Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment!

Transcription

1 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Struggling with managing your inventory A/P Accruals? Can t reconcile to the G/L? Unable to match up accruals for internal orders (IR/ISO) and inventory consignment? And tired of trying to use the latest activity date as opposed to the earliest activity date as found in Release 11i? Learn how you can overcome these issues, even if on Oracle for many years. Prepared by: Doug Volz, Douglas Volz Consulting, Session ID: 10079

2 Learning Points Understand how the Oracle A/P Accruals work Learn how to reconcile your A/P Accruals Find out about solutions to overcome the standard R12 Accrual limitations Slide 2

3 Agenda Inventory A/P Accruals Overview of standard Oracle Processes A/P Accrual Accounting Standard A/P Accrual Processes R12 A/P Accrual Issues Two Approaches Create a Parallel A/P Accrual Reconciliation Create a Matching Report for Miscellaneous Accruals Appendix Slide 3

4 Doug Volz Helping people use Oracle since Professional Summary 35+ years industry, design and consulting and firefighting experience Specializing in Cost Management business solutions Awarded 2014 OAUG Member of the Year Co-designed Oracle Cost Management at Oracle Implementations with international consulting firms, in twelve countries Led the Oracle Applications User Group for Cost Management since 2007 Presenter at Collaborate (OAUG) and UKOUG since 1996 Prior industry positions for General and Cost Accounting management Business Solutions Change cost methods Inventory reconciliation Profit in inventory Intercompany A/P accruals Fix system account setups Multi-org cost accounting reports Product Line & Margin analysis Cost Rollup and Update Cost accounting training Slide 4 4

5 Douglas Volz Consulting, Inc. Helping people use Oracle since 1990 Slide 5

6 Business Solutions Over 30 Presentations Summary Presentation: How to Manage the Inventory and Manufacturing Period Close and Remain Sane Start here, concise summary for these 30+ presentations Plus nifty SQL Open/Close Period Status Report, works across all your inventory organizations and operating units Slide 6

7 Business Solutions Over 30 Presentations A/P Accruals: (R11i) How to Setup, Use and Balance Your A/P Accrual Accounts (R12) A/P Accruals for Release 12 (OAUG Cost Management SIG) (R12) Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Change Your Cost Methods Without Re-implementing: Who Said Changing Cost Methods With Discrete Costing Can't be Done? Costing Tips and Tricks: Make Cost Management Work for You! Oracle Cost Management Features and Workarounds Cost Management & Subledger Accounting (SLA): Cost Accounting As You Want It EBS R12 Cost Accounting with SLA Subledger Accounting for Discrete & EAM Cost Accounting: Product Line and Expense Accounting Made Easy How to Create Shipping Burdens for Oracle Cost Management, in Spite of Subledger Accounting Discrete & Process Cost Accounting Integration: We Can Create Combined Oracle Cost Accounting Reports for Both Discrete and Process Manufacturing Inventory Reconciliation, Interfaces and Period Close Tips: Can We Actually Reconcile Project MFG to Inventory, WIP, Projects & G/L? What Was I Thinking? Reconcile Your Inventory to G/L Balances With Ease, From 1 to 1,000 Inventory Organizations! How in the Dickens Do I Handle Those Month-End Interfaces? (And Why Can t I Close My Books?) Slide 7

8 Business Solutions Over 30 Presentations Periodic Costing: Want to Know Your Average Costs? Run Periodic Costing Alongside Your Costing Method! Profit in Inventory Solutions: Does Rel. 12 Solve Global Inter-Company Issues for Multiple Ledgers, Profit in Inventory and COGS? Transactions and Variances: eam Costing, How Is It Different from Oracle MFG Costing? How to Setup, Transact and Use Outside Processing InterCompany Fulfillment Delivery Options - an Oracle DropShip Example Manufacturing Variances for Oracle EBS Overview of Oracle Discrete Costing for Manufacturing Receiving as it Relates to Oracle Cost Management Ship to Invoicing Oracle Transaction Flows: Tracing a Sale Through Inventory Other Related Presentations: Cost Allocations: Different Ways to Use Oracle EBS Cost Elements, Sub-Elements and Cost Allocation Methods Change Management is So Important! Don t Forget Your Business Processes! Oracle Can t Do it All for You Major Tables & Relationships for Oracle EBS Costing What's New in Oracle Release 12 the Changes that Matter Why Upgrade to Oracle Release 12 Costing -What's In it for Me? Slide 8

9 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Overview of standard Oracle Processes Slide 9

10 Perpetual vs. Periodic Accrual Solutions Periodic accruals occurs at month-end (Uninvoiced Receipts Report and Period-End Receipt Accruals Program) Periodic accruals not accounted for at time of receipt Perpetual accruals ensure that valued quantities equals accounting entries accounted for at time of receipt Don t accrue expenses upon receipt (unless you are a governmental agency or heavily into Project Control) Slide 10

11 Summary of A/P Accrual Functionality Inventory A/P Accruals Accrual Reconciliation Detail and Summary Reports Write-Off Accrual Screen/Form Separate write-off forms for AP/PO, Misc. Inventory and WIP transactions When you write off entries you create Write-Off journal entries Accrual Write-Off Reports Accrual Reconciliation Reports AP and PO Accrual Reconciliation Report Summary Accrual Reconciliation Report Miscellaneous Accrual Reconciliation Report Expense (Periodic) A/P Accruals Period-End Receipt Accruals Program Uninvoiced Receipts Report Slide 11

12 Uninvoiced Receipts vs. Accrual Reconciliation Reports Uninvoiced Receipts Report works well for: Expenses accrued at period-end Only an estimate for online (at time of receipt) accruals Accrual Reconciliation Reports work well for: Inventory, OSP, and expenses accrued at time of receipt Slide 12

