How to efficiently handle the period-close process in Oracle EBS R12
will learn the details for the importance of period and year-end close, recommended sequence of sub-ledgers close, insights, and guidance on period-end procedures. This article provides guidance on the period-end close procedures across Financials, Manufacturing, Procurement, Projects, and Inventory. This paper will examine the critical components, issues, and best practices on period-close.
To understand the importance of the period-close process
To understand that in Oracle EBS R12,
period close is possible only
at the ledger level and not at the operating unit.
To learn that in Oracle EBS R12, inventory period close is possible
by either at individual or multiple inventory organization level.
To understand the recommended sequence of sub-ledgers close
and dependencies.
To understand the importance of the year-end close process.
To examine the critical components, issues, and best practices of
the period-close.
Document Notes
This document is written for all cases whether Oracle EBS R12 is implemented for a
single operating unit under one ledger or multiple operating units under a single
ledger or single/multiple operating units under multiple ledgers.
This article provides the details for the recommended sequence of sub-ledgers close, insights of the closing process, and guidance on period-end procedures.
It is not the intention of this paper to provide complete details including all the
detailed steps for each sub-ledger application close and GL Close, and instead, this
paper will examine the importance, sequence, critical components, issues, and best
practices of the period-close.
This article examines and will include Oracle Lease and Finance Management, Oracle
Cash Management, Oracle Treasury, Oracle Payables, Oracle Purchasing, Oracle
Order Management, Oracle Receivables, Oracle Assets, Oracle Projects, Oracle Cost
Management, Oracle WIP, Oracle Inventory, and Oracle General Ledger as part of
period-close.
This document intends to provide a reference for the planning period-end close process
for ‘real-life’ implementations.
Importance of Period-Close Process
Every Oracle EBS customer needs to successfully close their ledgers each period.
However, often this process becomes complex and difficult to handle, and therefore
proper understanding and streamlining this process to have an effective period close becomes very critical.
Closing is the process of completion of transaction processing and accounting for
all transactions at the end of each period so all accounting information is transferred
to General Ledger.
Sub ledgers cannot be closed if the required transactions in that period are not
processed, accounted for, and transferred. Sub ledgers are E-Business Applications that
transfer accounting records to General Ledger - for example, Payables,
Receivables, Purchasing, Inventory, etc.
By period-close, we ensure that all transactions are accounted for and accounting
information is transferred to General Ledger. If we don’t do the period-close then we
are not using and/or missing the available system functionality to confirm all
sub-ledger transactions are accounted for and transferred to General Ledger.
If we don’t close the sub-ledger period then-new transactions can be affected in past
periods and this will invalidate the already accounted and reported results in
General Ledger.
Although this document particularly refers to ‘Period-End Close Procedures’,
many of these procedures or processes within each application can be
performed more regularly throughout the accounting period as required. Each
application provides its own control as to when and how often data is
transferred from the application to General Ledger.
Is period-close is mandatory for all Oracle Sub-ledgers and General Ledger?
Technically period-close is not a mandatory task.
By period-close, we ensure required controls are in place and met, and once a
period is the closed system will not allow any new transactions. This ensures only
transactions and journals for the period are processed, recorded, and reported.
The key is that once results are reported then transactions and accounting need to
be frozen for that period, and this can be better achieved through the period-close
process.
Importance of Period-Close Process
What would be the disadvantages and/or inefficiencies if the ‘inventory periods
are not closed’?
The control of disallowing the transactions for the prior period is taken out, and this will
cause issues in reconciliation issues between Oracle General Ledger and Oracle
Inventory.
This will allow the unprocessed and invalid transactions to stay, and this will
accumulate over a period of time and at one point the issue may become as
extreme and uncontrollable.
We will not able to confidently report on inventory transactions and accounting.
When a change to an existing transaction or new transaction is effected in a prior
period and transferred to Oracle General Ledger this will invalidate the
reconciliation performed between Oracle Inventory and published General Ledger
results, and this is critically an inefficient way to manage to account. Any changes
must be handled through the current period so that this is not disturbing the prior
period's accounting.
Period-Close Process: Secondary Ledger and Reporting Currency Ledger
If you run Create Accounting program, it will post data in Primary Ledger as well
as in Secondary Ledger (sub-ledger or journal-level) and Reporting Currency
Ledger (sub-ledger or journal-level)
If Secondary Ledgers are used then period-close for the Secondary Ledger
should be taken place after the period-close of primary-ledger. The same is
applicable to Reporting-Currency Ledgers. This means, as far as closing is
concerned, you need to close primary, secondary, and reporting ledgers
separately.
If you close Secondary Ledger first and then either allow transaction processing
in the Primary Ledger and/or directly enter journals and post in Primary Ledger
this will lead to an error (Error31 - Unopened Secondary Ledger Period).
