Period End Process In General Ledger R12

Period End Process In General Ledger R12:

In Oracle General Ledger, an accounting period is closed after all the accounting transactions have been completed for the period. A closed period can be re-opened (provided it has not been permanently closed), if it is necessary to enter or modify accounting transactions for that period.

For most modules you can view and select one of the following:

* Never Opened - The period has never been used.

* Future Enterable - The period is open to accept transactions from other modules. Usually used where modules are maintained in different periods, and transactions are likely to be posted across modules.

* Open - Period is available for data entry

* Closed - Period is closed for processing, but can re re-opened if required.

* Permanently Closed - No further processing is possible.

Managers have the discretion to immediately close a period to prevent unauthorized processing, but be able to re-open periods for post processing adjustments. The periods can then be permanently closed as required, independent of the period/year end process.

Suggestion: Periods are usually only ‘finally closed’ when all adjustments and reporting requirements for the prior financial year are finalized.

Combined Basis Accounting:

If you have installed combined basis accounting, then the steps detailed below will need to be completed for both your accrual and cash Ledgers. This will mean that you will need to select the responsibility relevant to both Ledgers when completing these tasks. Depending on the Ledger set/Data Access Set attached to a responsibility, these tasks could be performed from a single responsibility. Procedures

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

Ledger.

1. Ensure the Next Accounting Period Status is set to Future Entry

Set the status of the next accounting period to ‘Future Entry’ if it is not already, except at year-end.

At year-end, it is recommended that you complete all period end processing, prior to opening the first period of the new financial year.

2. Complete Oracle Sub-ledger Interfaces to Oracle General Ledger

Journals are created to load accounting information into Oracle General Ledger. Journals are comprised of batch level, journal entry level, and journal entry line level, information. Ensure that the accounting information  from the sub-ledgers (Oracle Payables, Purchasing, Inventory, Order Management, Receivables, Cash Management, Assets, Treasury and Projects) have been transferred to Oracle General Ledger. Run Create Accounting program or the appropriate program (based on previous runs of Create Accounting) to transfer data from subledgers, into Oracle General Ledger. The Create Accounting process of SLA submits Journal Import Process (based on appropriate parameters as discussed in previous sections). This process populates the GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES tables, and is run automatically.

Attention: The journal posting process, run in Oracle General Ledger, updates the GL_BALANCES table.

Journal Import:

* If not automatically completed, review the Journal Import Execution Report to identify which journal entry batches were not successfully imported.

* Delete any error journal entry batches. Determine the source(s) for these error batches, and retrieve the run ID from the Journal Import Execution Report.

* Make the necessary corrections - in the GL_INTERFACE table, via the Correct Journal Import Data window.

* Re-import these corrected journal entry batches from the GL_INTERFACE table. Simply re-enter the source from which journal entry batches are to be imported.

Note: If journal import fails when importing from the sub ledger modules, data will be rolled back to SLA tables, so that there would not be any data left in the GL_INTERFACE table, when the profile option ‘SLA:Disable Journal Import’ is set to ‘No’.

Attention: Leave sufficient time to re-import any journal entries not successfully imported from the feeder systems. Then update and post them.

3. Upload Journals from Web Applications Desktop Integrator (Web ADI) to Oracle General Ledger (Optional)

Journal information can also be imported from spreadsheets into Oracle General Ledger using Web ADI.

4. Complete Non-Oracle Sub-ledger Interfaces to Oracle General Ledger

(Optional: only required if you want to post from non-Oracle systems)

Following the same procedures as for Step 2:

* Ensure that the accounting information from any site specific, non-Oracle subledgers has been transferred to Oracle General Ledger.

* Run the Journal Import process for these sources and ensure the resulting Journal Entries are posted either automatically by AutoPost or manually.

Note: If you are loading accounting journals for 3rd party systems directly to Oracle General Ledger, use the GL_Interface. 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.

5. Generate Reversal Journals (Optional)

Select all the Journals to be reversed. Submit the process to generate the Reversal Journals. This process can be run across ledgers.