13 Background Information for A/P Accruals May have multiple lines per PO May have multiple scheduled receipts and PO releases per line May have multiple PO distributions per line or scheduled receipt, such as multiple project numbers per PO line Four stored accounts per PO distribution Payables matches to PO Distributions PO HEADERS (PO_HEADERS_ALL) PO LINES (PO_LINES_ALL) PO SHIPMENTS (PO_LINE_LOCATIONS_ALL) PO DISTRIBUTIONS (PO_DISTRIBUTIONS_ALL) PO RELEASES (PO_RELEASES_ALL) Slide 13

14 Accrual Accounting Entries Perpetual Accruals Releases 10 to Purchase order receipt A/P Invoice match PO Return to vendor A/P Invoice correction PO Receipt delivery Expense A/P accrual Release Transfer to Regular (consignment) Internal Orders / Logical Transactions Retroactive Price Adjustments Release 12 Slide 14

15 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! A/P Accrual Accounting Slide 15

16 Source of PO Accrual Accounts Type of Account Charge Account Accrual Account Variance (IPV) Account Expense Destination Cost Center or Expense Account Expense A/P Accrual Account Cost Center or Expense Account Inventory / WIP Destination Default Subinv. or Org Mat l Acct Inventory A/P Accrual Account Inventory IPV Account Budget Account Expense Budget Account Default Subinv/Org Encumbrance Account Slide 16

17 Accounting Entries for a PO Receipt Receive one $100 PO unit price Account Debit Credit Receiving Account 100 A/P Accrual Account 100 Receiving Value Account Inventory A/P Accrual Account Slide 17

18 Accounting Entries for an A/P Invoice Match Same item, $80 invoice unit price, $100 PO unit price Account Debit Credit A/P Accrual Account 100 A/P Trade Payables 80 Invoice Price Variance 20 A/P Accrual Account A/P Trade Payables Invoice Price Variance 20 Slide 18

19 Accounting Entries for a PO Return to Vendor Same item, $100 PO unit price Account Debit Credit A/P Accrual Account 100 Receiving Account 100 A/P Accrual Account Receiving Account Slide 19

20 Accounting Entries for an A/P Invoice Correction Same item, $80 invoice unit price Account Debit Credit New Charge Account 80 Old Charge Account 80 New Charge Account Old Charge Account Slide 20

21 Accounting Entries for PO Receipt Deliveries Account Debit Credit Delivery to stock inventory (PO Receipt) Material (Subinv/Org) Account XXX Receiving Account XXX Delivery to WIP inventory (Outside Processing Receipt) Job OSP Account XXX Receiving Account XXX If using standard costing you may have PPV entries as well Slide 21

22 PO Accounting Accrual Summary by T Account Transaction Receipt Delivery to Stock Invoice Match Receiving Value Inventory A/P Accrual Delivery to Stock Invoice Match Material Value Invoice Price Variance Invoice Match Trade Payables 80 Slide 22

23 Accounting Entries for Inventory Consignment: Transfer to Regular Account Debit Credit Delivery to stock inventory (PO Receipt for Transfer to Regular ) Material (Subinv/Org) Account XXX AP Accrual Account XXX Transfer to WIP inventory (Backflush from Subinventory above) Account Debit Credit WIP Material Account Material (Subinv/Org) Account XXX Consignment Invoice Match (Payables) XXX Account Debit Credit A/P Accrual Account Trade Payables Account XXX XXX Matched but reported on Miscellaneous Accrual Report Slide 23

24 Accounting Entries for Internal Orders Receipt into Inventory (Internal Order Intransit Receipt) Account Debit Credit Subinv. or Org Accounts XXX A/P Accrual Account XXX Internal Order Invoice Match (Payables) Account Debit Credit A/P Accrual Acct XXX Trade Payables Account XXX Reported on Miscellaneous Accrual Report and not matched Slide 24

25 Accounting Entries for Logical Intercompany Receipts Receipt into Inventory (Logical Intercompany Receipt) Account Debit Credit Subinv. or Org Accounts XXX I/C Relations AP Accrual Account XXX Intercompany Invoice Match (Payables) Account Debit Credit I/C Relations A/P Accrual Acct XXX Trade Payables Account XXX Reported on Miscellaneous Accrual Report and not matched Slide 25

26 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Standard A/P Accrual Processes Slide 26

27 Process Flow for R12 A/P Accrual Functionality Inventory A/P Accruals Accrual Reconciliation Detail and Summary Reports Write-Off Accrual Screen/Form Separate write-off forms for AP/PO vs. Inventory transactions When you write off entries you create Write-Off journal entries Accrual Write-Off Reports Accrual Reconciliation Reports Summary Accrual Reconciliation Report AP and PO Accrual Reconciliation Report Miscellaneous Accrual Reconciliation Report Expense (Periodic) A/P Accruals Period-End Receipt Accruals Program Uninvoiced Receipts Report Slide 27

28 Oracle Accrual Processes Process Flow for At Time of Receipt Accruals Run Accrual Load Run Accrual Summary Report Report Output Run Accrual Detail Reports Compare to G/L Research Issues Do Write- Offs or Txn Corrections Post to G/L & Run Write- Off Reports Slide 28

29 A/P Accrual Table Structures Release 12 table structures CST_ACCRUAL_ACCOUNTS (holds valid accrual accounts) CST_AP_PO_RECONCILIATION (matched AP/PO entries w/outstanding balances) CST_MISC_RECONCILIATION (unmatched AP and AP/ INV consignment) CST_RECONCILIATION_BUILD (accrual load submissions) CST_RECONCILIATION_SUMMARY (summary of CST_AP_PO_RECONCILIATION) CST_WRITE_OFFS (write-off transaction header table) CST_WRITE_OFF_DETAILS (write-off transaction details table) Slide 29

