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Overview
This presentation will discuss implementing actual costing in an OPM environment and the challenges involved with reconciling the inventory account to the change in inventory valuation. Attendees will be presented with functional and technical information regarding month end closing procedures and tips and tricks to overcome reconciliation hurdles. Reconciling the net change in inventory valuation to the value in the inventory account at month end is challenging in an OPM actual costing implementation. There are several steps that have to be performed in order for the information to roll up correctly in the calculation of costs. Furthermore, there are several steps to perform in order to accumulate subledger amounts for period end. If any steps are eliminated or performed out of sequence, the subledger values are incorrect. Additionally, depending on the modules that are implemented, conditions may exist in dependent modules (PO, OM, OPM Manufacturing) that prevent costs from being calculated correctly but that allow inventory levels to be adjusted thereby creating a reconciling mess.
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Assumptions
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Using Period Moving Average Cost (PMAC) Implemented Purchasing for Process Inventory instead of OPM Purchase Management Implemented Oracle Order Management instead of OPM Order Fulfillment
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Complete and close all inventory batches Complete physical inventory, cycle counts and adjustments Enter all PO receipts, corrections and returns to suppliers Enter AP receipts if synchronizing invoices Ship confirm and update shipping for OM orders Enter resource costs Enter cost burdens Run GL expense allocations Enter actual cost adjustments
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Preliminary close the inventory calendar period Run Actual Cost Process
OPM Inventory > OPM Inventory Control > Inventory Close OPM Financials > Cost Management > Actual Costs > Actual Cost Process
View the actual cost process error messages Run preliminary GL Cost Update
OPM Financials > Cost Management > Actual Costs > Actual Cost Process > Actions menu > View Error Messages OPM Financials > Mfg. Acctg Controller > GL Cost Update
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View the GL Cost Update error messages Run Subsidiary Ledger Update
OPM Financials > Mfg. Acctg Controller > GL Cost Update > Actions menu > View Error Messages OPM Financials > Mfg. Acctg Controller > Subledger Update > Actions menu > Test Subsidiary Ledger Update OPM Financials > Mfg. Acctg Controller > Subledger Update > Actions menu > View Error Messages
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Run Inventory Valuations reports for current period and prior period Run Account Distribution (Account Summary) report for the Test Subledger
OPM Financials > Mfg. Acctg Controller > Reports > Detailed Subledger > Actions Menu > Account Distribution > Report on Test Subledger > Report Type Account Summary OPM Inventory > OPM Inventory Control > Reports > Run > Inventory Valuation Report
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Run Actual Cost Process if transaction adjustments were entered View the actual cost process error messages Run final GL Cost Update
OPM Financials > Cost Management > Actual Costs > Actual Cost Process
OPM Financials > Cost Management > Actual Costs > Actual Cost Process > Actions menu > View Error Messages OPM Financials > Mfg. Acctg Controller > GL Cost Update
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View the GL Cost Update error messages Run Subsidiary Ledger Update
OPM Financials > Mfg. Acctg Controller > GL Cost Update > Actions menu > View Error Messages OPM Financials > Mfg. Acctg Controller > Subledger Update > Actions menu > Subsidiary Ledger Update OPM Financials > Mfg. Acctg Controller > Subledger Update > Actions menu > View Error Messages
