ORACLE FINANCIALS E-BUSINESS SUITE, RELEASE 12

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1 ORACLE FINANCIALS E-BUSINESS SUITE, RELEASE 12 PERIOD-END PROCEDURES An Oracle White Paper June, 2009 Oracle Financials E-Business Suite, Release 12 Period End Procedures i

2 Introduction Background This document has been put together by members of Oracle's internal EMEA Financials Professional Community, acknowledging that every Financials customer needs to successfully close the accounting books each period. Before the first external publication, various people from EMEA Applications Consulting and Financials Product Development have reviewed and enriched the content. Read the paragraph Status and Feedback below, if you have any comments or feedback. Objectives This document provides guidance on period end procedures in Release 12 for Oracle Payables, Oracle Purchasing, Oracle Inventory, Oracle Order Management, Oracle Receivables, Oracle Assets, Oracle Projects, Oracle Cash Management, Oracle Treasury and Oracle General Ledger. It is intended to be generic, and does not relate to a specific organization. Both mandatory and optional steps are included herein. Procedures particular to year-end processing are also described. This document intends to provide a reference for planning period-end procedures for real-life implementations. It describes the fundamental period-end steps involved for each, with particular emphasis on balancing the subledger applications to Oracle General Ledger, and attempts to provide an overview of the relative timing of these procedures for all installed Oracle applications. It is therefore the intention of this document to provide content from which relevant sections can be extracted, according to the applications installed for a particular organization. Any organization may choose to customize their period-end and year-end processes, for example opting to run additional reports, particular to the organization. Although this document particularly refers to Period-End Procedures, many of the processes can be performed more regularly throughout the accounting period, as required. Each subledger application provides control as to when and how often data is transferred from the subledger application to the General Ledger. Assumptions These Period-End Procedures were written with the assumption that Oracle Financials was implemented for a single operating unit. Where an organization has implemented the Multi-Org features of Oracle Financials, these procedures would need to be performed for each operating unit individually unless Multi-Org Access Control is enabled. Note: R12 requires multi-org functionality to be used. For further details refer to Oracle Applications Upgrade Guide: Release 11i to Release 12 Oracle Workflow is incorporated in the Release 12 applications. It is assumed that these Workflow Processes will be monitored and attended to by a System Administrator on a regular basis. Some Workflow Processes like the Requisition Approval Workflow or the Purchase Order Approval Workflow will require a direct response from a message recipient rather than a System Administrator. Oracle Financials E-Business Suite Release 12 Period End Procedures

3 Organization This white paper contains twelve chapters and one appendix where you can find interesting links to more information. The first chapter describes the dependencies between the modules and the biggest change between Release 11i and Release 12, which is the introduction of Subledger Accounting (SLA). Then, the next ten chapters outline period-end procedures appropriate to the Oracle Applications covered in this document. The last chapter displays a summary of the main period-end procedures for each application and the relative timing of each. Attention: If you are using more than one application, the last chapter is a good reference to see that the order of the steps for each application are undertaken in the right sequence, relative to the other applications you are using. Status and Feedback This white paper is intended to be a living document. As we gather new or changed information, we will revise and re-publish this paper. Therefore, we welcome all feedback from you. On the bottom of the My Oracle Support note where you have downloaded this document is a link where you can us your comments. Oracle Financials E-Business Suite Release 12 Period End Procedures

