactions.

• ISO localization entries are not properly passed to inventory due to wrong setup or transaction entry.

• Item attribute is expensed out but the charge account used as Material account while carrying out the material receipt transaction.

• Wrongly setup in Receiving Inspection account as Material account in Receiving organization paramters.

• Wrongly material account used in charge account for Service items and therefore while doing receipts system will account wrongly to materials account.

The following standard reports are helpful while carrying out the reconciliation exercise of Purchase and Inventory modules:

• All inventory value report

• Period Value Close Summary

• Transactional Historical Value summary and detail Report

• Material Distribution summary and detail report

• Transaction Register for various types of transactions Oracle Consulting, India Private circulation only

• Perform Inventory Period Close

• Make Sure The Inventory Manager Is Active And Has Run

• Make Sure That The Cost Manager Is Active & Has Run

• Work In Process (WIP) Period Close

• Make Sure The WIP Move Transaction Manager Is Active And Has Run

• View Status Of WIP Discrete Jobs And Their Associated Transactions

• Close All WIP Jobs For The Period

• Review Pending Activity

• Evaluate Transaction Interfaces

• Process All Sales Order Shipments

• Verify That All Sales Order Issues Have Been Completed

• Transfer Inventory Transactions To The General Ledger

• Review Report Generated From Running The Transfer Transactions To GL

• Process

• Balance Perpetual Inventory To The General Ledger

• Inventory Value Report

• Period Close Value Summary Report

• Material Account Distribution Detail Report

• Material Account Distribution Summary Report

• Oracle General Ledger Account Analysis Report For Inventory Valuation Accounts

• General Ledger Report For Inventory Valuation Accounts

• Close The Inventory Period For Each Defined Inventory Organization

• Open The Next Inventory Period For Each Inventory Organization Defined

• Perform Final Inventory To GL Reconciliation


Chapter 8 : Year End Closing

There is absolutely no particular step to perform in Oracle for the year end closing.

At the moment when you open the first period of the next year, Oracle automatically :

• calculates the result and books it to the account 'Retained Earnings' set up in your Set of Books

• calculates the carry forward for all balance sheet and Ownership/Stockholders' Equity accounts

• puts to zero the opening balance of the next fiscal year for profit and loss accounts

After you have opened the first period of the next year, every time you enter a transaction on the previous fiscal year, in GL, AP, AR or CE, Oracle automatically calculates the result and carry forward again. You have nothing to do.

Do not look for the journal entry which generates the result. It simply does not exist. But the carry forward is there.

You should be aware of something very important. The attribute 'Account Type', which can be :

• Asset • Liability • Expense • Revenue • Ownership/Stockholder's Equity

is used to calculate the result and to decide whether the balance should be carried forward at the beginning of the next fiscal year or put to zero.

This means that if your account type is not set up correctly, the carry forward and the result will not be correct. This is why you should be very careful when you set up a new account and tabulate until you see the window which shows the ‘Account type’ to select the correct value.

Careful : the default value attributed by Oracle if you do not populate this field yourself is 'Expense'.

We have already noticed that some account types have been set up incorrectly.

This is why I suggest that before opening the next fiscal year you send a mail to E-FAST Support to ask them to check all account types to make sure they are all correct. If some are incorrect, the corrections must be made by support. They cannot be made by you.


Do not worry about the account type of parent accounts such as accounts starting with ‘C’ and ‘GB’ because parent accounts do not have balances stored in the database. Their balances is calculated dynamically, based on the account types of the child accounts attached to them.

Only the account type of child accounts matter.


Chapter 9 : Frequently Asked Questions

This gives hints and tips about the sources of discrepancies between Sub-ledgers and GL and how to avoid or correct them.

Questions Answers

1. Printing Issues

The concurrent request ends correctly and the report can be viewed on the screen but cannot be printed, this maybe due to the printing style.

Submit the report again using another printing style in the printing options.

2. GL date versus Transaction date

I reversed an invoice, with transaction date 2-AUG-99 and GL date 31-JUL-99. The invoice appears in the GL report for July but not on the AP Trial balance for July

This is because the AP report is based on the transaction date, whereas the GL

report is based on the GL date. In your case, the transaction date and the GL

date are on two different periods.