30 Run Accrual Load Program Menu path: Cost Management SLA => Report => Accrual Reconciliation Monthly Load Watch out for timestamps Slide 30

31 Run Accrual Load Program (Continued) Accrual Reconciliation Load considers the following sources: Source Cost Management Cost Management Cost Management Payables Journal Category Receiving Inventory WIP Purchase Invoices Only picks up transactions which have been: Processed by Create Accounting Transferred to G/L (Journal Import, but G/L posting is optional) Slide 31

32 Run Accrual Load Program (Continued) Run Accrual Reconciliation Load one at a time (even if for different Operating Units!) Incremental load: load is run for a specific date range. Transactional data picked up only from the data range specified (if running for the first time ignores beginning date and finds the first transaction) Accrual data is summarized and accrual balances are re-calculated at the PO distribution level - PO, A/P and Write Off balances as well as last activity date - Zero balance accrual data are deleted from the table, this eliminates up to 80%+ of the data Slide 32

33 Run Summary Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Summary Accrual Reconciliation Report There are no date range parameters you have to reconcile the prior month before you load the next month Slide 33

34 Example Summary Accrual Reconciliation Report Misc. Accrual Report AP and PO Reconc.Report Misc. Accrual Report Misc. Accrual Report Summarizes both the Miscellaneous Accrual Report and the AP and PO Reconciliation Report Slide 34

35 Run AP and PO Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report There are no date range parameters you have to reconcile the prior month before you load the next month Slide 35

36 Run AP and PO Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Click on the Optionsbutton to find three templates Detail, Summary and Excel Slide 36

37 AP and PO Accrual Reconciliation Report Summary Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Summary down to the PO Distribution Level Slide 37

38 AP and PO Accrual Reconciliation Report Detail Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Shows the A/P Match Detail report shows every transaction Slide 38

39 Miscellaneous Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Miscellaneous Accrual Reconciliation Report Slide 39

40 Miscellaneous Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Miscellaneous Accrual Reconciliation Report => Options => Slide 40

41 Miscellaneous Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Miscellaneous Accrual Reconciliation Shows the transaction type such as Consignment, inventory transaction type or A/P matching issue Detailed, transaction by transaction report Slide 41

42 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! R12 A/P Accrual Issues Slide 42

43 R12 A/P Accrual Reconciliation Improvements R12 Summary of Enhancements Enhanced Performance Incremental data load using from and to date to load data with outstanding accrual balances only Patches available, Releases 12.0.x and 12.1.x had performance issues Increased Usability Detailed and summary reporting Mass write-off capabilities Write-offs post to SLA and G/L Designated A/P Accrual Accounts Prior version used a distinct list of purchase order accrual accounts Slide 43

44 R12 A/P Accrual Reconciliation Issues May be More Difficult to Reconcile: Only Stores Net Balances If Oracle functionality misses a PO you can t find it can t see what is missing Unable to rerun prior months (have to open a service request and use SQL to purge and start over) Matching and Run Issues No matching for intercompany entries Inventory consignment considered as Miscellaneous Accrual Entries Can t run the Accrual Load multiple times at once even for different operating units If upgraded from R11i, only reports Accruals if upgraded for Subledger Accounting Dropped R11i Features Uses last receipt date or last activity(invoice) date, not earliest activity date Aging based on report run date, not ending transaction date Unable to look back, balances based on latest Accrual Load Cannot reconcile against prior G/L periods Slide 44

45 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Two Approaches Slide 45

46 R12 A/P Accrual Reconciliation Custom Solution Approach One: Create a Parallel A/P Accrual Reconciliation Uses but does not affect R12 standard functionality Rebuilds A/P Accrual Reconciliation based on designated starting date Based on Receiving, Inventory and Payables accounting transactions Can be re-run any number of times Adds back the R11i features for Aging Date and reconciling prior months Approach Two: Create a Matching Report This approach only addresses the matching issues for Inventory Consignment, Internal Order and Logical transactions. It is useful if you are able to reconcile and efficiently use your standard Oracle R12 A/P Accrual functionality and only need to improve your matching capabilities for the Miscellaneous Reconciliation Report. Slide 46

47 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Create a Parallel A/P Accrual Reconciliation Slide 47

48 R12 A/P Accrual Reconciliation Custom Solution Approach Create a Parallel A/P Accrual Reconciliation: Uses but does not affect R12 standard functionality Rebuilds A/P Accrual Reconciliation based on designated starting date Based on Receiving, Inventory and Payables accounting transactions Can be re-run any number of times Can run the Accrual Load across all operating units or by operating unit Adds Back R11i Features Aging Date Calculates and reports earliest and latest dates Aging date based on report parameters, not run date Reconcile prior months at any time Uses Toand From Dates on report parameters Easy to see if agrees to G/L, by accounting period Slide 48

49 Process Flow for Custom Accrual Processes Run Accrual Load One-time process for initial load (don t have to load from beginning of time) Run Accrual Look-Back Run Custom Accrual to G/L Comparison Report Compare to G/L by Period Run Accrual Detail Reports Run Custom Accrual to Oracle Comparison Report Compare against Oracle Accruals Slide 49

50 R12 A/P Accrual Recon. Custom Solution (Cont d) Enhanced Features Don t Have to Start From Beginning of Time: Choose a starting date, say two years worth of transactions Look-back features to ensure all receipts and invoices are represented completely Designed to Reconcile to G/L: Based on Receiving, Inventory and Payables accounting transactions Can be re-run any number of times Never deletes entries, moves unnecessary entries to accrual history table Matches Intercompany Receipts with Intercompany Payables Invoices Compliments R12 Features -automatically detects if entries already written off Exception Reporting for Create Accounting, Upgrade and Process Issues Slide 50