4 Table of Contents INTRODUCTION... II CHAPTER 1 SLA AND PERIOD END CLOSE DEPENDENCIES... 8 Sub Ledger Accounting (SLA) Business Process... 8 Sub Ledger Accounting (SLA) Process Change... 8 Subledger Accounting (SLA) Reconciliation... 9 Subledger Accounting (SLA) Close Process General Steps General Period End Close Dependencies CHAPTER 2 ORACLE ORDER MANAGEMENT Business Requirements Procedures Complete All Transactions for the Period Being Closed Ensure all Interfaces are Completed for the Period (Optional) Review Open Orders and Check the Workflow Status Review Held Orders Review Customer Acceptances (Optional) Review Discounts Review Backorders Review and Correct Order Exceptions Reconcile to Oracle Inventory Create Service Contracts (Optional) Reconcile to Oracle Receivables (Optional) Run Standard Period End Reports CHAPTER 3 ORACLE CASH MANAGEMENT Business Requirements Procedures Complete Daily Cash Management Activities Load Bank Statements Generate Sweep Transactions Create Bank Statement Cashflows Reconcile Bank Statements Create Miscellaneous Transactions a.Complete Bank Transfers Review Auto-Reconciliation Execution Report Resolve Exceptions on the Auto-Reconciliation Execution Report Run Bank Statement Detail Report Run Transactions Available for Reconciliation Report Resolve Un-reconciled Statement Lines Post to General Ledger Run the GL Reconciliation Report Run the Account Analysis Report for the General Ledger Cash Account Review the Account Analysis Report Correct any Invalid Entries to the General Ledger Cash Account (Optional) CHAPTER 4 ORACLE PAYABLES Business Requirements Procedures Complete All Transactions for the Period Being Closed Run the Payables Approval Process for All Invoices Review and Resolve Amounts to Post to the General Ledger Reconcile Payments to Bank Statement Activity for the Period Transfer All Approved Invoices and Payments to the General Ledger Review the Payables to General Ledger Posting process After Completion Submit the Unaccounted Transactions Sweep Program Close the Current Oracle Payables Period Oracle Financials E-Business Suite Release 12 Period End Procedures

5 9. Accrue Uninvoiced Receipts Reconcile Oracle Payables Activity for the Period Run Mass Additions Transfer to Oracle Assets Open the Next Oracle Payables Period Run Reports for Tax Reporting Purposes (Optional) Run the Key Indicators Report (Optional) CHAPTER 5 ORACLE PROJECTS Business Requirements Project Periods and General Ledger Periods Period Statuses General Exception Handling at Period End Procedures Change the Current Oracle Projects Period Status from Open to Pending Close Open the Next Oracle Projects Period Complete all Maintenance Activities Run Maintenance Processes Complete All Transactions for the Period Being Closed Run the Cost Distribution Processes a. Run the Generate Cost Accounting Events Program Interface Cost Transactions to Other Applications Generate Draft Revenue for All Projects Review and Release Revenue for All Projects Run Generation Revenue Accounting Events Process Run Create Accounting to Process Revenue Accounting Events Generate Invoices Transfer Invoices to Oracle Receivables Run Period Close Exceptions and Tieback Reports Run Final Project Costing and Revenue Management Reports Change the Current Oracle Projects Period Status from Pending Close to Closed Advance the PA Reporting Period (Optional) Update Project Summary Amounts Restore Access to User Maintenance Activities Reconcile Cost Distribution Lines with General Ledger (Optional) Permanently Close the Oracle Projects Period (Optional) CHAPTER 6 ORACLE RECEIVABLES Business Requirements Procedures Complete All Transactions for the Period Being Closed Reconcile Transaction Activity for the Period Reconcile Outstanding Customer Balances Review the Unapplied Receipts Register Reconcile Receipts Reconcile Receipts to Bank Statement Activity for the Period Post to the General Ledger Reconcile the General Ledger Transfer Process Reconcile the Journal Import Process Print Invoices Close the Current Oracle Receivables Period Review the Subledger Period Close Exceptions Report Third Party Balances Report Reconcile Posted Journal Entries Review the Unposted Items Report Review Account Analysis Report Open the Next Oracle Receivables Period Run Reports for Tax Reporting Purposes (Optional) CHAPTER 7 ORACLE PURCHASING Business Requirements Procedures Complete All Transactions for the Period Being Closed Review the Current and Future Commitments (Optional) Review the Outstanding and Overdue Purchase Orders (Optional) Follow Up Receipts - Check With Suppliers Oracle Financials E-Business Suite Release 12 Period End Procedures

