Period-End processing in Payables R12

Accounts payable activity must be reconciled for the accounting period that is to be closed. The
following steps are taken in performing period-end processing for Oracle Payables.

The posting level for Oracle Payables must be determined when planning period-end procedures.
Where detail level accounting transactions are required to be posted to the General Ledger using
sub-ledger accounting (hereafter referred to as SLA), there may be technical constraints
involved, relating to the physical data storage volume, and posting and report processing speed
degradation caused by the sheer volume of posted transactions. In Release 12 the detailed level
of posting can be controlled by GL summarize options and also at SLA journal line type level.
Subledger Accounting can contain all of the detailed subledger accounting level analysis, so that
the general ledger can remain thin. Then, Subledger Accounting online inquiry and BI
Publisher reports can be utilized to report and analyze balances, and their
transactions.

Procedures:

1. Complete All Transactions for the Period Being Closed

Ensure that all transactions have been entered for the period being closed.
Completing all transactions for Oracle Payables:
* Complete Invoices and Credits
* Complete Prepayments
* Complete Expense Reports
* Complete Invoice Import
* Complete Payments
If you import transactions from an external system, or you are using Internet Expenses or Xpense
Xpress, ensure you have imported all transactions, and reviewed all audit trails for completeness.

One consideration for Accounts Payable where there are multiple operating units within the same
ledger is that all operating units must be ready to close at the same time. All of the operating
units that share a ledger also share the same period statuses. When you update the period status
to open in one operating unit, that period is opened for all operating units within the ledger.
When you attempt to update the period status to closed in one operating unit, the system checks
for unposted transactions in all operating units within the ledger. If there are unposted
transactions in any of the operating units, the system asks you to resolve the un-posted
transactions for those operating units before it allows you to close the period for the ledger. If
Multi-org Access Control is implemented, period closing can be performed across OUs from a
single responsibility, through one OU at a time.

2. Run the Payables Approval Process for All Invoices

Run the Payables Approval process to approve all unapproved invoices and invoice lines in the
system, so that they can be paid by Oracle Payments and posted to the general ledger.

3. Review and Resolve Amounts to Post to the General Ledger

a) Review the Invoice on Hold Report

This report enables review of any holds currently applied to invoices that would prevent the
payment and/or posting of these invoices. The report details all invoices that Oracle Payables
cannot select for posting and therefore cannot create journal entries. Where possible, resolve any
identified holds which will prevent posting to the general ledger, and then re-run the Payables
Approval process to approve these invoices.

b) Review the Journal Entries Report

This report enables review and analysis of accounting entries in the Payables subledger, as
accounted by SLA. Using the report parameters, you can produce a detailed or summary listing

of the accounting information you want to review. This report is owned by SLA. The report also
lists, in detail, transactions that have been accounted with error and all entries that could not be
transferred to the general ledger. When a transaction is accounted with errors, review the details
and make necessary changes. By altering the parameters, the report also lists those transactions
which have been posted in the general ledger, and those which have not been posted but have
been accounted. SLA groups the report by ledger, ledger currency, source, category, and event
class. Data is then sorted by accounting date, event type, supplier name, document number, and
voucher number.

c) Review the Unaccounted Transactions Report

This report enables review of all unaccounted invoice and payment transactions and a view of
the reason that Payables cannot account for a transaction. Accounts Payable sorts the report by
transaction type (invoice or payment), exception, supplier, transaction currency, and transaction
number. Run this report after you have run the Create Accounting Process. The report will then
show only transactions that had problems that prevented accounting. You can then correct the
problems and resubmit the accounting process. Note that this report does not include invoices
that have no distributions.

d) Optionally run a Payment Process Request at the month end

By running a month end Payment Process request, you may create a payment for as
many due invoices as possible.

e) Confirm all Payment Instructions

Run the Payment Instruction Register for the period that is to be closed, or finalize any
outstanding payments. Use Oracle Payments to confirm any payment instructions. Check the
status of the Payment Process Request/Payments/Payment Instructions to ensure that all
payments have been processed. The Payment Instruction Register lists each payment created for
a payment process profile or for a manual payment. Actual payments can be compared against

this register to verify that Oracle Payables/Oracle Payments has recorded payments correctly.
The report lists each payment in a payment process request, including setup
and overflow payment documents, in ascending order, by payment number. This Oracle
Financials E-Business Suite Release 12 Period End Procedures 24 report is automatically
submitted when payment instructions are being created and can also be submitted from the
standard report submission (SRS) screen.

Attention: Oracle Payables prevents the closing of a period in which all payments have not been
confirmed.

f) Optionally run the Payments Register

The Payment Register details payments printed in a particular accounting period. This report can
be used to review payment activity for each bank account used during the specified time period.
Warning: The report total only shows the net (less discounts) payment amount, whereas the
Posted Payment Register total is the total payment amount, including discounts. If only verifying
report totals, these two reports would not balance. Therefore it is necessary to subtract the
Discounts Taken from the Posted Payment Register report total and then compare this
calculated amount to the total displayed on the Payments Register Report.