6. Generate Recurring Journals (Optional)

Select all the Recurring Journals that require generation for the current period. Submit the process to generate the Recurring Journals. This process can be submitted for foreign currency and for multiple ledgers, provided the access is available.

7. Generate Mass Allocation Journals (Optional)

Select the Mass Allocation Journals that require generation for the current period. Ensure that all entries to the source accounting flexfields used in the MassAllocation Journal definitions are finalized for the current period, prior to generating the journal. Post step-down allocations in the correct order (i.e. perform the calculation and post, for each successive level of allocation entry). This process can be run across ledgers

and across currencies.

8. Review and Verify Journal Details of Unposted Journal Entries

Review any remaining unposted journal entries for the current period. Update journal entries as appropriate.

Attention: Journal entries can be reviewed on-line, or via reports. Reviewing journal entries prior to posting minimizes the number of corrections and changes after posting. Following review of journal entry batches, perform any journal entry updates, including any adjusting entries, before posting.

Standard Journal reports available included:

a) Journal Batch Summary Report

b) Journals - General Report

c) Journals - Entry Report

d) Journals - Line Report

e) Tax Journals Report

f) General Ledger - Entered Currency

g) Journals by Document Number Report (when document sequencing is used)

9. Post All Journal Batches

Post all journal entries for the current period, including reversal, recurring and allocation journals.

Review the results of the post:

* The Posting Execution Report facilitates review of the results of journal entry posting. Oracle General Ledger generates this report every time posting of journal entry batches occurs. This report indicates any errors in journal entries or journal entry lines were discovered during the posting process.

* Run the Journals - General Report with a Posting Status of Error Journals to review error journal entry batches and their journal entries. Update unpostable journal entries. Locate the problems with unpostable journal entry batches using the following information:

a) Control Total

When using a control total, ensure that the debits and credits equal the control total.

b) Period Status

Post Actual batches to open periods.

Post Budget batches to any period in an open budget year.

Post Encumbrance batches to any period up to the last period in the latest open encumbrance year.

c) Batch Status

Oracle General Ledger describes the problems with unpostable batches.

Common reasons for unpostable batches are:

* Control total violations

* Posting to unopened periods

* Unbalanced journal entries

Attention: All errors in the journal entry batches must be fixed, and the corrected journal entries re-submitted for posting. Post updated journal entries.

9a. Run the Period Close Exceptions Report

This is a new step in Release 12. The General Ledger accounting can run the Period Close Exceptions report to double check that there are no outstanding transactions in the subledgers and GL, and ensure a follow-up with relevant colleagues if any exceptions are identified.

10. Run GL Trial Balances and Preliminary Financial Statement Generator Reports (FSGs)

To maintain a consistent audit trail, it is advisable to create a standard period-end accounting report set that can be run at each period end. Custom accounting reports can be created by using the ‘Financial Statement

Generator (FSG)’.

Suggestion: To prevent confusing different versions of accounting reports for a specific accounting period, discard any obsolete versions of your report for that accounting period. Request financial reports such as:

a) Balance Sheets e.g. Detail Trial Balance Report

b) Income Statements

c) Gross Margin Analysis

11. Revalue Balances (Optional)

Revalue account balances to update functional currency equivalents.

12. Translate Balances (Optional)

Define any new currencies to which accounting balances are to be translated. Maintain period-end exchange rates for all foreign currencies to which you want to translate. Maintain average exchange rates for all foreign currencies to which you want to translate. Maintain historical rates or amounts for any owner’s equity accounts to be translated. Translate account balances to any defined currency.

13. Consolidate Ledgers (Optional)

Attention: You can consolidate using Global Consolidation System, Financial Consolidation Hub or the Hyperion Consolidation functionality. Whichever you choose you can run your extract programs to extract the data from General Ledger to the consolidation systems.

* Consolidate within ledgers

a) Enter consolidating journal entries

The following two methods can be used to create eliminating entries for multiple companies using a single Ledger:

Automatic Eliminating Entries - define mapping rules to eliminated intercompany receivables, payables, investments in subsidiaries, intercompany sales etc. Recurring Journals- use formulas

b) Post consolidating journal entries.

c) Define a reporting hierarchy that consolidates all the companies.

d) Define financial statements with the reporting hierarchy.