If a period is reopened in the Primary ledger while the same period in the Secondary
Ledger is closed, this will again lead to an error (Error31 - Unopened Secondary
Ledger Period).
Subledger Accounting Close Process
Following are the general guidelines to perform the period-close
process for every sub-ledger:
1. Complete transactions
2. Create accounting
3. Reconcile transactions
4. Post to General Ledger
5. Reconcile accounting
6. Close period
The important thing to note, is that accounting is not the accounting
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 GL, in order to update the accounting
balances correctly.
Overview of Oracle EBS Accounting
In Oracle EBS R12,
Distributions on transactions in sub-ledgers are
considered to be the default accounting and therefore should not be
used for reconciliation purposes. The reason is that SLA 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.
Sub Ledger Accounting –
Process Change
Differences between R11i and R12
A Sub Ledger Accounting – Process Change
The subledger accounting journal represents your real accounting
and the balancing lines are created as part of these subledger
accounting journals. The journals can then be posted to the general
ledger to update the GL balances.
A period-close for a subledger for a period essentially means that the
subledger accounting for that subledger is closed for the selected
period.
Subledger Accounting – Reconciliation
•
In Oracle EBS R12, there is no reason to reconcile distributions on
transactions to the GL, and this is because the accounting
reconciliation should be between SLA Data and GL Data and not
between transaction data and GL Data. 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 main 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.
How to efficiently handle the period-close process in Oracle
EBS R12 - a critical study
Oracle EBS R12 Period-Close is at Ledger Level
Period-Close is at Ledger Level
• In Oracle EBS R12, period close is possible only at the ledger level and as such
period-close works at all the ledger associated operating units and not at the
individual Operating Unit (OU) for applications based at OU.
• If a Ledger is associated with more than one Operating Unit then all Operating
Units under this Ledger must be completed for period-close activities and
therefore must be ready to close the Ledger at the same time.
• All of the operating units that share a ledger also share the same period status.
When you update the period statuses to ‘Open’ in one operating unit, that
period is opened for all operating units within the ledger.
• There is an enhancement for this (Bug 7154359 – Close periods for OU of same
Ledger separately) and is under review by-product management and it is still at
pending or work-in-progress stage as of writing this document.
• General Ledger Period Close for multiple ledgers can be performed
simultaneously by using a Ledger Set.
Period-Close: Possible Cases
Case Ledger Operating Unit Subledger Period-Close Process
1 Single Single OU Ledger level, for single Ledger
2 Single Multiple OU Ledger level, for single Ledger
3 Multiple Single OU per
Ledger
Ledger level, for each Ledger
4 Multiple Multiple OU per
Ledger
Ledger level, for each Ledger
Period-Close: Possible Cases
When a single ledger with a single operating unit is in place, period-close will
only need to be performed for that ledger.
When a single ledger with multiple operating units is in place, period-close
will need to be performed for only that ledger.
When multiple ledgers with a single operating unit per ledger is in place,
period-close will need to be performed for each ledger.
When multiple ledgers with multiple operating units per ledger are in
place, period-close will need to be performed for each ledger.
Subledger Period Close Exceptions Report can be run for multiple ledgers
by using Ledger Set for any sub-ledger. This report is also called by the
Period Close Validation Program to extract all those events which are either
not transferred or are not accounted for.
General Ledger ‘Open Period’ and ‘Periods - Close Period’ programs can be
run for multiple ledgers in a single run by using a Ledger Set.
How to efficiently handle the period-close process in Oracle
EBS R12 - a critical study
In R12, inventory period close is possible by either
at individual or multiple inventory organization
Close Inventory Period:
Closing Multiple Inventory Organizations
Use the Close Period Control program to close a period across
multiple inventory organizations based on a pre-defined organization
hierarchy and by selecting a starting organization. This program will
close the inventory period for the selected starting inventory
organization and all the inventory organizations below it.
Prerequisite:
Set up a valid Organization Hierarchy in Oracle HRMS that includes
all required inventory organizations which need to be part of Close Inventory Period:
Closing Multiple Inventory Organizations
o Run Close Period Control programs
Parameters:
• Organization Hierarchy: Enter a valid organization hierarchy
name from the list of values. You can choose any organization
hierarchy where all organizations subordinate to the hierarchy
origin share the same item master, calendar, and chart of
accounts.
• Starting Organization: Enter a hierarchy origin (Organization) to
execute the program. This starting organization may or may not
have subordinate organizations.
• Close Period From: Enter the list of the valid period(s) to close, and
this will be your current inventory period.
• Request Count: Enter the number of requests to actively run at
one time.