3. Sub-ledger Transfers to GL

What happens if I try to transfer data on a period that is not open in GL ?

The report generated by Easylink (Journal import) displays the errors and gives

an explicit error message. The only thing to do is open the period and submit

the journal import again.

4. Sub-ledger Transfers to GL

In the transfer from AP/AR to GL what happens when a week belongs to 2 different months ?

The transfer from AP/AR to GL automatically creates one GL batch per period.

If a week belongs to 2 different months, 2 GL batches are created by the transfer

5. AR : Update revenue account on posted invoice

How can I update the revenue account on an AR invoice which has already been transferred to GL.

You should not enter manual GL adjustments, directly in GL, which have an impact on AR accounting data, and may create discrepancies between AR and GL accounting data even though this should not impact the total revenue. If the user makes a mistake when he enters the adjustment in GL, he can also create a difference between AR and GL on the total revenue. The reports, which are based on AR data, such as the report designed to help you fill in the P/L1 report, will be wrong. Modification of revenue account on invoices already transferred to GL should b e made as follows : 1- go to 'Invoice entry' screen 2- Query on the invoice you want to modify 3- Click on the button 'Accounting' 4- Change the revenue account directly on the accounting combination 5- Save your work 6- If you close and reopen the screen, you will see that the system created 2 lines :

ü one which cancels the original revenue line which you updated (negative ü sign) one which contains the new revenue account (positive sign)

7- Transfer to GL. You will see that the transfer to GL creates the 2 lines : a negative and a positive one.


Questions Answers

6. AR : Update revenue account on posted invoice If only a part of the invoice is booked on the wrong account. What can we do ?

The reversal is made accounting line by accounting line. In other words, if you have an invoice with two revenue lines and only one line is incorrect, you only need to reverse the incorrect line. The other line is unchanged.

7. AR : Update revenue account on posted invoice – GL Date On which GL Date will the correction be booked? For instance, if a correction is made 2 months after the original booking, will the correction be booked on the period of the original booking or on the period when the correction is made ?

The GL date is automatically defaulted to : the GL date of the original booking, if the period is still open

ü the GL date of the next open period, if the period of the original booking is ü closed.

It is not recommended to book it to period of the original booking if this period has already been closed because you will have to reconcile your accounts again for that period. After saving the change, you will see in the accounting screen, 2 additional lines : one which is the reversal of the original line, and a new line with the new account.

8. AR : Reconcile AR with GL Some revenue accounts are booked in AR and also directly GL. The balance of those accounts in AR and GL cannot be the same.

It really depends on what transactions you are referring to. If for instance, one employee refunds some money to you, you could enter this transaction in AR, using the miscellaneous receipt functionality, and a special customer dedicated to that kind of transactions. It is strongly recommended to do this because then the balance of your accounts is the same in AR and in GL.

9. AP : update distribution line of a posted invoice The invoice distribution is incorrect and the invoice is posted in GL.

You should not enter a manual adjustment directly in GL. You should reverse the distribution line in AP and enter a new line with the correct account. This change will automatically be transferred to GL

10 AP : duplicate invoice payment By mistake, an invoice was paid twice. How should I book the second payment ?

1. The second payment should first be booked in AP in order to update the supplier balance. You can do this by entering a credit memo. 2. However, you should not book the credit memo directly on the bank account in the distribution line of the credit memo, because this will distort the AP 3. report ‘AP Posted Payment Register’, which is used for bank reconciliation . You should book it to a suspense account 4. The payment should then be booked manually in GL. This entry will balance to 0 the suspense account used in AP to enter the credit memo (Credit the bank account, debit the suspense account).