Suggestion: To automatically generate the amounts and accounts for consolidating and eliminating journal entries, use recurring journal entry formulas.

Suggestion: To produce financial reports that reconcile your consolidating companies with the consolidated totals, enter the consolidating entries to a separate company, and build reports with a separate column for ‘consolidating entries’.

* Example of consolidation across ledgers when sharing same COA and Calendar

(Using Ledger Set and access granted via ‘Data Access Set’):

a) Define consolidated FSG

b) Perform revaluation and translations across ledgers

c) Enter consolidated and eliminating entries

d) Report on FSG by selecting the ledger set option while running

* Example of consolidation across ledgers using the Global Consolidation System

(GCS):

a) Define consolidations.

b) Perform revaluation and translation of foreign subsidiaries as required.

c) Run consolidations.

d) Enter consolidated and eliminating entries.

e) Report on this consolidated ledger using FSG’s.

f) Analyze results using drill-down capability from Parent ledger to Subsidiary

ledger/s.

Attention: All errors in the journal entry batches must be fixed, and the corrected journal entries re-submitted for posting.

13a. Reconcile Intercompany (optional)

Advanced Global Intercompany System in Release 12 provides more advanced features such as automatic generation of intercompany invoices in AP and AR, improved online reconciliation reporting, and is also fully integrated with SLA. A new, online reconciliation report provides drill-down to underlying sources and source journals for easy identification of reconciliation differences.

14. Review and Correct Balances (Perform Reconciliations)

Oracle General Ledger should be reconciled with all other modules. Adjust journals to correct any errors in the journals. Create and post adjusting journals to correct errors in account balances.

* Review Detail Account Balances On-line

* Review Account Balances via Reports

Request accounting reports such as general ledgers, general journals, trial balances, and accounts analysis reports to facilitate reconciliation of Oracle General Ledger with the other Financials and manufacturing modules.

a) General Ledger Reports

General Ledger Reports facilitate tracing back each transaction to the original source. These reports list beginning and ending account balances and all journal entry lines affecting each account balance. The report provides detailed information on each journal entry line including source, category and date.

b) Accounts Analysis Reports

These reports list the accumulated balances of a range of Accounting Flexfields and all journal entries that affect that range. Detailed information is provided for each journal entry line, which includes the source, batch name, and description.

c) Trial Balance Reports

Use trial balance reports to review account balances and activity in summary or detail.

d) Journal Reports

These reports print journal entry batches and include journal entry subtotals, and descriptions and reference information for each journal entry line. You can report on foreign currency, posted, unposted or error journal entries and report on a specific batch or on journal entries from a specific source.

* Journal Reconciliation:

General Ledger Entry Reconciliation lets you reconcile transactions in GL accounts that should balance to zero. With General Ledger Entry Reconciliation, you can selectively cross-reference transactions in GL with each other by entering reconciliation reference information at the journal line level. When the balance for

group of transactions is zero you can mark the transaction as reconciled.

* Clear Suspense Accounts

Examine the General Ledger and account analysis reports to identify the source of entries to the suspense accounts. Determine the adjusting entries required to net these accounts to zero.

Attention: If suspense accounting is not allowed, Oracle General Ledger will not post out-of-balance batches.

* Reconcile Subsidiary Ledgers

Identify differences between subsidiary ledgers and the General Ledger. Determine which differences are errors requiring adjustment to the General Ledger.

* Check other key system accounts have not been transacted by ad-hoc journals, for

example, Creditors Control, Debtors Control, Intercompany accounts, etc.

15. Enter Adjustments and / or Accruals and Post

To correct errors in account balances made by posting incorrect journals, create and post adjusting and reversing journals.

Attention: The details of posted journals cannot be changed, except to mark or unmark for reversal. An incorrectly entered posted journal must be reversed to back-out the accounting of the original posted journal.

Other journal entry adjustments, for example, write-offs (refer Accrual Write-Off Report), and manual accruals can be entered into Oracle General Ledger at this point also.