Close Inventory Period:
Closing Multiple Inventory Organizations
Using this functionality will avoid the need to open and close multiple
inventory organizations one by one, and is a very efficient way to
manage the inventory periods.
To achieve this, an enterprise needs to decide on a single hierarchy or
required number of hierarchies and a starting inventory organization
for each hierarchy. As an example, hierarchy can be:
• At the enterprise level
• Based on each primary ledger e.g.
One for US Ledger, one for Canada
Ledger etc.
• Based on each LE or OU.
• Based on selected inventory organizations under a Ledger, LE or OU
Closing Multiple Inventory Organizations Example: Inventory Org Hierarchy
1
IO-100
IO-110
IO-111
IO-120
IO-121
IO-121
IO-130 IO-140
IO-141
IO-142
Closing Multiple Inventory Organizations
Example: Inventory Org Hierarchy 1
o In the above hierarchy, if the Inventory Organization IO-100 is
selected as the origin or starting organization during the Close Period
Control program run the it will close all the subordinate organizations
below it. This means all IO-100, IO-110, IO-111, IO-120, IO-121, IO122, IO-130, IO-140, IO-141, and IO-142 will be closed.
o If the Inventory Organization IO-110 is selected as the starting
organization during the Close Period Control program run it will close
all the subordinate organizations below it. This means IO-110 and IO111 will be closed.
o If the Inventory Organization IO-130 is selected as the starting
organization during the Close Period Control program run it will close
IO-130 only.
Here, all organizations subordinate to the hierarchy origin must
share the same item master, calendar, and chart of accounts.
Open Inventory Period: Opening Multiple Inventory Organizations
Use the Open Period Control program to open a period across multiple inventory
organizations. This program works the same as the Close Period Control program
o Prerequisite:
Set up a valid Organization Hierarchy in Oracle HRMS that includes all required
inventory organizations which need to be part of. You can use the same hierarchy
that will be used for the Closed Period Control program or use a new hierarchy.
Run Open Period Control program
Parameters:
Organization Hierarchy: Same as the one used for Close Period Control
program.
• Hierarchy Origin (Starting Organization): Enter a hierarchy origin (Organization)
to execute the program. This starting organization may or may not have
subordinate organizations.
• Number of Periods to Open: Enter the number of periods to open. You can
open the next periods and additional periods for the hierarchy origin
organization, and its subordinate organizations in the organization hierarchy. To
open periods, they must have a Future status.
How to efficiently handle the period-close process in Oracle
EBS R12 - a critical study
Recommended sequence of sub-ledgers close and
dependencies
Period-Close Dependencies: The following are some considerations and dependencies for an effective period close process:
1. Many period-close processes within each sub-ledger can take place in
parallel with other sub-ledgers. For sub-ledger period-close steps and
details please refer to the Oracle White Paper ‘Period-End Procedures’
2. Certain steps need to wait for the related sub-ledger period-close, and it is
important to understand this fact.
Example: As part of PO Close, Accrual
Reconciliation should happen before PO Period-Close but only after AP
Period-Close.
3. In Release 12, Cost Management becomes an application module holding
Inventory, Receiving, and WIP accounting entries. Therefore accounting
in Cost Management must be completed and transferred to Oracle
General Ledger for these Manufacturing and Procurement Applications.
Period-Close Module Dependencies
Oracle Payables AP
Oracle Receivables AR
Oracle Projects PA
Oracle Order Management & Shipping OM, WSH Oracle Cash Management CE
Oracle Assets FA
Oracle Inventory INV
Oracle Purchasing PO
Oracle Treasury XTR
Oracle General Ledger GL
Oracle Lease and Finance Management OKL
Period Close Module Dependencies
Oracle Cost Management CST
Oracle Work In Process WIP
Period-Close Dependencies:
The following are some restrictions and dependencies on period-close process:
1. Oracle Payables need to be closed before Oracle Purchasing is closed to
account for purchasing accruals at period end.
2. Oracle Payables need to be closed before Oracle Inventory and Oracle
Assets.
3. Oracle Cash Management activities need to be processed and completed
before Oracle Receivables, as bank reconciliation in Cash Management
will create miscellaneous receipts in Oracle Receivables and so forth.
4. Oracle Assets can't be closed before Oracle Payables. This will result in
assets not imported from AP in the correct period.
5. Oracle Receivables shouldn’t be closed its period until all Oracle Projects
invoices have been interfaced to it.