6 5. Identify and Review Un-invoiced Receipts (Period-End Accruals) Follow Up on Outstanding Invoices Complete the Oracle Payables Period-End Process Run the Receipt Accruals - Period End Process Reconcile Accrual Accounts - Perpetual Accruals Perform Year End Encumbrance Processing (Optional) Close the Current Oracle Purchasing Period Open the Next Oracle Purchasing Period Run Standard Period End Reports (Optional) CHAPTER 8 ORACLE INVENTORY-COST MANAGEMENT Business Requirements Procedures Complete All Transactions for the Period Being Closed Check Inventory and Work in Process Transaction Interfaces Check and fix pending Transactions Transfer Summary or Detail Transactions Open the Next Inventory Period Close the current Oracle Payables and Oracle Purchasing Periods Close the Current Inventory Period Run Standard Period-End Reports and reconcile the Perpetual Inventory with GL Validate the Work in Process Inventory CHAPTER 9 ORACLE ASSETS Business Requirements Procedures Complete All Transactions for the Period Being Closed Assign All Assets to Distribution Lines Run Calculate Gains and Losses (Optional) Run Depreciation Create Accounting Rollback Depreciation Create Deferred Depreciation Journal Entries (Optional) Depreciation Projections (Optional) Review and Post Journal Entries Reconcile Oracle Assets to the General Ledger Using Reports Run Responsibility Reports (Optional) CHAPTER 10 ORACLE TREASURY Business Requirements Procedures Complete Daily Trading Activities Perform Revaluation Generate Accruals and Amortization Generate Journals Transfer Journals to General Ledger CHAPTER 11 ORACLE GENERAL LEDGER Business Requirements Period End Close Combined Basis Accounting Procedures Ensure the Next Accounting Period Status is set to Future Entry Complete Oracle Sub-ledger Interfaces to Oracle General Ledger Upload Journals from Web Applications Desktop Integrator (Web ADI) to Oracle General Ledger (Optional) Complete Non-Oracle Sub-ledger Interfaces to Oracle General Ledger (Optional: only required if you want to post from non-oracle systems) Generate Reversal Journals (Optional) Generate Recurring Journals (Optional) Generate Mass Allocation Journals (Optional) Review and Verify Journal Details of Unposted Journal Entries Post All Journal Batches a. Run the Period Close Exceptions Report Run GL Trial Balances and Preliminary Financial Statement Generator Reports (FSGs) Revalue Balances (Optional) Translate Balances (Optional) Oracle Financials E-Business Suite Release 12 Period End Procedures

7 13. Consolidate Ledgers (Optional) a. Reconcile Intercompany (optional) Review and Correct Balances (Perform Reconciliations) Enter Adjustments and / or Accruals and Post Perform Final Adjustments Close the Current Oracle General Ledger Period Open the Next Oracle General Ledger Period Run Financial Reports for the Closed Period Run Reports for Tax Reporting Purposes (Optional) Perform Encumbrance Year End Procedures (Optional) CHAPTER 12 PERIOD END PROCESSING - SUMMARY APPENDIX: MORE INFORMATION Related My Oracle Support Information CHANGE LOG Oracle Financials E-Business Suite Release 12 Period End Procedures

8 Chapter 1 SLA and Period End Close dependencies Sub Ledger Accounting (SLA) Business Process The new Subledger Accounting architecture in Release 12 provides a common repository of all your accounting information. Whenever you want to account for your subledger transactions, online or as a background batch process, the accounting is generated by Subledger Accounting. Subledger Accounting helps to maintain a common link between General Ledger (GL) balances and underlying transactions automatically, for internal and external audit purposes, and for ease of drilldown. Subledger Accounting provides a comprehensive view of all subledger accounting data. It behaves like a detailed version of your general ledger and provides a rich store of information for reporting and analysis. It allows your general ledger to be free of extraneous data, so that you can maintain a simple chart of accounts and store only what is needed for GL reporting and analysis. The moment you need to access more detailed information, you can go directly to Subledger Accounting to see the detail from all transaction sources that feed the GL account balance without having to go back to multiple source systems and applications. Just as Oracle General Ledger stores balances and journals, Subledger Accounting stores subledger balances and subledger journals for all of your subledgers that require accounting. Subledger Accounting offers a new model between the subledgers and GL. Sub Ledger Accounting (SLA) Process Change Due to the impact of the Subledger Accounting Architecture the close process has changed between Release 11i and Release 12. Oracle Financials Release 12 Period End Procedures 8