51 Underlying Tables and Custom Accrual Processes Run Custom Accrual Load Run Accrual Look-Back Active Accrual Entries Transfer Write-Offs & Zero Balances Program Accrual History Entries Run Custom Accrual to Oracle Accrual Comparison Report Run Custom Accrual to G/L Comparison Report Compare against Oracle Accruals Compare against G/L by Period Slide 51

52 R12 A/P Accrual Recon. Custom Solution (Cont d) Enhanced Reporting and Reconciliation Comparison reports: Ensure complete subledger info: Compare custom A/P Accrual entries and G/L Find missing POs: Compare custom A/P Accrual balances against Oracle s Accruals Find data issues: Find Create Accounting, upgrade, consignment and other issues Summary by Aging Date By Earliest or Latest Date Summary by Outstanding Balances, High to Low Reconcile prior months at any time: Uses To and From Dates on report parameters No timing differences Uses R12 Accrual Features Uses and detects R12 accrual write-offs Uses the Oracle accrual account setups Slide 52

53 Sample Layouts for Custom Accrual Reconciliation Reports Slide 53

54 Resolve Your Inventory A/P Accruals Issues Now! Even for Intercompany Internal Orders and Consignment! Create a Matching Report Slide 54

55 Matching Miscellaneous A/P Accruals The Miscellaneous Accrual Matching Report tells you what matched and did not match Write-off all of your miscellaneous A/P Accruals And using the output from the Miscellaneous Accrual Matching Report reinstate the outstanding receipts and invoices Slide 55

56 Sample Miscellaneous A/P Accrual Matching Reports Based on the information in this section you should be able to produce the following summary and detail reports: Slide 56

57 Matching Inventory Consignment Processes to POs Inventory consignment is a two-step process Backflush consignment components into WIP (Transfer to Regular material transactions) Run the "Create Consumption Advice" program The Inventory A/P Accrual entry is created when you backflush components into WIP But don t forget to run the Create Consumption Advice program The Create Consumption Advice program matches and applies the PO Release to the consumption advice (PO_DISTRIBUTION_ID) Create a custom Find Missing Consumption Advice Reportto find these errors Slide 57

58 Matching Inventory Consignment Processes(Cont d) For Inventory Consignment, use the following information: MTL_CONSUMPTION_TRANSACTIONS mct mct.transaction_id mct.consumption_processed_flag If mct.consumption_processed_flag = N, po_distribution_id IS NULL If mct.consumption_processed_flag = Y, has a po_distribution_id mct.po_distribution_id MTL_MATERIAL_TRANSACTIONS mmt mmt.transaction_type_id = 74 mmt.inventory_item_id mmt.transaction_date MTL_TRANSACTION_ACCOUNTS mta mta.accounting_line_type = 16 Accrual mta.transaction_date PO_DISTRIBUTIONS_ALL pod pod.po_distribution_id Slide 58

59 Matching Inventory Consignment Processes(Cont d) For Inventory Consignment, Basic Table Joins: -- ======================================================== -- Inventory Consignment joins to material transactions -- ======================================================== AND mmt.transaction_type_id = 74 AND mct.transaction_id = mmt.transfer_transaction_id AND mmt.transaction_id = mta.transaction_id AND mct.consumption_processed_flag = Y AND mmt.transaction_date = mct.transaction_date -- ======================================================== -- Inventory Consignment joins to purchase orders -- ======================================================== AND mct.transaction_source_id = poh.po_header_id AND mmt.transaction_source_id = poh.po_header_id AND mct.po_distribution_id = pod.po_distribution_id Slide 59

60 Matching Inventory Consignment Processes(Cont d) For Consignment A/P Invoices, use the following information: AP_INVOICES_ALL ai ai.invoice_id ai.invoice_num AP_INVOICE_DISTRIBUTIONS_ALL aid aid.invoice_id aid.invoice_line_number aid.po_distribution_id PO_HEADERS_ALL poh poh.segment1 -- PO Number poh.po_header_id PO_LINES_ALL pol pol.po_line_id pol.line_num Slide 60

61 Matching Inventory Consignment Processes(Cont d) For Consignment A/P Invoices, use the following information: PO_RELEASES_ALL pr pr.po_release_id pr.release_num PO_LINE_LOCATIONS_ALL pll, pll.line_location_id pll.po_line_id pll.po_header_id PO_DISTRIBUTIONS_ALL pod pod.po_distribution_id pod.line_location_id Slide 61

62 Matching Inventory Consignment Processes(Cont d) For Consignment, A/P Basic Table Joins: -- ======================================================== -- Invoice and Purchase Order Joins -- ======================================================== AND ai.invoice_id = aid.invoice_id AND aid.po_distribution_id = pod.po_distribution_id AND pll.line_location_id = pod.line_location_id AND pol.po_line_id = pod.po_line_id AND pol.po_line_id = pll.po_line_id AND poh.po_header_id = pol.po_header_id AND pod.po_release_id = pr.po_release_id (+) -- ======================================================== -- Only get A/P distributions that have been matched to POs -- ======================================================== AND aid.po_distribution_id IS NOT NULL Slide 62

63 Internal Order Processes Oracle Processes Accrual Entries Approve Internal Requisition Run Create Internal Order request Run Order Import request Pick Release the Sales Order Ship Confirm to Internal Customer Receive the Goods INV: Credit A/P Accrual Create Intercompany A/R Invoices Run Auto Invoice Master Program Create A/P Intercompany Invoices A/P: Debit A/P Accrual Slide 63

64 Logical I/C and IR/ISO Entries Inventory Logical Intercompany Shipment Receipt Accrual Entry Slide 64

65 Logical I/C and IR/ISO Entries Payables How Can This Be Matched? No Receipt, PO Number, Release, Shipment or Distribution information! Slide 65

