Douglas Volz Douglas Volz Consulting doug@volzconsulting

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60 Inventory Orgs? 6 Ledgers? No Worries, Reconcile Your Inventory With Ease! OAUG NorCal Training Day January 13, 2011. Douglas Volz Douglas Volz Consulting doug@volzconsulting.com. Reconciliation Agenda. Background General Reconciliation Principles Receiving Valuation Accounts - PowerPoint PPT Presentation

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  • 60 Inventory Orgs? 6 Ledgers? No Worries, Reconcile Your Inventory With Ease!

    OAUG NorCal Training DayJanuary 13, 2011Douglas VolzDouglas Volz Consultingdoug@volzconsulting.com

  • Reconciliation AgendaBackground

    General Reconciliation Principles Receiving Valuation Accounts Inventory Valuation Accounts Work In Process Valuation Accounts

    Common Reconciliation Challenges

    Custom Solutions for Multiple Organizations Slide *

  • Summary BackgroundInventory to G/L reconciliation can be difficult

    This presentation includes the standard Oracle techniques

    Plus additional ideas and solutions that exceed standard tools

    Doug has helped Oracle clients with Cost Accounting since 1990

    Doug also leads the OAUG Cost Management SIG

    Slide *

  • Sample Financial Structure to Reconcile Slide *

    Corporate ConsolidatedLedger

    Secondary Ledger

    Primary Ledger

    Legal Entity

    Operating Unit

    Inventory Orgs

    Asia-Pac OUs

    Asia-Pac Dist. Centers

    Corporate Consolidated Ledger(USD)

    USA PL(USD)

    Other LEs

    US OU

    CORP LE

    Other European LEs

    Item Master(ZZZ)

    Switzerland Org

    ORG Korea

    US Dist. Centers

    US LSP Orgs

    Europe Dist. Centers

    Korea OU

    Switzerland(CHE)

    LSPs

    LSPs

    European SLs

    Europe LSP Orgs

    SwitzerlandOU

    Swiss Dist. Center

    Other European OUs

    Korea LE

    Asia-Pac LEs

    Swiss LE

    Korea(KRW)

    Asia-Pac LEs

    Swiss PL (USD)

    European PL(USD)

  • There Has to be an Easier Way !! Slide *

  • General Reconciliation PrinciplesUse the following formula: Prior cum. balance + monthly accounting activity = month-end cumulative G/L balance Also compare above formula to cumulative perpetual report balances If you do not balance, check for manual G/L journal entries and entries from other subledgers Slide *

  • Sample Reconciliation Worksheet Slide *

  • More Reconciliation PrinciplesIgnore minor rounding differences: When the unit cost precision is higher than the currency decimal precision, you may have minor rounding differences between the valuation reports and cumulative accounting totals Release 11i: Watch out for transaction & reporting cut-offs issues Release 12: All Inventory and Receiving Value Reports have an As of Date Slide *

  • How to Balance the Receiving Valuation AccountsUse the Receiving Valuation Reports to get the month-end balances Use the Receiving Account Distribution Report for monthly increases to the Receiving Valuation Account Use the Material Distribution Summary Report for monthly decreases to the Receiving Valuation Account Slide *

  • Receiving Value Report Slide *

  • Receiving Account Distribution Report Slide *

  • How to Balance the Inventory Valuation AccountsUse the Inventory Valuation Reports to get the month-end balances Or, use the Period Close Reconciliation Report You can also use the Transaction Historical Summary Report Transaction Historical Summary Report Standard CostingTransaction Historical Summary Report Average Costing Also use the Period Close Value Summary Report

    And for monthly totals use the Material Distribution Summary Report Slide *

  • Material Account Distribution Summary Slide *

  • All Inventories Value Report Slide *

  • InventoryValue Report Slide *

  • If the Inventory Accounts Do Not BalanceCheck for miscellaneous inventory transactions, where the offset account is the same as the subinventory or organization valuation account

    Use the Material Distribution Inquiry to find these, query for entries that hit your subinventory valuation accounts (Std) or organization valuation accounts (Avg), where the Accounting Line Type is AccountAccount Alias Issue Example10 AccountCR Inventory AccountInventory Acct Line Type10 Inv valuation DR Inventory Account (from the Account Alias) Slide *

  • If the Inventory Accounts Do Not Balance Slide *

  • How to Balance the Intransit Valuation AccountsUse the Intransit Valuation Reports to get the month-end balancesChoose Yes for the option Only Display Inventory You Own Use the Material Distribution Summary Report for monthly totals Slide *

  • Intransit Value Report Slide *

  • How to Balance the WIP Valuation AccountsUse the WIP Valuation Report to get the month-end balances (No cut-off issues)Choose the option to include closed jobs Use the WIP Account Summary and Material Distribution Summary Reports for monthly totals Slide *