6. Before closing accounting periods in Oracle Inventory, Oracle Receivables
and Oracle Payables, must process all outstanding intercompany
shipments including, but not limited to, posting to Oracle General Ledger
7. Finally, you close all of your sub-ledgers before you close General Ledger.
Period-Close Sequence:
The period-close procedures can vary between the industries and companies, and
however, the major processes and the period close sequence will remain the same. It
is beneficial to follow the closing process sequence recommended by Oracle. The
following is the recommended period-close sequence for procedures and close:
1. Oracle Finance and Lease Management
2. Oracle Order Management & Shipping
3. Oracle Cash Management
4. Oracle Treasury
5. Oracle Payables
6. Oracle Receivables
7. Oracle Purchasing
8. Oracle Inventory, Oracle Costing, Oracle WIP
9. Oracle Projects
10. Oracle Assets
11. Oracle General Ledger
Note: Oracle Order Management, Shipping & Execution, Cash Management, Treasury,
Work In Process, and Cost Management applications don’t have their own period.
Period-Close Sequence:
1. Oracle Lease and Finance Management OKL
2. Oracle Order Management & Shipping OM, WSH
3. Oracle Cash Management CE
4. Oracle Treasury XTR
5. Oracle Payables AP
6. Oracle Receivables AR
7. Oracle Purchasing PO
8. Oracle Inventory INV
9. Oracle Projects PA
10. Oracle Assets FA
11. Oracle General Ledger GL
NOTE
Oracle Cost Management CST
Oracle Work In Process WIP
Note: OM, WSH, CE, XTR, WIP, and CST Applications do not have their own period, and only their related period-close activities need to be performed for these applications. A
Importance of Year-End Close Process
• Many organizations follow specific procedures to generate special journal
entries to close and open fiscal years. These closing entries apply to both the
income statement and balance sheet. Auditable closing procedures vary
considerably, depending on the country’s reporting requirements, generally
accepted accounting practices in a country, and the organization’s business needs.
• The year-end close process is a mandatory requirement in some countries and is used to meet their audit requirements.
Oracle General Ledger is equipped to create actual closing journals for year-end
and other periods. Oracle has provided two programs to accommodate the
year-end-close process, and you can optionally run one or both of these closing
processes, and are:
• Create Income Statement Closing Journals
• Create Balance Sheet Closing Journals
Importance of Year-End Close Process
Create Income Statement Closing Journals process systematically creates a journal
entry that shows the revenue and expense account balances moved to the retained
earnings account.
Create Balance Sheet Closing Journals process systematically creates a journal entry
that closes the balance sheet account balances to zero.
You can only close actual journals, and you cannot close budget or
encumbrance balances.
If your organization has multiple legal entities, you can create closing journals
for multiple ledgers simultaneously with ledger sets. You also have added
security through data access sets because you can only run the closing journals
programs against ledgers you have full read and write access to through your
data access set.
Importance of Year-End Close Process
To process year-end closing journals:
Set up the last day of your fiscal year as an adjusting period.
Set up the first day of your next fiscal year as an adjusting period.
Ensure that the adjusting period is open.
Complete your routine accounting before the last day of the fiscal
year.
Complete and post your adjustments and closing entries in the
last adjusting period of the fiscal year.
Print your general ledger trial balance and other month-end
and/or year-end reports.
Define your ledger set if you plan to submit the closing journals
programs for multiple ledgers simultaneously.
In the last adjusting period of the fiscal year you want to close:
• Run the Create Income Statement Closing Journals process to transfer income
statement year-end account balances of your revenue and expense accounts
to the retained earnings account.
• Run the Create Balance Sheet Closing Journals process to close and zero out
the year-to-date balances of all balance sheet accounts: assets, liabilities, and
owner's equity.
In the first adjusting period of your new fiscal year:
• Run the Open Period program to open the first period of the new year.
• Reverse and post the balance sheet closing journals to reopen those balances.
How to efficiently handle the period-close process in Oracle
EBS R12 - a critical study
Create Income Statement Closing Journals
Year-End Process: Income Statement Closing Journals
1. General Ledger provides two options for the Income Statement
Closing Journals:
a. Option 1
: Income Statement Close Mode
• You can choose to zero out each income statement account and post
the balance to the retained earnings account.
• When you run the process, and enter Closing Account in the
Parameters window, entries are posted against each revenue and
expense account in the account range processed. It is the reciprocal of
the account's YTD balance and zeroes out each account.
• The amount posted to the retained earnings account is effectively the
net sum of the revenue and expense accounts' YTD balances
.
b. Option
2: Income Statement Offset Mode
• Alternatively, you can post the reciprocal of the net income balance to
an income statement offset account instead of zeroing out each
revenue and expense account.
When you run the process, and enter Closing Account and Income Offset
Account in the Parameters window, The revenue and expense accounts
included in the specified account range will not be zeroed out. Instead, the
program will take the net sum of the revenue and expense accounts. This sum
includes the balance in the income statement offset account. It will then post
the reciprocal of the net sum to the income offset account, in the appropriate
debit (DR) or credit (CR) column..