66 Matching Internal Order Receipts to A/P Invoices Unable to match on the Internal Requisition Number Not on the Inventory Logical Intercompany Shipment Receipt Not on the Payables Intercompany Invoice But you can match on the Internal Sales Order Number (ISO) The Inventory transaction carries the system references to the ISO The Payables invoice carries the system references to the A/R invoice And from the A/R invoice information you can join back to the ISO Different coding logic for Intransit Receipts and Logical Receipts Slide 66

67 Matching Internal Orders (Cont d) For Logical Intercompany Shipment Receipts, use the following: MTL_MATERIAL_TRANSACTIONS mmt mmt.transaction_id mmt.transaction_id = cmr.transaction_id mmt.parent_transaction_id -- used for online MTA queries mmt.trx_source_line_id = iso_line.line_id mmt.transaction_type_id IN (10,13) Logical Sales Issue & Return OE_ORDER_HEADERS_ALL iso iso.header_id iso.order_number OE_ORDER_LINES_ALL iso_line iso_line.order_source_id = 0 -- "this is an Oracle WOW" iso_line.line_category_code = 'ORDER iso_line.header_id iso_line.line_id iso_line.line_number Slide 67

68 Matching Internal Orders (Cont d) For Logical Intercompany Shipment Receipts, SO to MMT Joins: -- ======================================================== -- Internal SO joins, headers to lines -- Not sourced by internal requisitions -- ======================================================== AND iso_line.order_source_id = 0 -- "this is an Oracle WOW" AND iso_line.line_category_code = 'ORDER' AND iso.header_id = iso_line.header_id -- ======================================================== -- Internal SO joins to material transactions and items -- ======================================================== AND mmt.trx_source_line_id = iso_line.line_id AND mmt.inventory_item_id = iso_line.inventory_item_id AND cmr.transaction_type_code IN ('10','13 ) AND mmt.transaction_type_id IN (10, 13) AND mmt.transaction_id = mta.transaction_id AND mta.accounting_line_type = Accrual AND mmt.transaction_id = cmr.inventory_transaction_id Slide 68

69 Matching Internal Orders (Cont d) For Internal Order Intransit Receipts, use the following: MTL_MATERIAL_TRANSACTIONS mmt mmt.transaction_id = cmr.transaction_id mmt.transaction_source_type_id = 7 -- Int Order Intr Receipt cmr.transaction_type_code = '61 -- Int Order Intr Receipt -- Joins to find the Internal Order Shipment Transaction mmt.transfer_transaction_id = mmt2.transaction_id mmt2.transaction_source_type_id = 8 -- Int Order Intr Ship OE_ORDER_HEADERS_ALL iso iso.header_id iso.order_number OE_ORDER_LINES_ALL iso_line iso_line.order_source_id = for internal orders iso_line.line_category_code = 'ORDER iso_line.header_id iso_line.line_id iso_line.line_number Slide 69

70 Matching Internal Orders (Cont d) For Internal Order Intransit Receipts, CMR and MMT Joins: -- ======================================================== -- Join Misc. Accrual Internal Order entries to Material Txns -- ======================================================== AND mmt.transaction_id = cmr.inventory_transaction_id AND cmr.transaction_type_code = '61' AND mmt.transaction_source_type_id = 7 -- Int Order Intr Rcpt AND mtt.transaction_type_id = mmt.transaction_type_id -- Joins to find the Internal Order Shipment Transaction AND mmt.transfer_transaction_id = mmt2.transaction_id AND mmt2.transaction_source_type_id = 8 -- Int Order Intr Ship Slide 70

71 Matching Internal Orders (Cont d) For Internal Order Intransit Receipts, SO to MMT Joins: -- ======================================================== -- Internal SO joins, headers to lines -- ======================================================== AND iso_line.order_source_id = for internal orders AND iso_line.line_category_code = 'ORDER' AND iso.header_id = iso_line.header_id -- ======================================================== -- Internal SO joins to the Internal Order Shipment Transaction -- ======================================================== AND mmt2.trx_source_line_id = iso_line.line_id AND mmt2.inventory_item_id = iso_line.inventory_item_id Slide 71

72 Matching Internal Orders (Cont d) For Intercompany Payables Invoices, use the following: AP_INVOICES_ALL ai ai.invoice_id ai.invoice_num AP_INVOICE_LINES_ALL ail ail.invoice_id Ail.LINE_NUMBER AP_INVOICE_DISTRIBUTIONS_ALL aid ail.source_trx_id = rctl.customer_trx_id ail.source_line_id = rctl.customer_trx_line_id RA_CUSTOMER_TRX_LINES_ALL rctl rctl.customer_trx_id rctl.customer_trx_line_id rctl.interface_line_context = 'INTERCOMPANY RA_CUSTOMER_TRX_ALL rct rct.customer_trx_id Slide 72

73 Matching Internal Orders (Cont d) For Intercompany Payables Invoices, use the following: OE_ORDER_HEADERS_ALL iso iso.header_id iso.order_number OE_ORDER_LINES_ALL iso_line iso_line.order_source_id = 0 -- "this is an Oracle WOW" iso_line.line_category_code = 'ORDER iso_line.header_id iso_line.line_id iso_line.line_number Slide 73

74 Matching Internal Orders (Cont d) For Intercompany Payables Invoices, A/P Joins: -- ======================================================== -- Invoice, invoice line, distribution and PO Vendor Joins -- ======================================================== AND ai.invoice_id = aid.invoice_id AND ai.invoice_id = ail.invoice_id -- aid has an index on invoice_id, invoice_ line_number and org_id -- ail has an index on invoice_id and line_number AND aid.invoice_id = ail.invoice_id AND aid.invoice_line_number = ail.line_number -- ======================================================== -- Only get A/P distributions that are not matched to POs -- ======================================================== AND aid.po_distribution_id IS NULL -- not matched to POs Slide 74