11 AP : Forecast Outgoing Cash Create a payment batch, and indicate in the field 'Pay through date' until which due date you want to go. For instance, if you enter 30-NOV-99 in this field, all invoices with a due date smaller or equal to 30-NOV-99 will be included in the payment batch. Then you can print the 'Preliminary Payment Register' which gives you the total amount of the batch. If you do not want to pay those invoices yet, you can : • either cancel the payment batch and recreate it when you want to perform the payment • leave the payment batch with status 'Build' and only format it when you want to send the payment file to the bank. That way, you can update the payment batch until you send it to the bank. This does not take into account potential manual payments, but if you have only occasional manual payments for small amounts, may those do not have a big impact on your treasury forecast.


Exhibit A : Oracle Payables - Period Close Checklist Period Name: _________________ Period Close Date: ______________

Task Description Processed By

1. Check unapplied prepayments

2. Approve all invoices

3. Review all transactions & payments to be transferred to GL

4. Transfer all transactions & payments to GL

5. Review the result of the transfer from AP to GL

6. Post GL batches

7. (Optional) Run the Unposted Invoice Sweep

8. Reconcile Accounts Payable Activity with GL journals

9. Close AP accounting period

10. Enter Accruals for invoices not yet received

11. Open the next AP accounting period


Exhibit B : Oracle Receivables - Period Close Checklist Period Name : _________________ Period Close Date : ______________


1. Complete the manual payments and adjustments for the period

2. Complete the manual invoices, credit memos and corrections

3. Run the Invoice Interface

4. Confirm that their are no unapproved adjustments

5. Check for incomplete transactions

6. Notify all users that the system is not available

7. Review transactions to be transferred to GL

8. Balance to the Aged Trial Balance

9. Reconcile your receipts

10. Transfer Transactions to the General Ledger

11. Post GL batches

12. Reconcile Accounts Receivable to your General Ledger (for the key accounts)

13. Close AR accounting period

14. Open the next AR accounting period

15. Notify users that the system is available


Exhibit C : Oracle Receivables – Balancing AR to the Aging

Exhibit C: Balancing AR to the Aging (Spreadsheet)

MONTH: ________________

PREPARED BY: ______________________

ACTIVITY SOURCE

Starting Balance Aged Trial Balance - Old

Invoices Transaction Register Debit Memos Transaction Register

Credit Memos ( ) Transaction Register

Transaction Register Subtotal

Applied Payments ( ) Applied Receipts Register (Applied Amount Total)

Discounts Taken ( ) Applied Receipts Register (Earned Discount + Unearned Discount)

Unapplied Activity ( ) Unapplied Receipts Register (On-Account Amount + Unapplied Amount) * -1

Adjustments Adjustments Register (may be + or -)

Items Not Aged ( ) Invoice Exceptions Report

TOTAL

Ending Balance Aged Trial Balance - New

Difference Should be 0 (Total - Ending Balance)


Exhibit D : Oracle Receivables – Reconciling AR and GL

Exhibit D: Reconciling AR and GL (Spreadsheet)

MONTH: ________________

PREPARED BY: ______________________

ACTIVITY Balance

to Journal Entries

AR1 AR2 Cash1 Cash2 Unapplied

Aging Report Totals

Starting Balance

Invoices Debit Memos Credit Memos CM - Application Applied Payments Discounts Taken Unapplied Activity Adjustments Items Not Aged

Manual - Journal Entries

Cash-AR Cash-Misc. Unapplied Cash

NEW BALANCE NEW REPORT TOTALS

Difference

Current JE's JE's To Date TOTAL ATB- By Account Difference

Note - Unapplied activity impacts Aged Trial Balance but is included in the applied receipts total when posted to GL New Report Totals = The New Aging and The Account Analysis Reports (gray areas are from the Account Analysis Report) Add NEW BALANCE to JE's (current and to date) - should = ATB by Account totals


Exhibit E : Oracle General Ledger – Period Close Checklist Period Name : _________________ Period Close Date : ______________


1. Enter Journals

2. Run Payroll Interface

3. Check Interfaces from AP and AR to Oracle General Ledger

4. Post Journal Entries

5. Check unposted journals, correct and post

6. Generate & post Mass Allocation Journals

7. Analyse Transit accounts

8. Currency Revaluation

9. Produce Accounting Reports

10. Close Period

11. Open next GL Period

12. Reverse journals from previous accounting period


period closing guide - oracle consulting sam

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