The amount posted to the retained earnings account will be the reciprocal of
the amount posted to the income offset account. This retained earnings
amount will then also be equal to the net sum of the revenue and expense
accounts processed.
Note: For both options, STAT balances will not be processed by the program.
Running the Create Income Statement Closing Journals Program:
1. Ensure that the adjusting period you are closing is an open period.
2. Post all revenue and expense adjustment entries to the appropriate periods.
3. Print General Ledger accounting and analysis reports.
4. If you have accounts you want to process that are disabled then temporarily reenable the account to post the generated closing journal. The Segment Value
Inheritance program can be used to re-enable and then disable these accounts.
5. Run the close process, Create Income Statement Journals in the adjusting period
you want to close for your ledger or ledger set. The parameters are a. Ledger/Ledger Set
b. Period:
c. Account From
d. Account To
e. Closing Account
f. Income Offset Account (optional)
6. Post the Income Statement closing journals to update year-to-date actual balances
or period to date actual balances. If you chose the Income Statement Offset
option, proceed to your next open period.
7. If any adjustments for your ledger are required after its income
statement closing journals are posted, reverse and post the original
closing entries, make your adjustments, then rerun the closing process.
8. Run the Open Period program to open the first period of the new fiscal
year. This program closes out all revenue and expense accounts to the
Retained Earnings account. However, because posting of the closing
journals has already zeroed out the revenue and expense accounts to the
Retained Earnings account, there are no balances to transfer and no
further effect on Retained Earnings.
9. If revenue and expense adjustments need to be made after opening the
new fiscal year for your ledger, for accuracy, you must reverse the closing
journals, post, enter your adjustments, run the Create Income Statement
Closing Journals, and post for your ledger. Y
. Income Statement Closing Journal Attributes:
a. General Ledger automatically creates a separate journal batch for each
ledger in a ledger set if the closing program is submitted for that ledger
set.
b. The effective date of your closing journal entries is the last day of the
period you specify in the parameters window, typically the adjusting
period on the last day of your fiscal year.
c. The closing journals you generate are marked for reversal in the same
period the journals were generated.
d. General Ledger closes the ledger currency and entered currency balances
with different journal entries within a ledger's journal batch.
How to efficiently handle
period-close process in Oracle
EBS R12 - a critical study
Create Balance Sheet Closing Journals
Year-End Process:
Create Balance Sheet
Closing Journals
1. The Create Balance Sheet Closing Journals process:
Generates journals that reverse the debits and credits of the ending year-to-date actual
balances for the period or year that you have selected to close.
• Transfers the balance, which is the net of the reversed asset, liability, and equity accounts, to
the closing account that you specify. Note: Your balance sheet should be balanced if you
completed the Close Process: Create Income Statement Closing Journals to update the retained
earnings account. If the range of balance sheet accounts is balanced, then there is no transfer
of balances.
• Must be run in an open period. The recommended period is the last period of the fiscal year
being closed, which should be an adjusting period.
• To be run in an adjusting period to avoid large balance fluctuations in standard accounting
periods.
2. Running the Create Balance Sheet Closing Journal program:
1. Set up the last day of your fiscal year as an adjusting period.
2. Set up the first day of your next fiscal year as an adjusting period.
3. Ensure that the adjusting period you are closing is an open period.
4. Complete your routine accounting before the last day of the year.
5. Complete and post all adjustment entries related to the period or year you are closing.
6. Print your trial balance, account analysis and other month-end and/or year-end reports.
7. Run the close process, Create Balance Sheet Closing Journals in the adjusting
period you want to close for your ledger or ledger set. The parameters are:
a. Ledger/Ledger Set
b. Period:
c. Account From
d. Account To
e. Closing Account
f. Income Offset Account (optional)
8. Post the Balance Sheet closing journals to zero-out balance sheet account
balances.
If any adjustments for your ledger are required after its Balance Sheet closing
journals are posted, reverse and post the original closing entries, make your
adjustments, then rerun the closing process.
9. In the first adjusting period of the new fiscal year, reverse the balance sheet
closing journals to repopulate the balance sheet accounts.
10. Post the generated reversing journals.
After running the Create Balance Sheet Closing Journal process in the last
day of the fiscal year:
• Open the next fiscal year by running the Open Period program.
• Reverse and post the balance sheet closing journals to repopulate the balance
sheet accounts.
4. To make adjustments after posting the balance sheet closing journals:
• Reverse the original closing entries and post the reversal.
• Make your adjustments.
• Rerun the closing journal processes to capture the additional adjustments.