75 Matching Internal Orders (Cont d) For Intercompany Payables Invoices, A/P to A/R Joins: -- ======================================================== -- Only get A/P distributions for Internal Orders -- ======================================================== AND aid.reference_1 IS NOT NULL -- Internal Orders customer_trx_line_id AND aid.reference_2 IS NOT NULL -- Internal Orders Logical IC Sales Issue -- ======================================================== -- Join Payables to Receivables to get internal order info -- ======================================================== -- Use ail to join to RA tables to avoid to_number qualifiers -- on aid reference columns AND ail.source_trx_id = rctl.customer_trx_id AND ail.source_line_id = rctl.customer_trx_line_id AND rctl.interface_line_context = 'INTERCOMPANY' AND rct.customer_trx_id = rctl.customer_trx_id Slide 75

76 Matching Internal Orders (Cont d) For Intercompany Payables Invoices, A/R ISO Columns: -- ======================================================== -- A/R References to Internal Sales Orders -- ======================================================== to_number(rctl.interface_line_attribute9), -- ISO_HEADER_ID to_number(rctl.sales_order, -- SALES_ORDER_NUMBER to_number(rctl.interface_line_attribute9), -- ISO_LINE_ID to_number(rctl.interface_line_attribute2), -- ISO_LINE_NUMBER Slide 76

77 Acknowledgements Tom Buechler, eprentise, for excellent advice on how to match internal order payables invoices with internal orders Helene Abrams, eprentise, for allowing use of their Vision environment Virbahu Jain, Hypertherm Inc., OAUG Cost Management SIG co-officer, for paper review and advice on consignment features Slide 77

78 Conclusions These accrual processes are very important in ensuring your margins are accurate Proper implementation and data conversion is essential Requires accurate receiving and A/P matching processes Consider custom solutions if you use consignment or internal orders, or want more control over reconciliation Slide 78

79 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 79

80 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 80

81 Perpetual vs. Periodic Accrual Solutions Periodic accruals occurs at month-end (Uninvoiced Receipts Report) Periodic accruals not accounted for at time of receipt Perpetual accruals ensure that valued quantities equals accounting entries accounted for at time of receipt Don t accrue expenses upon receipt (unless you are a governmental agency or heavily into Project Control) Slide 81

82 Uninvoiced Receipts vs. Accrual Reconciliation Reports Uninvoiced Receipts Report works well for: Expenses accrued at period-end Only an estimate for online (at time of receipt) accruals Accrual Reconciliation Reports work well for: Inventory, OSP, and expenses accrued at time of receipt Slide 82

83 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 83

84 Where You Setup the Accrual Processes Setup in Oracle Purchasing Setup in Oracle Inventory Setup in Oracle Cost Management Slide 84

85 Setup in Oracle Purchasing Menu path: Cost Management SLA => Setup => Account Assignments => Purchasing Options Use the Define Purchasing Options Form Set the Expense A/P Accrual Account Set the Accrual Options for Expenses Slide 85

86 Setup in Oracle Purchasing Menu path: Cost Management SLA => Setup => Account Assignments => Receiving Options Use the Define Receiving Options for each Org: Receiving Account Retroactive Price Adjustment Slide 86

87 When Defining Purchase Orders Menu path: Purchasing, Vision Operations (USA) => Purchase Orders => Purchase Order Summary Accrue on Receipt Flag set on the PO shipment More difficult to mess it up You have to deliberately set up the Accrue on Receipt field on your folder form before you can see the Accrue on Receipt settings Slide 87

88 Setup in Oracle Inventory Menu path: Cost Management SLA => Setup => Account Assignments => Organization Parameters Organization Parameters Inventory AP Accrual Account Set your PPV and IPV Accounts Also used for AP-PO Accrual Write-Offs Set your Inventory A/P Accrual Account Slide 88

89 Setup in Oracle Inventory (cont d) Menu path: Cost Management SLA => Setup => Account Assignments => Organization Parameters Intercompany Accrual Accounts Use separate inventory and expense accrual accounts for intercompany A/P accruals Slide 89

90 R12 Setup For A/P Accruals Menu path: Cost Management SLA => Setup => Accrual Write-Offs => Select Accrual Accounts List of A/P Accrual Accounts to Reconcile Slide 90

91 Caution Use separate accounts for each type of system account: Expense A/P Accrual Account Inventory A/P Accrual Account Receiving Account Expense Purchase Order Charge Accounts Other inventory, WIP and price variance accounts Teach Payables staff to not use the A/P Accrual Account This account should be always assigned automatically Or set up G/L security rules to prevent use Slide 91

92 Oracle Cost Management Profiles Menu path: System Administrator => Profile => System CST: Accrual Age in Days Indicates whether to use the last receipt date or last activity date for age in days calculation Last Receipt Date: a PO distribution s age in days is always determined by the last receipt date Last Activity Date: a PO distribution s age in days is always determined by the last invoice date Used by the AP and PO Accrual Reconciliation Report Missing feature: prior releases calculated the aging date based on the earliest activity date, not the last activity date Slide 92

93 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 93

94 Accrual Reconciliation & Write-Off Process Flow Month-End Close A/P Accrual Reconciliation Process A/P Accrual Research and Corrections Month End Record Transactions Setup Set Up Accrual Accounts Review Report Output Entries to Write Off? Yes No Close Payables Run AP and PO Reconciliation Report AP and PO Write-Off Form If Purchasing is still open you can backdate A/P Accrual Write-Offs Close Inventory / WIP Period-End A/P Accrual Processes Run Accrual Load Program Run Accrual Summary Report Run Accrual Summary Report Run Miscellaneous Reconciliation Report View Write-Off Transactions Miscellaneous Write-Off Form Run Write-Off Report(s) A/P Accrual Process Complete Close Purchasing Review Report Output Yes Entries to Write Off? No Compare to G/L Agrees to G/L Not Agrees to G/L Research Outof-Balance Find Manual JEs or Posting Errors Find System Issues Agrees to G/L Slide 94