9 In Release 11i the transactions and distributions represented the accounting. In Release 12 however, distributions on transactions in subledgers are considered to be the default accounting and should therefore not be used for reconciliation purposes. The reason is that subledger accounting enables you to change the accounting for transactions so it is different from the default accounting. Therefore, the subledger accounting becomes the single source of truth for accounting reconciliations. In Release 11i, when you close your periods in each of the subledgers, Oracle General Ledger will automatically create the balancing lines for journals posted to General Ledger. This changes in Release 12 as subledger accounting creates the balancing lines at the time you account for the subledger transactions. The subledger accounting journal represents your REAL accounting and the balancing lines are created as part of these subledger accounting journals. When you close a period in Release 12, you re actually closing subledger accounting. The journals can then be posted to the general ledger to update the GL balances. Differences between R11i and R12 Subledger Accounting (SLA) Reconciliation From a reconciliation perspective the picture below shows what has been changed between R11i and R12. In Release 11i, you reconciled transactions and distributions to the general ledger through transactional reports. In the accounting reports in Release 11i, the balances are displayed but not the transactional information. In Release 12, there is no reason to reconcile distributions on transactions to the general ledger. You can still reconcile transaction reports to accounting reports. The new accounting reports in Release 12 now also contain more comprehensive information - not just on balances but also on suppliers, customers and transactions. The point to note is that when you do account balance reconciliation, you should ignore distributions in Release 12, especially if you have altered your subledger accounting rules. Oracle Financials E-Business Suite Release 12 Period End Procedures 9

10 Reconciliation between R11i and R12 Subledger Accounting (SLA) Close Process General Steps Here are some guidelines, from a general perspective, how you can perform the close process for every subledger: a) Complete transactions b) Create accounting c) Reconcile transactions d) Post to General Ledger e) Reconcile accounting f) Close period Step b), Create Accounting, is a new step in Release 12, as it is an SLA feature. The accounting can be created immediately online, or can be run as a process in the background e.g. as a batch job at a time that matches your business needs. The important thing to note, is that the accounting is not the distribution on the transaction. The final accounting by SLA could result in different accounting entries being generated based on the accounting rules you have configured. Therefore, you need to ensure that all your accounting for your transactions is created before you post to General Ledger, in order to update the balances correctly. Oracle Financials E-Business Suite Release 12 Period End Procedures 10

11 General Period End Close Dependencies Before you start with the Period-End process you have to know what the dependencies are between the various modules as described in this document. The diagram above shows the dependencies between some of the main Financials products and a couple of supply chain products. For example, you have to close Oracle Payables before you close Oracle Purchasing to account for purchasing accruals at period end. You also need to close Oracle Payables before you close Oracle Inventory and Oracle Assets. You actually have to close Oracle Cash Management before you close Oracle Receivables, as bank reconciliation in Cash Management will create miscellaneous receipts in Oracle Receivables and so forth. Finally, you close all of your subledgers before you close General Ledger. Oracle Financials E-Business Suite Release 12 Period End Procedures 11

12 Chapter 2 Oracle Order Management This chapter describes the procedures for performing period-end processing in Oracle Order Management Release 12. Business Requirements Open Sales Orders should be reviewed and, where possible, appropriate actions should be undertaken to finalize the Order Workflows and close these Sales Orders. Procedures The following steps are taken in performing period-end processing for Oracle Order Management. 1. Complete All Transactions for the Period Being Closed Ensure that all transactions have been entered for the period being closed Enter and book all orders Schedule orders Enter and book return material authorizations Run the Generate Pre-billing Acceptance Program for Pre-billing, Implicit Acceptance Confirm shipments and optionally, the creation of install base entries for shipments Confirm OM-shipping transaction for the period Sales order acknowledgments Cancel backordered included items Respond to workflow approval notifications Confirm that invoice interface (OM-> AR interface) has been completed Optionally, confirm that service contracts for warranties and extended warranties have been created Close orders * Closing orders that are complete enhances performance, since many programs, windows and report queries retrieve open orders only. Orders marked as closed are not selected, increasing system speed and efficiency. Closed orders are excluded from many of the standard reports available in Order Management, so reporting can be limited only to the active orders. * Close lines and close orders are implemented using workflow. Order Management provides seeded close line and close order workflow sub-processes to close the order header and line, respectively. These processes, when included in the order header or Oracle Financials E-Business Suite Release 12 Period End Procedures 12