Balance Sheet Closing Journal Attributes:
a. Closes only actual balance types, and ignores budget and encumbrance balances.
b. Uses the last day of the period that you select in the parameters window as the
effective date of the closing entries and which is the adjusting period.
c. Creates a separate closing account by Primary Balancing segment.
d. Closing journals are marked for reversal in the period following the period the
closing journals were generated.
e. If you use secondary ledgers or reporting currencies, you must define a conversion
rule to prevent replication of your year-end closing journals from your primary
ledger. Replication can cause unbalanced journal entries if different currencies and
conversion rates are used in the ledgers. Instead, run your closing journal
processes directly in your reporting or secondary ledgers to ensure that the
balances are reduced to zero.
How to efficiently handle
period-close process in Oracle
EBS R12 - a critical study
Critical components, issues, and best practices of
the period-close
Critical components, issues, and best practices of the period-close
1. Once a period is closed in Oracle Inventory, it can never be re-opened.
2. Once a period is permanently closed in Oracle Projects or Oracle General Ledger it
can never be re-opened.
3. Use the auto-reversal journal function wherever possible to eliminate manual
interference.
4. Use the control accounts for key customer and supplier accounts to prevent the
manual or ad-hoc journals for these accounts.
5. Do not delete system generated journals at any time, and if required reversed
and post it to have zero effect.
6. Use the Oracle provided standard reconciliation mechanism to reconcile between
Oracle Subledgers and Oracle General Ledger.
7. The Open Account AP Balances Listing replaces the standard R12 Open Balances
Listing Report, and please refer to the My Oracle Support note 604739.1 and
553484.1 for details.
8. The sweeping functionality is now available for Oracle Receivables, and refer the
appropriate note for further detail on Unaccounted Transaction Sweep program.
9. AR to GL Reconciliation Report simplifies the reconciliation process by comparing AR
and GL account balances in a single place. Try to take advantage of this report.
10. Third Party Balances Report can be used to display balance and account activity
information for and Customers and Suppliers.
11. Make sure that transaction tax processing, if applicable, is fully completed and ready for
tax reporting.
12. Limit the number of key accounts used in accrual reconciliation (Expense AP Accrual
Account, Inventory AP Accrual Account, Receiving account, Purchase Price Variance
Account, Invoice Price Variance Account, & Exchange Rate Gain or Loss Account).
13. The AP and PO Accrual Reconciliation Report provides a transactional breakdown of
each accrual account with a net balance not equal to zero. The Accrual Reconciliation
Reports are used to analyze un-invoiced receipts, and to reconcile the balance of the AP
accrual accounts, and use these reports effectively.
14. Use caution when setting up the Accrue Expense Items flag to either Period End or
Accrue At Receipt for Expense Items.
14. Make sure that the Inventory Accrual (Perpetual), Expense Period-End Accrual,
Expense Perpetual Accrual (if used) processes follow the Oracle recommended
procedures to do a systematic accrual reconciliation with least manual
interference.
15. It is strongly recommended that latest patches for the Accrual Reconciliation Load
Run process be applied. See Doc ID 1490578.1 (Updated on 22-NOV-2016) for a
current list of patches to apply and steps to perform to get the latest fixes.
16. If Oracle Order Management is used, for the order-shipments invoiced in Oracle
Receivables, revenue recognition has been processed in Oracle Receivables and
the accounting entries between ‘Deferred COGS account’ and ‘COGS account’
must be generated in INV-CST. For this purpose two concurrent programs must be
run from either Cost Management – SLA or Cost Management responsibility:
• Collect Revenue Recognition information
• Generate COGS Recognition event
17. If it is an upgrade and if the FA Account Generator Workflow was customized in
11i, and after upgrade the customizations will either have to be re-implemented
using SLA or ‘FA: Use Workflow Account Generation should be set as Yes’. In the
second case workflow will be used to generate accounts.
18. There is no separate program in R12 Oracle Assets to perform the rollback in
(which was the case in 11i). Any changes on a depreciated asset will result in
an automatic rollback. Rollback takes place at Asset Level in Release 12
compared to Asset Book level in Release 11i.
19.As of now, there is no integration between Oracle Treasury and Subledger
Accounting (SLA). Treasury sends the journals directly to GL and not via SLA.
20.Maintain period-end and period-average exchange rates for all foreign
currencies to which you want to translate.
21.If you are using Oracle Financials Accounting Hub to generate accounting for
your 3rd party systems, the accounting journal details will automatically by
stored in the XLA tables, prior to being transferred (in summary or detail) and
imported into Oracle General Ledger.