16. Perform Final Adjustments

Enter and Post any final adjustments as required by the organization.

17. Close the Current Oracle General Ledger Period

Close the current GL accounting period in the Open and Close Periods window. The period can be ‘soft closed’, if later adjustments to the balances for that period may be applicable, or ‘permanently closed’, which means that the period cannot be re-opened in the future.

This step will need to be repeated for each ledger unless a data access set is setup to give access to multiple ledgers. This is controlled by GL: Data Access Set profile option. With a data access set across ledgers programs can be run for multiple ledgers from a single responsibility.

18. Open the Next Oracle General Ledger Period

Open the next General Ledger accounting period in the Open and Close Periods window. This operation can be performed across ledgers provided ‘Data Access Set’ grants access.

Choose status ‘Open’ to open a new accounting period, or to re-open a previously soft closed period to enable adjustments to be made. Generate and post reversal journals that were entered in the prior period. For example any Oracle Purchasing receipted accruals and manual accruals. This step will need to be repeated for each ledger unless a data access set is setup to give access to multiple ledgers. Any Journals entered into this period while it had a status of Future Enterable, can now be posted as the period now has a status of Open. This is controlled by GL: Data Access Set profile option. With a data access set across ledgers programs can be run for multiple ledgers from a single responsibility.

19. Run Financial Reports for the Closed Period

Run a final Trial Balance Report.

Run final Financial Statement Generator Reports (FSG) or Report Sets as required by the organization including Income Statements and Balance Sheets. FSGs can also be published via the Application Desktop Integrator (ADI).

20. 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:

a) Deferred Output Tax Register

b) Recoverable and Non-Recoverable Tax Registers

c) Single Cross Product Tax Register

d) Standard Input and Output Tax Registers

21. Perform Encumbrance Year End Procedures (Optional)

Oracle Financials provides a number of facilities for the processing of outstanding encumbrances as part of year-end processing. The default processing for Oracle Financials at year end is to extinguish any outstanding encumbrances/ unused funds when you close the last period of the Financial Year within the General Ledger application.

The carry forward process enables managers to perform any of the following:

* Carry forward encumbrances for existing transactions (purchases/requisitions).

* Carry forward encumbrances, and the encumbered budget.

* Carry forward the funds available as at the end of the year. Other facilities available:

* Use mass allocations to bring forward part of the funds available.

* Carry forward budgets into the current appropriation budget, or to a separate budget to identify between current year and carry forward amounts if required. Mass budget processing also allows you to combine these budgets. To perform Encumbrance year-end procedures, including Carry Forward, you must complete each of the following steps:

a) Open the next encumbrance year

Use the Open and Close Periods window to open the next encumbrance year.

b) Open the next budget year

Use the Define Budget window to define a budget for the next budget period.

Attention: Ensure that the budget that you use is inclusive of the periods for the next budget year that you require

Attention: Ensure that the calendar periods for the next budget year have

been created prior to running this step. Verify that the next year budget figures have been entered. If you define a new budget for the purposes of the next year budgetary control, you may also need to update the

following:

Define Budget Organizations, where you have attached the funding budget to defined

account ranges within this form.

Define Summary Accounts, where summary templates are used as the basis for the budgetary control procedures.

c) Run Year End Carry Forward

This process enables you to determine the criteria that you want to use for carrying forward your encumbrances

The year-end carry forward is normally completed in two steps:

1) Perform the Year End Carry Forward in Preview mode

2) Perform the Year End Carry Forward without selecting the Preview option

Within the Year End Carry Forward form, you can select a wide range of criteria for carrying forward balances:

* Carry Forward Rule - This rule enables you to select Encumbrances Only,

Encumbrances and the Encumbered Budget, or Funds Available as the basis for the

Carry forward

* Encumbrance Type - Select ‘All’ for all encumbrances, or select the encumbrance

type that you require i.e. Commitment, Obligation etc.

* From/To Budget and Budget Organization- Select the budgets where they are

different

* Accounting Flexfield Ranges - Select the range of relevant accounting flexfields to

be carried forward.