13 line workflow, close the status of the eligible order or lines. Once an order is closed, no lines can be added or changed. * The order header close order process checks at the end of every month to see if all the lines associated with it are closed. It closes the order header if it finds that all the lines are closed. Attention: Be sure to include the standard sub-processes of close line and close order at the end of all your line and order flows to ensure that your orders and returns close once all prerequisites have been met. Close Order Lines * An order line is eligible to close when it completes all of the line-level activities within the workflow process. Order lines can close independent of each other. Once an order line is closed, no changes can be made to any fields except the descriptive flexfield, for which you can define processing constraints. Holds Effect on Eligible Lines * The close order and close line workflow activities will close order or lines if only generic holds are present.if orders or lines have activity specific holds present, they will not be closed by workflow activity. Attention: If MOAC is enabled for the Order Management responsibility, perform the above tasks for each operating unit. 2. Ensure all Interfaces are Completed for the Period (Optional) Ensure that all interfaces for the current period have been processed: Order Import from External Order Systems. * If you are using external order processing systems for data entry of orders, use the Order Import to update Oracle Order Management from your external systems. Alternatively, if you are using the Order Management public API to create orders, ensure that the processes calling the public API have completed. * Use the Order Import Correction window to examine the orders and optionally correct data if it fails the import process. Use the Error Message window to determine if your data failed to import. Order Import from Oracle Purchasing for Internal Orders. If you are using Oracle Purchasing to process Internal Purchase Requisitions, the following processes need to be completed: a) Enter and approve all internal purchase requisitions in Oracle Purchasing. b) Run the Create Internal Sales Orders Process in Oracle Purchasing for all requisitions within the current period. Oracle Financials E-Business Suite Release 12 Period End Procedures 13

14 Use the Create Internal Sales Orders process to send requisition information from approved, inventory-sourced requisition lines to the Order Management interface tables. Then, the Order Import process is run from within Order Management to generate the internal sales orders. The Create Internal Sales Orders and Order Import processes can be scheduled to run automatically at specified intervals. c) Run Order Import to create internal sales orders from internal requisitions. d) Run the Internal Order and Purchasing Requisition Discrepancy Report which displays the differences between the purchasing requisition entered and the actual items ordered during order entry. This report includes all open and closed orders, order numbers, order date ranges, order types, requisition numbers, items, ship to information, scheduled dates, and internal requisition and internal sales order hold discrepancies. e) Use the Order Import Correction window to examine the orders and optionally correct data if it fails the import process. Use the Error Message window to determine if your data failed to import. f) Invoice Interface / AutoInvoice, for external orders. Internal orders do not go through the Invoice interface/ AutoInvoice process. This process will ensure all shipped sales order information is transferred to Oracle Receivables when it reaches the appropriate point in the order workflow. The AutoInvoice Process updates Oracle Receivables for invoice and revenue information, as well as credit memos and credits on account created from returns. Attention: This process is only applicable for Order Workflow Definitions that include the Invoice Interface or Invoice Line processes. Attention: Order Management does not process internal sales order lines for the Invoice Interface, even if the Invoice Interface is an action in the order Workflow Definitions for the Internal Sales Order transaction type. 3. Review Open Orders and Check the Workflow Status Use the Sales Orders Workbench to review open orders using the Advanced Tabbed Region to specify controls such as whether to find closed orders/lines and cancelled orders/lines. The Sales Orders window displays the order header status in the main tab of the Order Information tabbed region. The order line status is displayed in the main tab of the Line Items tabbed region. The Workflow Status option on the Sales Orders window Tools menu launches the Workflow Status page. The window shows in tabular format all the activities an order header or line has completed and the corresponding results. From the status page, you can access the Workflow monitor to see the order or line status in a more graphical format. This is available through the View Diagram button. 4. Review Held Orders Run the following reports to assist with reviewing sales orders on hold: Oracle Financials E-Business Suite Release 12 Period End Procedures 14