4. Reconcile Payments to Bank Statement Activity for the Period

Once detailed bank statement information has been entered into Cash Management, the
information must be reconciled with the subledger transactions.
Cash Management provides two methods to undertake reconciliations:

a) Automatic
Bank statement details are automatically matched and reconciled with subledger transactions.
This method is ideally suited for bank accounts which have a high volume of transactions.

b) Manual
This method requires a manual match of bank statement details with subledger transactions. This
method is ideally suited to reconciling bank accounts which have a small volume of monthly
transactions. The manual reconciliation method can also be used to reconcile any bank statement
details, which could not be reconciled automatically.

5. Transfer All Approved Invoices and Payments to the General Ledger

Release 12 provides 3 modes of accounting: Final, Final Post and Draft. The transactions that
have been accounted in Final Post have already been transferred to, and posted in the general
ledger. The transactions that have been accounted in the Final Mode have been transferred to GL
or can still be within the subledger based on the parameter Transfer to General Ledger (either
'Yes or 'No') in the Create
Accounting program.
When accounting mode is Final and transfer to GL is set to No then, Transfer Journal Entries
to GL program needs to be run from the Standard Report Submission (SRS) window. Please
review the Transfer Journal Entries to GL report generated by this program; make sure there
are no errors reported on this report. The transactions in draft accounting mode can be included
on accounting reports but cannot be transferred to the general ledger. A draft entry does not
update balances and does not reserve funds.
SLA creates detail or summary journal entries for all eligible events when you post. The journal
entries are posted in Oracle General Ledger to update account balances. Invoice journal entries
debit the expense or other account entered on an invoice distribution line, and credit the liability
account specified on the invoice, unless you have modified the SLA rules to create alternative
accounting entries to address your specific business needs.

Payment journal entries debit the liability account and credit the cash account of the
bank account used to pay an invoice. The Create Accounting process transfers data to the
General Ledger tables, creating journal entries for these invoice and payment transactions.
Posting is determined by the parameter Post in GL which is set during Create Accounting.

Attention: The generated journal batch needs to be posted from within Oracle General Ledger if
the mode of accounting was Final, Transfer to General Ledger was Yes and Post in GL was
set to No.The journal batch will be automatically posted in General Ledger if the mode of
accounting was FINAL and Post in GL was set to Yes.

6. Review the Payables to General Ledger Posting process After Completion.

The following reports can be run to review the invoices and payments that were posted to Oracle
General Ledger, from Oracle Payables, for the period that is to be closed, i.e. the current
accounting period.

a) The Sub ledger Accounting Program Report generated by the Create Accounting
program. This report provides either the summary or details (dependent on the parameters
provided during Create Accounting program) of the Sub ledger journal entries created as a result
of running Create Accounting Program. This report also provides any errors that may have
occurred during generation of the journal entries.

b) The Posted Invoices Register

This report is used to review invoices for which information has been posted to Oracle General
Ledger to create journal entries, and can be used to verify that the total invoice amount equals the
total invoice distribution amount. The report lists each Accounts Payable Liability Accounting
Flex field and the invoices posted to the account.

c) The Posted Payments Register

This report is used to review the payments posted to Oracle General Ledger during a particular
accounting period, and can be used to review the payment activity for eachbank account used
during that period.

7. Submit the Unaccounted Transactions Sweep Program

The Unaccounted Transactions Sweep Program transfers unaccounted transactions from one
accounting period to another. Because you cannot close a Payables period that has unaccounted
transactions in it, if your accounting practices permit it, you might want to use this program to
change the accounting date of the transactions to the next open period. For example, you have
invoices for which you cannot resolve holds before the close, and your accounting practices
allow you to change invoice distribution GL dates, you can submit this program to change
invoice distribution GL dates to the first day of the next open period so you can close the current
period. The Unaccounted Transactions Sweep Program will not roll forward accounted
transactions, or accounted transactions with errors. To create successful accounting entries for
accounted transactions with errors, correct any accounting errors and resubmit the Create
Accounting Process. The program transfers unaccounted transactions to the period you specify
by updating the GL dates to the first day of the new period. You can then close the current
accounting period in Oracle Payables.

To submit the Unaccounted Transactions Sweep Program:

1. In the Control Payables Periods window if you try to close a period that has exceptions then
the system enables the Exceptions button.
2. Choose the Exceptions button in the Control Payables Periods window. Payables opens a
message window. From the window you can choose the following buttons:
Review (This submits the Period Close Exceptions Report.)
Sweep
3. Choose the Sweep button. Payables opens the Sweep to Period window. In the Sweep to
Period field, Payables provides the next open period. You can accept this default or enter another
open period.

4. Choose the Submit button to submit the Unaccounted Transactions Sweep

Program. Payables automatically produces the Unaccounted Transactions Sweep report.