95 A/P Accrual Table Structures Release 12 table structures CST_ACCRUAL_ACCOUNTS (holds valid accrual accounts) CST_AP_PO_RECONCILIATION (matched AP/PO entries w/outstanding balances) CST_MISC_RECONCILIATION (unmatched AP and AP/INV consignment) CST_RECONCILIATION_BUILD (accrual load submissions) CST_RECONCILIATION_SUMMARY (summary of CST_AP_PO_RECONCILIATION) CST_WRITE_OFFS (write-off transaction header table) CST_WRITE_OFF_DETAILS (write-off transaction details table) Slide 95

96 Define A/P Accrual Accounts to Reconcile Menu path: Cost Management SLA => Accrual Write-Offs => Select Accrual Accounts The Load Accrual Process will fail if Accrual Accounts are not defined Slide 96

97 Run Accrual Load Program Menu path: Cost Management SLA => Report => Accrual Reconciliation Monthly Load Watch out for timestamps Slide 97

98 Run Accrual Load Program (Continued) Accrual Reconciliation Load considers the following sources: Source Cost Management Cost Management Cost Management Payables Journal Category Receiving Inventory WIP Purchase Invoices Only picks up transactions which have been: Processed by Create Accounting Transferred to G/L (Journal Import, but G/L posting is optional) Slide 98

99 Run Accrual Load Program (Continued) Run Accrual Reconciliation Load one at a time (even if for different Operating Units!) Incremental load: load is run for a specific date range. Transactional data picked up only from the data range specified (if running for the first time ignores beginning date and finds the first transaction) Accrual data is summarized and accrual balances are re-calculated at the PO distribution level - PO, A/P and Write Off balances as well as last activity date - Zero balance accrual data are deleted from the table, this eliminates up to 80%+ of the data Slide 99

100 Run Summary Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Summary Accrual Reconciliation Report Slide 100

101 Example Summary Accrual Reconciliation Report Misc. Accrual Report AP and PO Reconc.Report Misc. Accrual Report Misc. Accrual Report Summarizes both the Miscellaneous Accrual Report and the AP and PO Reconciliation Report Slide 101

102 Run AP and PO Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report There are no date range parameters you have to reconcile the prior month before you load the next month Slide 102

103 Run AP and PO Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Click on the Optionsbutton to find three templates Detail, Summary and Excel Slide 103

104 AP and PO Accrual Reconciliation Report Summary Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Summary down to the PO Distribution Level Slide 104

105 AP and PO Accrual Reconciliation Report Detail Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Shows the A/P Match Detail report shows every transaction Slide 105

106 Miscellaneous Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Miscellaneous Accrual Reconciliation Report There are no date range parameters you have to reconcile the prior month before you load the next month Slide 106

107 Miscellaneous Accrual Reconciliation Report Menu path: Cost Management SLA => Report => Accrual Reconciliation => Miscellaneous Accrual Reconciliation Shows the transaction type such as Consignment, inventory transaction type or A/P matching issue Detailed, transaction by transaction report Slide 107

108 Run Create Accounting and Post to G/L Menu path: Cost Management SLA => SLA => Create Accounting Run Create Accounting Cost Management process with the process category Receiving does both receiving and accruals Need to run Create Accounting even though the inventory org is closed Slide 108

109 Run Create Accounting and Post to G/L Menu path: Cost Management SLA => SLA => Create Accounting Create Accounting Output Subledger Accounting Program Report Review the summary totals and check for errors Slide 109

110 Summary of A/P Accrual Functionality Inventory A/P Accruals Write-Off Accrual Screen/Form Separate write-off forms for AP/PO vs. Inventory transactions When you write off entries you create Write-Off journal entries Accrual Write-Off Reports Accrual Reconciliation Reports Summary Accrual Reconciliation Report AP and PO Accrual Reconciliation Report Miscellaneous Accrual Reconciliation Report Expense (Periodic) A/P Accruals Period-End Receipt Accruals Program Uninvoiced Receipts Report Slide 110

111 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 111

112 AP and PO Accrual Reconciliation Report Detail Menu path: Cost Management SLA => Report => Accrual Reconciliation => AP and PO Accrual Reconciliation Report Write-off this balance on PO Number 1585 Review and decide what to write-off Slide 112

113 AP PO Accrual Write-Off Example Menu path: Cost Management SLA => Accrual Write-Offs => AP and PO Find the PO Balance to write off Date can be from a closed Inventory period, but, Purchasing has to be open 1) Click here 2) Click Save and enter the transaction parameters Note:you cannot enter an offset account. The offset comes from the stored PO Distribution Variance Account (which originally came from the inventory organization s IPV account). 3) Click here to submit Slide 113

114 AP PO Accrual Write-Off Example Menu path: Cost Management SLA => Accrual Write-Offs => AP and PO Submit the Write-Off and the balance disappears Writes offs all entries from the Purchase Order (Distribution) Slide 114

115 AP PO Accrual Write-Off Example Menu path: Cost Management SLA => Report => Accrual Reconciliation => Summary Accrual Reconciliation Report And the PO balance disappears from the A/P Accrual Reports PO 1585 is gone Slide 115

116 AP PO Accrual Write-Off Reversal Example Menu path: Cost Management SLA => Accrual Write-Offs => View Write-Offs But what if you made a mistake? View prior write-offs and reverse them Enter your parameters For this example choose AP-PO Write-Offs Only For Intercompany and unmatched entries Slide 116