15 a) Orders on Credit Check Hold Report The Orders on Credit Check Hold Report identifies all of the credit holds currently outstanding for a customer within a date range, or identifies why a particular order is on hold. Order Management allows you to perform a credit check on customer orders and automatically places orders on hold that violate your credit checking rules. This report is automatically sorted by customer, currency code, credit check rule, and order number. All balances are calculated as they are using the online credit check rule, including the factor for shipments and receivables for a certain number of days. b) Hold Source Activity Report The Hold Source Activity Report reviews holds placed and removed under a hold source during the time period you specify. This report indicates the date and the type of activity for each hold transaction. c) Outstanding Holds Report The Outstanding Holds Report reviews order holds for the customer or customers you choose. This report displays the order number, order date, ordered items, and order amount for each order line on hold for each customer you select. It is automatically sorted by customer, order number, order line, and then order line detail. 5. Review Customer Acceptances (Optional) In Pre-Billing Customer Acceptance, once the goods are accepted, invoicing is carried out. In Post-Billing Acceptance, the revenue recognition process is deferred and linked to customers accepting the shipped goods. 6. Review Discounts It is recommended that you review discounts processed as part of the order process to ensure appropriate discount policies have been followed, and exceptions are clearly identified and reviewed and/or followed up. Use the following reports: a) Order Discount Detail Report The Order Discount Detail Report reviews discounts applied to orders by order line detail. This report provides detailed line pricing information, including price list price, selling price, and discount information. b) Order Discount Summary Report The Order Discount Summary Report reviews discounts applied to orders. This report provides order level pricing information, including agreement, salesperson and total order discount. 7. Review Backorders Review backlogs and backorders to ensure that these items are current. If necessary, process cancellations for items/lines which are no longer required. a) Backorder Detail Report The Backorder Detail Report reviews all customer orders that have been backordered. This report provides details for each order including customer name, order number, Oracle Financials E-Business Suite Release 12 Period End Procedures 15

16 order type of each order, all backordered items and their appropriate line numbers, total quantity both ordered and backordered, and monetary amounts of both ordered and backordered quantities. b) Backorder Summary Report The Backorder Summary Report lists all unshipped orders. This report includes only open orders in an order cycle that includes pick release. It displays order information such as order number, customer name and number, order type, purchase order, order date, last shipped date, and the monetary amounts ordered, shipped and outstanding. This report also includes total amounts for customers and currencies. These amounts involve totals for shippable items only. 8. Review and Correct Order Exceptions The following reports should be reviewed, and exceptions corrected before completing the Order Management/Receivables period end: a) Unbooked Orders Report Use this report to review orders entered but not booked. They may indicate incomplete processing, which needs to be corrected, completed, or deleted as appropriate. b) Retry Activities in Error There are cases when retrying a workflow activity in error will not resolve the problem. When Exception Management encounters this situation, the workflow activity is set to notified instead of being retried. c) Sales Order Workflow Status Report The Sales Order Workflow Status Report enables Order Management users to locate orders that are not progressing through associated workflows as expected. 9. Reconcile to Oracle Inventory Run the following reports for reconciliation with Oracle Inventory: a) Backorder Detail Report b) Review Backorders (Already discussed under section 7.) c) Returns by Reason Report The Returns by Reason Report reviews all return material authorizations for various return reasons. Order Management automatically sorts this report by currency, return reason, and then item. 10. Create Service Contracts (Optional) Run the Service Contracts Order Processing Concurrent request to create service contracts for extended warranties. 11. Reconcile to Oracle Receivables (Optional) Run the following reports to assist in reconciliation of orders invoiced in the period: Oracle Financials E-Business Suite Release 12 Period End Procedures 16

17 a) Commercial Invoice (for all ship dates within the current AR period) The Commercial Invoice Report lists all confirmed shipped items in a delivery. If only a delivery name is specified when defining the parameters of this report, Shipping Execution prints one commercial invoice per delivery within the trip. b) Order/Invoice Detail Report The Order/Invoice Detail Report reviews detailed invoice information for orders that have invoiced. A variety of parameters can be used to print the invoice information for a specific order or group of orders. If there are no invoices for a particular order that meets the parameter criteria, Order Management prints in the report that no invoices exist for that order. 12. Run Standard Period End Reports The following reports should be run each period: a) Cancelled Orders Report The Cancelled Orders Report reviews all orders that have been cancelled. This report provides a summary of each cancelled order, including order number, customer name, line number and item, the date and reason the order or order line was cancelled, the quantity ordered and the quantity cancelled, and who cancelled the order. This report can be used to report total amounts cancelled in a specified time-frame, and allows evaluation of the most common cancellation reasons, review cancellations by salesperson, or review cancellations by customers. b) Salesperson Order Summary Report The Salesperson Order Summary Report reviews orders for one or more salespeople. This report displays the order and each order line associated with each salesperson. Salespeople can use this report to see their current outstanding orders and their status. This report shows open orders, quantity ordered, shipped, cancelled, and invoiced and their potential commission. The report displays all open and closed orders for a salesperson, customer or customer number, agreements, order numbers, order date ranges, order types, line type, and detailed sales credit information for lines in a selected range. c) Customer Acceptance Report Generate Pre-billing Acceptance Program for Pre-billing, Implicit Acceptance. Oracle Financials E-Business Suite Release 12 Period End Procedures 17

