AR COMPLETE MANUAL

AR COMPLETE MANUAL

AR COMPLETE MANUAL

Introduction

The procedures for performing period-end processing in Oracle Receivables Release 11i.

Business Requirements

Oracle Receivables requires periodic internal reconciliation of the transactions entered into the Accounts Receivables system. We want to verify the impact of daily activity on the Aged Trial Balance Report and to confirm amounts posted to the General Ledger.

Oracle Receivables provides a comprehensive set of reports to facilitate reconciliation of outstanding customer balances, transactions, receipts, and accounts balances.

Oracle Receivables provides the functionality to enable reconciliation of your sub-ledger before posting to the general ledger. Posting to the General Ledger allows extraction of details from Oracle Receivables, and creation of journal entries in the General Ledger. After posting to the General Ledger, it is possible to reconcile Oracle Receivables with the general ledger by verifying that all the correct journal entries were made

Steps -- Procedures

The following steps are taken in performing period-end processing for Oracle Receivables:

Complete All Transactions for the Period Being Closed

Ensure that all transactions have been entered for the period being closed.

Completing all transactions for Oracle Receivables:

1.    Complete Invoicing, Credits and Adjustments

2.    Complete Receipts and Reversals

3.    Complete Invoice and Customer Import

4.    Complete LockBox Processing

If you import transactions from an external system or Oracle Projects, ensure you have imported all transactions and master files, and reviewed all audit trails for completeness.

Reconcile Transaction Activity for the Period

Reconcile the transaction activity in Oracle Receivables before posting to the General Ledger. This reconciliation process checks that Oracle Receivables transactions balance with themselves, ensuring that all postable items are reflected on the Sales Journal. Run the following reports for the same accounting period date range:

The Transaction Register

This report details all the transactions (i.e. invoices, debit memos, credit memos, deposits, guarantees, and chargebacks) entered with a GL date between the period start and end dates specified for the period being reconciled. This report shows transactions entered and completed.

The Sales Journal By Customer Report and the Sales Journal By GL Account Report

This report enables review of all transactions for the specified period. The summary totals for the sales journal are by Posting Status, Company, and Transaction Currency. This report details, by account type (i.e. receivables, revenue, freight, tax), the general ledger distributions for posted and/or unposted invoices for the specified period.

The total on the Sales Journal by GL Account should equal the total of postable items listed on the Transaction Register. If any discrepancies are evident, research the customer balances to find out which balance does not tally, using the Sales Journal by Customer report.

By using the following formula, ensure that the Transaction Register matches the Sales Journal:

Transaction Register (Postable Items) + 2 * Credit Memo Total = Sales Journal (Debits plus Credits)

e.g. $100 + (2 * $20) = Debits $120 + Credits $20

($120 Debits - $20 Credits)

Attention: The Transaction Register total for any credits must be adjusted as they are negative on the Transaction Register and positive on the Sales Journal.

Attention: Ensure that the monthly transaction total is accurate and that no distribution issues exist.

Reconcile Outstanding Customer Balances

Reconcile the outstanding customer balances at the beginning of a specified period with the ending balance for the same period, using the following formula, known as the RollForward Formula:

Period-End Balance = Outstanding Balance at Start of Period + Transactions + Adjustments - Invoice Exceptions - Applied Receipts - Unapplied Receipts

The following table represents the various components that affect a customer’s balance and the reports which can be run and reviewed to reconcile these components:

Reconcile Outstanding Customer Balances:

1.    Beginning Balance - Aged Trial Balance (As of the first day of the accounting period)

2.    Transactions - Transaction Register

3.    Adjustments - Adjustment Register

4.    Invoice Exceptions - Invoice Exceptions Report

5.    Applied Receipts -Applied Receipts Register (Identify payments received from customers)

6.    Unapplied Receipts - Unapplied Receipts Register (Identify payments received from customers)

7.    Ending Balance - Aged Trial Balance (As of the last day of the accounting period)

Attention: You can use the Invoice Exceptions Report to adjust the Transaction Register for any transactions which are not open to Receivables and therefore do not show up in the agings.

Review the Unapplied Receipts Register

Use the Unapplied Receipts Register to review detailed information about your customers on-account and unapplied payments for the date range that you specify. You can use this report to determine how much your customer owes after taking into account all on-account and unapplied amounts. Receivables displays information about your on-account or unapplied payment such as GL date, batch source, batch name, payment method, payment number, payment date, on-account amount, and unapplied amount. This report includes both cash and miscellaneous receipts.

If any of the Receipts listed can now be applied to outstanding transactions, then perform this action by re-querying the receipts and following the normal application procedure.

Reconcile Receipts

Ensure that Oracle Receivables receipts balance with themselves by running the following reports:

Receipts Journal Report

This report displays details of receipts that appear in the Journal Entry Report. The Journal Entry Report shows the receipt numbers that contribute to a particular GL account. Using the receipt number, you can review the detailed information on the Receipts Journal Report.

Receipt Register

Use this report to review a list of receipts for a specified date range.

The total of the Receipts Journal Report should equal the total of all the receipts in the Receipt Register for the same GL date range. Both reports display invoice related receipts and miscellaneous receipts.

Reconcile Receipts to Bank Statement Activity for the Period

(Refer to Chapter 8 Period-End Procedures for Oracle Cash Management)

Attention: The General Ledger transfer process must be re-run for any miscellaneous accounting entries generated from the bank reconciliation, for transfer to the General Ledger.