  • WIP Value Report Slide *

  • WIP Account Summary Report Slide *

  • R12: Journal Entries Report Cost ManagementProcess Category:InventoryReceiving Slide *

    Work in ProcessManual / Third Party Merge

  • Journal Entries Report Cost Management Slide *

  • Journal Entries Report Cost Management Slide *

  • Journal Entries Report Cost Management Slide *

  • Drill-Down From the General LedgerRelease 11i: The Inventory/WIP GL batch numbers are visible in the G/L, as part of the journal entry batch name Release 11i: You can run the Material and WIP Distribution Reports by this G/L batch number and compare to the General Ledger

    Release 12: You cannot see the organization code or G/L batch number on the G/L journal entry batch name unless you customize your SLA rules Release 12: You can drill down from your G/L to the Subledger Accounting Entries to the material, receiving and WIP transactions Release 12: You can run the Subledger Journal Entries, Account Balances or Account Analysis Reports (with setup required) Slide *

  • Oracle Release 10 to 11i Inventory/WIP Integration to the GLCOLUMN NAME DATA TO INSERT DESTINATION WHERE THE DATA SHOWS UP----------- ------------------------------ ---------------------------- ------------------------------REFERENCE1 GL_BATCH_ID, ORGANIZATION_CODE JE_BATCH NAME Post Journals Form REFERENCE2 Insert GL_BATCH_DATE, ORGANIZATION_CODE, ORG_GL_BATCHES.DESCRIPTION, JE_BATCH DESCRIPTION Post Journals Form REFERENCE3 DO NOT POPULATE Use unknown REFERENCE4 DO NOT POPULATE JE_HEADER NAME Account Analysis Report, Account Inquiry Note: Journal Import will append JE_CATEGORY_NAME, CURRENCY_CODE REFERENCE5 Same as REFERENCE2 JE_HEADER DESCRIPTION Account Inquiry REFERENCE6 DO NOT POPULATE JE_HEADER external_reference REFERENCE7 DO NOT POPULATE Used for JE_HEADER ACCRUAL_REV_FLAG REFERENCE8 DO NOT POPULATE Used for JE_HEADER ACCRUAL_REV_PERIOD_NAME REFERENCE9 DO NOT POPULATE Used for JE_HEADER ACCRUAL_REV_CHANGE_SIGN_FLAG REFERENCE10 Same as REFERENCE2 JE_LINES DESCRIPTION General Ledger Report, Journal Entry Inquiry REFERENCE21 Insert GL_Batch_IDGL_JE_LINES.REFERENCE1 Not Displayed REFERENCE22 Insert ORGANIZATION_CODEGL_JE_LINES.REFERENCE2 Not Displayed REFERENCE23 Insert TRANSACTION_IDGL_JE_LINES.REFERENCE3 Not Displayed Slide *

  • List of Month-End Close ReportsMaterial Distribution Detail/Summary Reports

    WIP Account Detail/Summary Reports

    Receiving Account Distribution Report

    Purchase Price Variance Report

    Invoice Price Variance Report Discrete Job Value

    Repetitive Value Report

    Expense Job Value Report

    Margin Analysis Report Slide *

  • Month-End Close Reports (Contd)Inventory Value Reports

    Elemental Inventory Value Reports

    Intransit Value Report

    Subinventory Account Value Report (disabled in Release 12)

    All Inventories Value Reports

    Receiving Value Report

    Receiving Value by Destination Report (disabled in Release 12 unable to view the perpetual expense balances)

    WIP Value Report

    Period Close Value Summary Report

    Period Close Reconciliation Report (11.5.10 and 12) Slide *

  • Common Reconciliation ChallengesRelease 11i only: report cut-off issues at month-end or running multiple periods at a time

    Account alias or miscellaneous inventory transactions using same accounts

    Disabling a code combination during the month Subledger miscodings

    Manual G/L journal entries

    Back-dated transactions from external system feeds

    Miscoded purchase orders

    Delivering goods to a closed work order

    Slide *

  • Common Reconciliation Challenges (Contd)Sharing System Accounts:Expense and Inventory Accrual AccountsReceiving Valuation AccountsOrganization Level Accounts (Average, FIFO, LIFO Costing)Subinventory Accounts (Standard Costing)Cost Group Accounts (Project Mfg, WMS)WIP Accounting ClassesInventory Account AliasesOrder Types and COGSRelease 12 Subledger Accounting Rules causing you to share accounts

    Release 11i: wrong initial subinventory summary balances Initial legacy GL balances to do not match Oracle perpetual Slide *

  • Slide *R12 Improvements Period Close DiagnosticsForms DrilldownUsing the same Inventory Accounting Periods form you can drilldown to associated forms to view the problem transactions New workflow to notify of failing transactions Period Close Pending Transactions ReportReport the transactions holding up the inventory accounting periodOnly by inventory organization and only by transaction error

  • The following reports can now be run with an As-of Date: Inventory Value Report By SubinventoryInventory Value Repo

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