18 Chapter 3 Oracle Cash Management This chapter describes the procedures for performing period-end processing in Oracle Cash Management Release 12. Business Requirements Oracle Cash Management is an enterprise cash management solution that helps you effectively manage and control the cash cycle. It provides comprehensive bank reconciliation, bank, bank branches & internal bank accounts setup, intra-bank account transfers, cash pooling and flexible cash forecasting. The Bank Reconciliation process enables the verification of entries on the Bank Statement by reconciling that information with system transactions in Oracle Payables, Oracle Receivables and Oracle General Ledger. During the Bank Reconciliation process miscellaneous transactions can be created for bank-originated entries, such as bank charges and interest. Cash forecasting is a planning tool that helps anticipate the flow of cash in and out of the enterprise, allowing the projection of cash needs and evaluation of the company's liquidity position. Procedures The following steps are taken in performing period-end processing for Oracle Cash Management. 1. Complete Daily Cash Management Activities Complete bank account transfers for the day, validate them, if necessary, and send payment instructions to the bank. 2. Load Bank Statements Detailed information from each bank statement, including bank account information, deposits received by the bank, and checks cleared needs to be entered into Cash Management. Bank statements can be either manually entered or loaded electronically from information received directly from your bank. For organizations with high transaction volumes bank statements should be loaded and reconciled on a daily basis. Refer to Entering Bank Statements Manually and Loading Bank Statement Open Interface in the Oracle Cash Management User Guide. 3. Generate Sweep Transactions If you have target balance or zero balance accounts (ZBA) with your banks, you can automatically generate system transactions to match banking information once the bank posts the sweeps. Once the bank statements are imported, run the Sweep Transaction Generation concurrent program. The program will scan the bank statement for sweep lines and, based on the cash pool setup in the system, create sweep Oracle Financials E-Business Suite Release 12 Period End Procedures 18

19 transactions between your internal bank accounts, which can be accounted for and subsequently reconciled. 4. Create Bank Statement Cashflows If you have recurring items such as bank fees and interest appear on your bank statement, you can use the Bank Statement Cashflow Creation program to create system transactions (cash flows) to match banking information. Once the bank statements are imported, run the Bank Statement Creation concurrent program. This program will scan the bank statement for specific codes, as defined in the Bank Statement Cashflow Mapping, and create cashflows, which can be accounted for and subsequently reconciled. 5. Reconcile Bank Statements 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. Refer to Reconciling Bank Statements Automatically in the Oracle Cash Management User Guide. 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. Refer to Reconciling Bank Statements Manually in the Oracle Cash Management User Guide. 6. Create Miscellaneous Transactions During the reconciliation process, miscellaneous transactions for bank-originated entries, such as bank charges and errors can be created. Oracle Payables payments or Oracle Receivables receipts can also be manually created. Note: The automatic reconciliation process can be set up to create miscellaneous transactions automatically. Attention: If you create transactions during the reconciliation process, you will need to re-run the Create Accounting routine from Oracle Receivables to ensure all information is transferred to the General Ledger. Oracle Financials E-Business Suite Release 12 Period End Procedures 19