22.Limit or eliminate the use of suspense account. If suspense accounting is not
allowed, Oracle General Ledger will not automatically post out-of-balance
batches
23. Consolidation can be performed using Global Consolidation System, Financial
Consolidation Hub or Hyperion Financial Management (HFM) depending on
your need. Global Consolidation System is already licensed within Oracle GL,
and is one go place to do the data transfer, revaluation, translation,
elimination, consolidation, and reporting
24. Consider AGIS (Advanced Global Intercompany System) when there is a need for
journal processing between legal entities and ledgers with journal approval, intercompany invoicing, and security in place. AGIS is also fully integrated with
Subledger Accounting (SLA) and support AME supervisory level approval process.
How to efficiently handle
period-close process in Oracle
EBS R12 - a critical study
Period Close Steps
Oracle Lease and Finance Management
Please refer to the Oracle White Paper named ‘Period-End Procedures’
for a detail reference on period-close procedural steps. It is not the
intention of this document to provide the details on procedural steps
for period-close. The following are provided for a cross-reference
only.
Period-Close Related Steps: Oracle Lease and Finance Management
The following are the Oracle Lease and Finance Management period-close
related steps in sequence:
1. Complete booking, rebooking, and contracts processing.
2. Generate and complete all accruals
3. Complete recording of all actual losses and/or make loss provision.
4. Complete and interface the transaction entries to other Oracle Subledgers (Oracle
Receivables, Oracle Payables) and General Ledger.
5. If required, enter manual invoices for ad-hoc billing items
6. Record any required adjustments
7. View Account Balances Report
8. Reconcile the Oracle Lease and Finance Management with Oracle General Ledger.
9. Close the current OLFM Period
10. Open the next OLFM Period
Note: If required, you can re-open the OLFM Period
Period-Close Related Steps: Order Management
The following are the Order Management related steps in sequence:
1. Complete All Transactions for the Period Being Closed
2. Ensure all Interfaces are Completed for the Period (Optional)
3. Review Open Orders and Check the Workflow Status
4. Review Held Orders
5. Review Customer Acceptances (Optional)
6. Review Discounts
7. Review Backorders
8. Review and Correct Order Exceptions
9. Reconcile to Oracle Inventory
10. Create Service Contracts (Optional)
11. Reconcile to Oracle Receivables (Optional)
12. Run Standard Period End Reports
Period-Close Related Steps:Cash Management
The following are the Cash Management related steps in sequence:
1. Complete Daily Cash Management Activities
2. Load Bank Statements
3. Generate Sweep Transactions
4. Create Bank Statement Cash flows
5. Reconcile Bank Statements
6. Create Miscellaneous Transactions
7. Complete Bank Transfers
8. Review Auto-Reconciliation Execution Report
9. Resolve Exceptions on the Auto-Reconciliation Execution Report
10. Run Bank Statement Detail Report
11. Run Transactions Available for Reconciliation Report
12. Resolve Un-reconciled Statement Lines
13. Post to General Ledger
14. Run the GL Reconciliation Report
15. Run the Account Analysis Report for the General Ledger Cash Account
16. Review the Account Analysis Report
17. Correct any Invalid Entries to the General Ledger Cash Account (Optional)
Period-Close Steps:
Oracle Treasury
The following are the Oracle Treasury Period-Close steps in
sequence:
1. Complete Daily Trading Activities
2. Perform Revaluation
3. Generate Accruals and Amortization
4. Generate Journals
5. Transfer Journals to General Ledger
Period-Close Steps: Payables
The following are the AP Period-Close steps in sequence:
1. Complete All Transactions for the Period Being Closed
2. Run the Payables Approval Process for All Invoices
3. Review and Resolve Amounts to Post to the General Ledger
4. Reconcile Payments to Bank Statement Activity for the Period
5. Transfer All Approved Invoices and Payments to the General Ledger
6. Review the Payables to General Ledger Posting process after completion
7. Submit the Unaccounted Transactions Sweep Program
8. Close the Current Oracle Payables Period
9. Accrue Uninvoiced Receipts
10. Reconcile Oracle Payables Activity for the Period
11. Run Mass Additions Transfer to Oracle Assets
12. Open the Next Oracle Payables Period
13. Run Reports for Tax Reporting Purposes (Optional)
14. Run the Key Indicators Report (Optional)
Period-Close Steps: Oracle Receivables
The following are the AR Period-Close steps in sequence:
1. Complete All Transactions for the Period Being Closed
2. Reconcile Transaction Activity for the Period
3. Reconcile Outstanding Customer Balances
4. Review the Unapplied Receipts Register
5. Reconcile Receipts
6. Reconcile Receipts to Bank Statement Activity for the Period
7. Post to the General Ledger