117 AP PO Accrual Write-Off Reversal Example (Cont d) Menu path: Cost Management SLA => Accrual Write-Offs => View Write-Offs Find the write-off and reverse it If Purchasing is open you can backdate transactions 1) Click here 2) Click Save, enter the transaction parameters 3) Click here to submit Will reverse this A/P Accrual write-off Slide 117

118 AP PO Accrual Write-Off Reversal Example(Cont d) Menu path: Cost Management SLA => Accrual Write-Offs => View Write-Offs View your write-offs and write-off reversals Write-Off Reversal Slide 118

119 AP PO Accrual Write-Off Reversal Example (Cont d) Menu path: Cost Management SLA => Report => Accrual Reconciliation => Accrual Write-Off Report Report your A/P Accrual Write-Offs Watch out for timestamps, defaults to 00:00:00 Slide 119

120 AP PO Accrual Write-Off Reversal Example (Cont d) Menu path: Cost Management SLA => Report => Accrual Reconciliation => Accrual Write-Off Report Shows both write-offs and the write-off reversals Write-Off Reversal Write-Off Same as PO Distribution Variance Account. (When you originally defined the PO, the Org s IPV Account was copied over into the PO Distribution Variance Account.) Slide 120

121 AP PO Accrual Write-Off Reversal Example (Cont d) Menu path: Cost Management SLA => Report => Accrual Reconciliation => Summary Accrual Reconciliation Report PO 1585 balance now shows up PO 1585 Slide 121

122 Viewing Journals from Create Accounting Menu path: Cost Management SLA => SLA => Inquiry => Journal Entries Cost Management SLA => Accrual Write-Offs => Tools => View Accounting Drill from A/P Write-Offs into Subledger Accounting entries Same write-off entries Slide 122

123 A/P Accrual Reconciliation and Write-Off Write Off Activity is tracked by a Write Off transaction Good audit trail Journals written into Subledger Accounting (SLA) For write-off entries matched to POs (AP and AP Write-Offs), the Offset Account comes from the Purchase Order s stored PO Distribution Variance Account (per the default SLA rules) Only accrual data with outstanding balances will be kept in the accrual reconciliation tables Decrease the volume of data Enhance the performance Enhance the usability But don t fall behind on your reconciliations. Slide 123

124 Miscellaneous Accrual Write-Offs Menu path: Cost Management SLA => Accrual Write-Offs => Miscellaneous You can pre-select all entries you find saves on clicking Slide 124

125 Miscellaneous Write-Offs Menu path: Cost Management SLA => Accrual Write-Offs => Miscellaneous 1) Select the Write-Offs 2) Click Save, enter the transaction parameters 3) Enter the account to use for charging the misc. write-off 4) Click here to submit Slide 125

126 View Miscellaneous Write-Offs Menu path: Cost Management SLA => Accrual Write-Offs => View Write-Offs Click here to see only Miscellaneous Write-Offs Slide 126

127 View Miscellaneous Write-Offs Menu path: Cost Management SLA => Accrual Write-Offs => View Write-Offs You can reverse this write-offs, same process as before Slide 127

128 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 128

129 How to Balance the Accrual Reconciliation Report Only picks up transactions available to the general ledger Create Accounting Final mode has been run Use Subledger Accounting or G/L reports to reconcile Subledger Accounting Journal Entries Report Account Analysis Reports General Ledger summary and journal line reports Or use original accounting distribution reports Material Distribution Summary Report Receiving Account Distribution Report Payables Account Analysis Report Slide 129

130 What to Check If the Perpetual Accruals do Not Balance Check for any conversion or upgrade issues Check for manual G/L journal entries Make sure create accounting has been run Slide 130

131 Appendix Periodic vs. Perpetual Accruals Accrual Setups and Accounts Standard Accrual Processes Accrual Write-Offs Reconciling A/P Accruals A/P Accrual Process Issues Slide 131

132 Process Problems for Receiving Why receipts do not equal invoices Wrong receipt quantities (quantity and/or UOM is incorrect) Receiving goods to the wrong PO line or PO Trying to receive or return goods using miscellaneous inventory transactions Routine over receipts with correct invoice quantities Slide 132

133 Process Problems for Payables Why invoices do not equal receipts Incorrect invoice quantities (UOM is wrong, etc.) Payables not processing debit memos correctly Expenses, invoice price or exchange rate variances miscoded Payables matching the invoice to the wrong PO, PO line or PO Release Not matching invoices to POs at all Slide 133

134 Process Problems for Purchasing Why invoices may not be processed correctly Purchase orders prematurely closed or final closed Purged purchase orders Incorrect purchase order unit prices Late or no purchase orders created for the receipt Slide 134

135 Process Problems for Consignment Inventory consignment is a two-step process Backflush consignment components into WIP (Transfer to Regular material transactions) Run the "Create Consumption Advice" program If the Create Consumption Advice program is not run you can t match consignment materials to A/P invoices The Create Consumption Advice program applies the PO Release to the consumption advice (PO_DISTRIBUTION_ID) Slide 135

136 Implementation Issues (Mistakes You Don t Want to Make) Sharing system accounts Badly defined receiving and payables processes Little or no system testing for your accrual processes After go live, late review for the first Accrual Reconciliation Report If upgrading from Release 11i need to run the SLA upgrade against your Release 11i Accrual transactions (RCV, AP, Inventory, etc.) If your company has badly defined and/or badly executed PO Receipt and A/P Invoice Match processes you will have a mess! Slide 136

137 Please Complete Your Session Evaluation Evaluate this session in your COLLABORATE app. Pull up this session and tap "Session Evaluation" to complete the survey. Session ID: Slide 137

138 Q&A