20 6a.Complete Bank Transfers Complete the bank account transfer whether it is manual or automatic and record the validation if required before completing the transfer. 7. Review Auto-Reconciliation Execution Report Once the reconciliation process has been completed, reviewing the reconciliation results is recommended. This report shows import and reconciliation errors that occurred when running the Auto-Reconciliation program. Cash Management automatically produces this report during the automatic reconciliation process. You may also request it as needed from the Submit Request window. This report includes either statement import errors, which prevented the automatic loading of your bank statement, or your reconciliation exceptions found during the automatic reconciliation process. This report lists the details of any miscellaneous transactions that were created in Receivables during the automatic reconciliation process. 8. Resolve Exceptions on the Auto-Reconciliation Execution Report Resolve the exceptions on the Auto-Reconciliation Execution report by either rerunning the import process or by manually reconciling the exceptions. 9. Run Bank Statement Detail Report This report shows statement and transaction information for a specific bank account statement, including bank statement header information, statement line detail, and reconciled transaction detail. This report lists any un-reconciled transactions separately with their current status, and the statement totals for each type of transaction, including the amount entered, reconciled, un-reconciled, over-reconciled and under-reconciled, and gives you the option to select only un-reconciled statement lines. 10. Run Transactions Available for Reconciliation Report This report shows all transactions available for reconciliation for a specific bank account. It lists detailed transaction information for your Available Receipts, Available Payment, and Available Journal Entries for reconciliation. Detailed information includes the Customer, Supplier or Batch Name, Transaction Date, Payment Method, Transaction Number, Currency, and Amount. This report only lists void payments if the Show Void Payments option on the Systems Parameters window is checked. It does not list reversed receipts due to user error nor does it list the associated original receipts that were not reconciled. This report groups transactions by status so that void or reversed transactions are separate from other transactions. 11. Resolve Un-reconciled Statement Lines Resolve the un-reconciled statement lines by manually reconciling the statement lines to the available transactions. Oracle Financials E-Business Suite Release 12 Period End Procedures 20

21 12. Post to General Ledger Create journal entries for eligible accounting events generated by Bank Account Transfers and Bank Statement Cash Flows by submitting "Create Accounting" concurrent program. The program creates and optionally transfers and posts journal entries to General Ledger. If you do not transfer the journals to General Ledger immediately, you can later submit the "Transfer Journal Entries to GL" concurrent program. Attention: Final journal entries cannot be further modified in Cash Management. Please make sure you are satisfied with the draft journal entries before creating final accounting. In addition to creating final accounting entries, the program can be run in a draft mode, in which case draft journal entries will be created. Such journals cannot be transferred or posted to General Ledger. 13. Run the GL Reconciliation Report Use this report to reconcile the General Ledger cash account to a bank statement balance. This report lists a balance and an adjusted balance for the bank statement. It also lists a separate adjustment amount for un-reconciled receipts, payments, and journal entries, as well as bank errors. Warning: To ensure that this report is accurate, you must first perform these tasks: * Reconcile all statements in Cash Management. * Transfer journal entry transactions from Oracle Payables and Oracle Receivables to your General Ledger. * Post journals in General Ledger, if transfer from sub-ledgers was not in FINAL POST mode. 14. Run the Account Analysis Report for the General Ledger Cash Account Run the Account Analysis Report from General Ledger for the General Ledger Cash Account Flexfield and sort by Source. 15. Review the Account Analysis Report Review the Account Analysis Report to ensure that only bank account related transactions have been posted to the General Ledger Cash Account by checking the Source of the transactions. Valid sources will include Payables and Receivables. Transactions entered directly via General Ledger will have a Source of Manual or possibly Spreadsheet if Web Applications Desktop Integrator (Web ADI) is used. 16. Correct any Invalid Entries to the General Ledger Cash Account (Optional) Reverse or amend any journals incorrectly posted to the General Ledger Cash Account, which were highlighted during the review of the Account Analysis Report. To prevent invalid journal entries to the General Ledger Cash Account enable security rules appropriately. Oracle Financials E-Business Suite Release 12 Period End Procedures 21

22 Chapter 4 Oracle Payables This chapter describes the procedures for performing period-end processing in Oracle Payables Release 12. Business Requirements 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 Oracle Financials E-Business Suite Release 12 Period End Procedures 22

23 close the period for the ledger. If Multi-org Access Control is implemented, period closing can be performed across OU s 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. Oracle Financials E-Business Suite Release 12 Period End Procedures 23

24 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 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 Refer to Chapter 3 Period-End Procedures for Oracle Cash Management. 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. Oracle Financials E-Business Suite Release 12 Period End Procedures 24