Post to the General Ledger

Prior to posting to the general ledger from Oracle Receivables, the Receipts Journal Report and Sales Journal display the transactions that would be posted to the General Ledger (providing the posting process was run for the same GL date range). After internally reconciling the transactions and receipts using these two reports, it is possible to perform external reconciliation during and after the posting process.

The posting process for Oracle Receivables involves two steps:

General Ledger Transfer

The general ledger transfer process transfers transaction and receipt data to Oracle General Ledger’s interface table.

Journal Import

This process follows the General Ledger Transfer. This process can be initiated from Oracle Receivables, or from Oracle General Ledger. The process creates unposted journals in Oracle General Ledger. A separate posting process (The GL Post) is then run in Oracle General Ledger, to create posted journal entries. Oracle Receivables provides reporting tools to enable tracking and reconciliation of the entire posting process.

Reconcile the General Ledger Transfer Process

Compare the GL Transfer process execution report, that details the total debits and credits transferred, with the sales and receipt journals totals and check that they match. Ensure that the date ranges for the reports and the GL Transfer are identical.

Oracle Receivables will generate the Unposted Items Report if there are any transactions or receipts that could not be transferred to the general ledger interface table. If this is the case, the total un-transferred items must be considered when reconciling the sales and receipts journals with the general ledger transfer execution report.

Once transactions and receipts have been transferred to the GL interface table, Oracle Receivables regards these items as having been ‘posted’ within the sub-ledger. Account balances for transactions and receipts can be reconciled by generating the Sales Journal by GL Account Report, the Receipts Journal Report (in ‘transaction’ mode) and the Journal Entries Report for posted items. The account totals in the Sales and Receipt journals should match the corresponding account balances in the Journal Entries Report.

Attention: The ‘Detail by Account’ version of the Journal Entries Report may be the most useful for reconciliation in this case.

Reconcile the Journal Import Process

Journal Import produces an execution report detailing the total debits and credits for the journals created by the import process. These totals match the totals on the GL transfer execution report.

Run the Publish Journals-General Report with a Posting Status of Unposted from Oracle General Ledger to view the journals created. The grand totals on this report match the Journal Import Execution Report.

Print Invoices

Once you are satisfied that customer balances are reconciled, ensure all the invoices generated during the month have been printed and issued.

If consolidated invoice functionality is used, then ensure that the consolidated invoices have been generated for the current period.

Print Statements (Optional)

Once you are satisfied that the customer balances are reconciled and the business procedure is to generate and issue Statements. Initiate the printing of all monthly (periodic) cycle statements.

Print Dunning (Reminder) Letters (Optional)

Once you are satisfied that the customer balances are reconciled, and the business procedure is to generate and issue Dunning or Reminder Letters. Initiate the printing of all dunning letters/sets.

Close the Current Oracle Receivables Period

Close the current period in Oracle Receivables using the Open/Close Accounting Periods window.

Reconcile Posted Journal Entries

After running the GL posting process in Oracle General Ledger, run the Publish Journals-General Report with a Posting Status of Posted from the Oracle General Ledger, and verify that the grand totals from this report match the Journal Import Execution Report.

Review the Unposted Items Report

Receivables prints the Unposted Items Report for all items that are not posted for the specified GL date range. There are two ways to generate this report: through the Submit Requests window or by running the General Ledger Interface Program. If you submit this report through the Submit Requests window, the output will consist of all unposted items for the specified GL date range.

The General Ledger Interface Program automatically generates this report if there are items that you attempt to transfer to your general ledger that are out of balance. In this case, Receivables prints a reminder on the Posting Execution Report to check your log file for out of balance items.

Using the Submit Requests window to generate this report, submit with a GL date range for at least the current financial year. This report should not generate any output if all Receivables transactions have been successfully posted to General Ledger.

If there are any unposted items for the current or prior periods, then re-open both appropriate Receivables and General Ledger Periods and initiate another posting.

Open the Next Oracle Receivables Period

Open the next period in the Oracle Receivables using the Open/Close Accounting Periods window.

Run Reports for Tax Reporting Purposes (Optional)

A variety of standard reports can be used to provide tax information which is required to be reported to the relevant Tax Authority, including withholding tax.

The Financial Tax Register can be used to view the output from the Tax Reporting Ledger using Reports Exchange and Application Desktop Integrator (ADI). Using these products you can change the layout of the report, publish the report in different formats, and export the data to a tab delimited or HTML file.

The Tax Reporting Ledger consists of accounting information created in Oracle Receivables, Oracle Payables, and Oracle General Ledger. The Financial Tax Register uses this data to generate Tax Register reports using the Rxi reporting tool.

The following tax registers are available:

§  Tax Register

§  Interim Tax Register

§  Nonrecoverable Tax Register

The following summary levels are available within each Tax Register:

§  Transaction Header

§  Transaction Line

§  Accounting Line

Run Archive and Purge Programs (Optional)

The Archive and Purge cycle is divided into four separate processes, Selection and Validation, Archive, Purge, and optionally Copying to a file. The Selection and Validation and Archive processes form the Archive-Preview program. This program selects eligible transaction using criteria you specified, validates the data to identify the transaction chains, then stores this information in the archive tables. The Purge program uses the information in the archive tables to delete eligible transactions from the database tables. Alternatively, you can run selection and validation, archive, and purge processes together using the Archive and Purge program. The final process is to transfer the archive data to a separate storage medium.

Warning: You should not use the Receivables Archive and Purge program if you are using cash basis accounting.