8. Reconcile the General Ledger Transfer Process
9. Reconcile the Journal Import Process
10. Print Invoices
11. Close the Current Oracle Receivables Period
12. Review the Subledger Period Close Exceptions Report
13. Third Party Balances Report
14. Reconcile Posted Journal Entries
15. Review the Unposted Items Report
16. Review Account Analysis Report
17. Open the Next Oracle Receivables Period
18. Run Reports for Tax Reporting Purposes (Optional)
Period-Close Steps: Purchasing
The following are the PO Period-Close steps in sequence:
1 Complete All Transactions for the Period Being Closed
2. Review the Current and Future Commitments (Optional)
3. Review the Outstanding and Overdue Purchase Orders (Optional)
4. Follow Up Receipts - Check With Suppliers
5. Identify and Review Un-invoiced Receipts (Period-End Accruals)
6. Follow Up on Outstanding Invoices
7. Complete the Oracle Payables Period-End Process
8. Run the Receipt Accruals - Period End Process
9. Reconcile Accrual Accounts - Perpetual Accruals
10. Perform Year End Encumbrance Processing (Optional)
11. Close the Current Oracle Purchasing Period
12. Open the Next Oracle Purchasing Period
13. Run Standard Period End Reports (Optional)
Period-Close Steps: Inventory
The following are the Oracle Inventory Period-Close steps in
sequence:
1. Complete All Transactions for the Period Being Closed
2. Check Inventory and Work in Process Transaction Interfaces
3. Check and fix pending Transactions
4. Transfer Summary or Detail Transactions
5. Open the Next Inventory Period
6. Close the current Oracle Payables and Oracle Purchasing Periods
7. Close the Current Inventory Period
8. Run Standard Period-End Reports and reconcile the Perpetual Inventory
with GL
9. Validate the Work in Process Inventory
Period-Close Steps: Projects
The following are the PA Period-Close steps in sequence:
1. Change the Current Oracle Projects Period Status from Open to Pending Close
2. Open the Next Oracle Projects Period
3. Complete all Maintenance Activities
4. Run Maintenance Processes
5. Complete All Transactions for the Period Being Closed (Current Period)
6. Run the Cost Distribution Processes
7. Run the Generate Cost Accounting Events Program
8. Interface Cost Transactions to Other Applications
9. Generate Draft Revenue for All Projects
10. Review and Release Revenue for All Projects
11. Run Generation Revenue Accounting Events Process
12. Run Create Accounting to Process Revenue Accounting Events
13. Generate Invoices
14. Transfer Invoices to Oracle Receivables
15. Run Period Close Exceptions and Tieback Reports
16. Run Final Project Costing and Revenue Management Reports
17. Change the Current Oracle Projects Period Status from Pending Close to Closed
18. Advance the PA Reporting Period (Optional)
19. Update Project Summary Amounts
20. Restore Access to User Maintenance Activities
21. Reconcile Cost Distribution Lines with General Ledger (Optional)
22. Permanently Close the Oracle Projects Period (Optional)
Period-Close Steps: Oracle Assets The following are the Oracle Assets Period-Close steps in sequence:
1. Complete All Transactions for the Period Being Closed
2. Assign All Assets to Distribution Lines.
3. Run Calculate Gains and Losses (Optional)
4. Run Depreciation
5. Create Accounting
6. Rollback Depreciation
7. Create Deferred Depreciation Journal Entries (Optional)
8. Depreciation Projections (Optional)
9. Review and Post Journal Entries
10. Reconcile Oracle Assets to the General Ledger Using Reports
11. Run Responsibility Reports (Optional)
Period-Close Steps: Oracle General Ledger The following are the Oracle General Ledger Period-Close steps in sequence:
1. Ensure the Next Accounting Period Status is set to Future Entry
2. Complete Oracle Sub-ledger Interfaces to Oracle General Ledger
3. Upload Journals from Web Applications Desktop Integrator to Oracle General
Ledger (Optional)
4. Complete Non-Oracle Sub-ledger Interfaces to Oracle General Ledger
(Optional, only required if you want to post from non-Oracle systems)
5. Generate Reversal Journals (Optional)
6. Generate Recurring Journals (Optional)
7. Generate Mass Allocation Journals (Optional)
8. Review and Verify Journal Details of Unposted Journal Entries
9. Post All Journal Batches
10. Run the Period Close Exceptions Report
11. Run GL Trial Balances and Preliminary Financial Statement Generator Reports
12. Revalue Balances (Optional)
13. Translate Balances (Optional)
14. Consolidate Ledgers (Optional)
15. Reconcile Intercompany (optional)
16. Review and Correct Balances (Perform Reconciliations)
17. Enter Adjustments and Accruals and Post
18. Perform Final Adjustments
19. Close the Current Oracle General Ledger Period
20. Open the Next Oracle General Ledger Period
21. Run Financial Reports for the Closed Period
22. Run Reports for Tax Reporting Purposes (Optional)
23. Perform Encumbrance Year End Procedures ( Optional)
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