8. Close the Current Oracle Payables Period

Close the accounting period by using the Control Payable s Periods window to set the Period
Status to closed. This process automatically submits the Sub ledger Period Close Exceptions
Report. The Sub ledger Period Close Exceptions Report lists all accounting events and journal
entries that fail period close validation. It is automatically submitted by General Ledger when
closing a GL period if there are unprocessed accounting events or untransformed journal entries.
You can also generate the Sub ledger Period Close Exceptions Report through a
concurrent request as follows:
* For the application associated with the responsibility
* For all applications in the General Ledger responsibility

9. Run Mass Additions Transfer to Oracle Assets

After you have completed all Payables transaction entries, and confirmed all invoice holds, and
carry forwards, submit the Mass Additions Create program to transfer capital invoice line
distributions from Oracle Payables to Oracle Assets. For foreign currency assets, Payables sends
the invoice distribution amount in the
converted functional currency. The mass addition line appears in Oracle Assets with the
functional currency amount. After you create mass additions, you can review them in the Prepare
Mass Additions
window in Oracle Assets. It is recommended to do a final Mass Additions Create after the period
close to ensure that all Payables invoices are:
* Included in the correct period and
* Any additional invoicing will become part of the next periods invoice and asset processing
period.

Suggestion: If the volume of transactions in Accounts Payable requiring Assets update is large,
you should consider running the Mass Additions Create process on a more regular basis.

10. Open the Next Oracle Payables Period

Open the next accounting period by using the Control Payables Periods window to set
the Period Status to Open.

11. Run Reports for Tax Reporting Purposes (Optional)

A variety of standard reports can be used to provide tax information, which is required to be
reported to the relevant Tax Authority, including withholding tax. Withholding tax is handled by
Payables whereas other tax requirements are handled by E-Business Tax. The E-Business Tax
data extract draws tax information from each application and stores the data in an interface table.
Output from the tax extract is designed to look as
close to a simple tax report as possible. Suggested Reports include: Financial Tax Register Use
the Financial Tax Register to view the output from the Tax Reporting Ledger. The Tax Reporting
Ledger consists of accounting information created in Oracle Payables, and Oracle General
Ledger. The short name of this report is RXZXPFTR.
These tax registers are available:
Tax Register (default)
Interim Tax Register
Non recoverable Tax Register
These summary levels are available within each Tax Register:
Transaction Distribution Level
Transaction Level (default)
Transaction Line Level
Tax Audit Trail Report
Use the Tax Audit Trail report to review tax information for posted or partially posted invoices.
This report provides detail tax and invoice information and the total amounts for each tax rate
code in the invoice currency and functional currency. The report lists, for each tax rate code,
distributions of all posted or partially posted
The report includes, for each invoice, both the tax amount and the invoice amount subject to tax.
The short name of this report is ZXXTATAT.

12. Run the Key Indicators Report (Optional)

This report enables review of the accounts payables departments productivity. This statistical
information can be useful for cash flow analysis and forecasting purposes, when combined with
similar information from Oracle Accounts Receivable. When you submit the Key Indicators
Report, Oracle Payables generates reports you can use to review payables transaction activity,
and review the current number of suppliers, invoices, payments and matching holds in the
system.

The Key Indicators Report generates the following reports:

a) Key Indicators Current Activity Report

Use the Key Indicators Report to review your accounts payable department's productivity. The
Key Indicators Report provides current activity indicators that compare current period activity
with prior period activity in three major areas: suppliers, invoices, and payments. Payables
further breaks down each category into basic items, exception items, and updates. The report
provides the number of transactions for each indicator (such as number of automatic payments
created during a period) and amount values where applicable to the Key Indicator (such as total
value of automatic payments created during a period).

b) Key Indicators Invoice Activity Report

Report that compares the invoice activity for each of your accounts payable processors during
the period you specify and the previous period. Oracle Payables produces this report only if you
choose Yes for the Include Invoice Detail parameter.

c) Key Indicators State of the System Report

The Key Indicators State-of-the-System Report provides a period-end view of Oracle Payables,
as well as average values. For example, it includes:
Suppliers:

* Number of suppliers.
* Number of supplier sites.
*Average sites per supplier (number of sites divided by the number of suppliers)
Invoices:
* Number of invoices.
* Number of invoice distributions.
* Average lines per invoice (number of invoices divided by the number of distributions.)
* Scheduled payments (number of scheduled payments based on payment terms and manual
adjustments in the Scheduled Payments tab).
* Average payments per invoice (number of invoices divided by the number of scheduled
payments).

Payments:
* Number of payments (both manual and computer generated) created and recorded in Payables.
* Invoice payments (number of invoice payments made by Payables - a payment document can
pay multiple invoices).
* Average invoices per payment (number of payment documents divided by the number of
invoice payments).

Matching holds:
* Matching holds (number of matching holds in Payables).
* Average matching holds per invoice on matching hold (number of matching holds divided by
the number of invoices on matching hold).