2003 Solution Beacon, LLC. All Rights Reserved.
Run GL Update OPM Financials > Financial Integration > GL Update n Run Journal Import General Ledger > Journals > Import > Run
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(614,919.14)
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Transaction Data
(4,763,056.87)
Subledger Data
(4,764,526.22)
Delta
1,469.35
Description
Possibly sales orders that are not ship confirmed or that have not had Update Shipping run Open production batches or production batches that are completed and closed in separate periods or formulas with a cost allocation not equal 1
(4,790.05) 5,997.31
Transfers that have been shipped from the source warehouse and not received at the target warehouse In this case, it is because inventory has been transferred from a costed warehouse to an uncosted wareouse
(350,753.16) 70,003.11 -
(348,166.84) 70,003.11 -
2,586.32) -
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IMVT
INTA
Inventory
INV
IC Total:
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Production Batches
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This update statement is needed set the batch completion date equal to the batch close date when they occur in different periods MONYY. The costing process creates separate entries for in the subledger when a batch is closed and when it is completed. If the dates for close and completion are in separate periods, then it causes problems with reconciling costing. -- set the batch_close_date = actual_cmplt_date for batches with -- dates that cross over periods. this situation causes inventory -- values to remain in WIP between periods and complicates reconciliation. -- When the actual_cmplt_date = 01/01/1970, then it is excluded -- since those need special attention. UPDATE pm_btch_hdr SET batch_close_date = actual_cmplt_date WHERE batch_status = 4 AND TO_CHAR(actual_cmplt_date,'MONYY') <> TO_CHAR(batch_close_date,'MONYY') AND actual_cmplt_date <> TO_DATE('01-JAN-1970','DD-MON-YYYY');
All batches must be completed and closed within the same period
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2003 Solution Beacon, LLC. All Rights Reserved.
Production Batches
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All batches must be completed and closed within the same period
This query is a final check to ensure that there are no batches that cross period boundaries. If a batch is started in 1 period and finished in another period, reconciling costing is more difficult. If this query returns any records, they will have to be evaluated on a case by case basis to determine the resolution. Usually, it will be to set the completion date and close date to the same period as the start date. -- this query will verify that there are no batches that cross period boundaries SELECT batch_no, actual_start_date, actual_cmplt_date ,batch_status FROM pm_btch_hdr WHERE TO_CHAR(actual_start_date,'MONYY') <> TO_CHAR(actual_cmplt_date,'MONYY') AND batch_status = 4;
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Order Management
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Orders must be ship confirmed with update shipping completed (oe_interfaced flag = Y)
SELECT wdd.source_header_number order_number, wdd.source_line_number line_number, TO_CHAR(ITP.TRANS_DATE,'YYMM') period, itp.trans_um, itp.trans_um, SUM(itp.trans_qty * gic.acctg_cost) cost gic.acctg_cost) FROM ic_tran_pnd itp, cm_whse_asc cwa, gl_item_cst gic, itp, cwa, gic, wsh_delivery_details wdd WHERE wdd.source_line_id = itp.line_id AND wdd.delivery_detail_id = itp.line_detail_id AND wdd.oe_interfaced_flag = 'N' AND itp.doc_type = 'OMSO' AND itp.location <> 'NONE' AND itp.trans_qty <> 0 AND itp.trans_date BETWEEN TO_DATE('01-AUG-02 00:00:00','DD-MON-YY HH24:MI:SS') TO_DATE('01- AUG- 00:00:00','DD- MONAND TO_DATE('31-AUG-02 23:59:59','DD-MON-YY HH24:MI:SS') TO_DATE('31- AUG- 23:59:59','DD- MONAND itp.completed_ind = 1 AND gic.calendar_code = 'PMAC' AND gic.cost_mthd_code = 'PMAC' AND itp.item_Id = gic.item_id AND gic.period_code = '0208' AND itp.orgn_code = gic.orgn_code AND gic.whse_code = cwa.cost_whse_code AND cwa.whse_code = itp.whse_code GROUP BY wdd.source_header_number, wdd.source_header_number, wdd.source_line_number, wdd.source_line_number, TO_CHAR(ITP.TRANS_DATE,'YYMM'), itp.trans_um
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Table
ic_perd_bal
Description
Onhand balances are summarized by period, warehouse and item. Used for inventory valuation.
cm_cmpt_dtl Transactions are costed and the components and costs are stored in this table gl_item_cst gl_subr_tst Cost components are rolled up to reflect total item cost Accounting transactions are allocated by period, warehouse, sub-event and account title
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Questions?
KMcCormick@SolutionBeacon.com
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