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Reconciliation Agenda
Background General Reconciliation Principles Receiving Valuation Accounts Inventory Valuation Accounts Work In Process Valuation Accounts Common Reconciliation Challenges
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Summary Background
Inventory to G/L reconciliation can be difficult This presentation includes standard Oracle techniques Plus additional ideas and solutions Doug has helped Oracle clients with these challenges since 1990
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Korea LE
Asia-Pac LEs
Swiss LE
CORP LE
Other LEs
Operating Unit
Korea OU
Asia-Pac OUs
Switzerland OU
US OU
Inventory Orgs
ORG Korea Item Master (ZZZ)
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If you do not balance, check for manual G/L journal entries and entries from other subledgers
For Release 12, also check for pending or invalid Subledger entries
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Use the Receiving Account Distribution Report for monthly increases to the Receiving Valuation Account
Use the Material Distribution Summary Report for monthly decreases to the Receiving Valuation Account
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You can only find the XML Reports on the Requests menu!!!
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Excel XML output FO not useful HTML tags and body PDF great to send to auditors RTF readable by MS Word
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Also use the Period Close Value Summary Report For monthly totals use the Material Distribution Summary Report For Release 12 use the Journal Entries Cost Management Report
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For Release 12 the Inventory Value Report also shows intransit balances
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Release 12: You cannot see the organization code on the G/L journal entry batch name unless you customize your SLA rules
Release 12: You can drill down from your G/L to the Subledger Accounting Entries to the material, receiving and WIP transactions Release 12: You can run the Subledger Journal Entries, Account Balances or Account Analysis Reports (with setup required)
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Insert GL_BATCH_DATE, ORGANIZATION_CODE, ORG_GL_BATCHES.DESCRIPTION, JE_BATCH DESCRIPTION DO NOT POPULATE DO NOT POPULATE Note: Use unknown JE_HEADER NAME
Account Analysis Report, Account Inquiry Journal Import will append JE_CATEGORY_NAME, CURRENCY_CODE JE_HEADER DESCRIPTION JE_HEADER external_reference Used for JE_HEADER ACCRUAL_REV_FLAG Account Inquiry
REFERENCE8
REFERENCE9 REFERENCE10 REFERENCE21 REFERENCE22 REFERENCE23
DO NOT POPULATE
DO NOT POPULATE Same as REFERENCE2 Insert GL_Batch_ID Insert ORGANIZATION_CODE Insert TRANSACTION_ID
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Corrective action: Run the reports at midnight on the last day of the month. Also run the Material and Receiving Account Distribution reports to capture daily transactions that need to be subtracted away. You can also set the Cost Cut-Off Date to allow transaction processing for the new day, but allow your Inventory / Subinventory Value Report to not include uncosted transactions. But this method does not help with the Receiving Value or the Intransit Value Reports.
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10
10
Account
Inv valuation
Use the Material Distribution Inquiry to find these, query for entries that hit your subinventory valuation accounts (Std) or organization valuation accounts (Avg), where the Accounting Line Type is Account
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Corrective action:
Reverse the miscellaneous transaction (assuming the standard or average costs have not changed) and replay the transaction with a correct offset account. Or enter a manual journal entry to balance your G/L to inventory perpetual
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Corrective actions:
Reopen the work order and make corrections Can only do if the inventory period is not closed If you cannot reopen the work order: delete the transaction from the Open Receiving Interface and manually accrue the WIP job charge into the G/L Log an Oracle Service Request to delete / correct your invalid receiving balance
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Corrective actions: Typically back-end SQL*PLUS fixes for Organization, Subinventory, WIP or Cost Group account changes Most other changes can be done via the forms or setup screens Note: Oracle Support advice may be too conservative (new orgs, new subinventories, issue all goods out, close all work orders, etc.)
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Corrective actions: Release 12: will self-correct (assuming your perpetual is correct) Release 11i: backend SQLPLUS fixes
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New workflow to notify of failing transactions Period Close Pending Transactions Report
Report the transactions holding up the inventory accounting period But only by inventory organization, by transaction error
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You can also use this information to get your month-end perpetual quantities and values for intransit and subinventories
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Release 12 matl and WIP distribution inquiries & reports do not reflect the SLA results SLA Journal Reports do not show operational information Release 12 records the material accounting and WIP accounting entries by cost element rendering these inquiries and reports more difficult to use, especially for Standard Costing.
Release 12 forces Standard Costing to record WIP & Material entries by Cost Element / you can summarize in SLA but you dont have the same detail reporting in SLA
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Enter Transaction(s)
Accounting Processor
G/L Tables
GL_LEDGERS
Create Accounting
XLA_AE_HEADERS
GL_ INTERFACE
GL_JE_BATCHES
GL_JE_HEADERS
GL_JE_LINES
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Simplify, make more robust, or eliminate the interfaces needed in Oracle (especially the Receiving Interface)
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Desired Enhancement:
G/L to Inventory Reconciliation Script
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Caveats:
Tested for Standard Costing (should work for Avg, FIFO, LIFO) Assumes using product line or product group segment from your item master COGS account Does not consider Cost Groups (not too hard to change) Assumes using one valuation account per subinventory or org Does not handle Receiving Perpetual (no snapshot) Your Release 12 Subledger Accounting Rules may be different
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Report Output
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Summary
Release 12 solves many of the report cut-off issues Still have multi-org reporting issues with account distribution and valuation reports Release 12 Subledger Accounting can complicate reconciliation Investments in custom reporting can save significant amounts of time at month-end
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Acknowledgements
Solution Beacon for use of their R12 Vision environments Oracle Cost Development Partners in crime at my many clients
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Appendix
New Subledger Reports in R12
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Journal Lines
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Use System Administrator to put this on your custom menu You should put this on a custom Request Group
There are two G/L SLA reports to try. You may prefer the Account Analysis Report as it has the account range parameters already displayed
(XLAAARPT)
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Tailor this report in the Concurrent Program definition to display additional parameters such as account ranges. They are seeded but not displayed
(XLAJELINESRPT)
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There are many available parameters for you to use. Customize the Concurrent Program definition to use these parameters
These same concepts work for the Journal Entries Cost Management Report as well
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Core Expertise
Multi-organization, Multi-currency ERP Implementations Project Management and Senior Project Advisor Cost Accounting Core manufacturing processes Cost Management Inventory Bills of Material WIP Systems Integration and Data Conversions
Experience
Sample of clients served: Beckman Coulter (US) Celgene Corporation (US, Switzerland) Logitech (US, Taiwan, P.R.C.) Matsushita (UK, Mexico) Mercury Marine (US) NTL (UK, now Virgin Media) TCI International (US) Onninen AS (Norway)
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