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Opm Pmac Example

Opm Pmac Example

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10/19/2012

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OPM Actual Costing is NOT the Standard

Keith McCormick, Solution Beacon, LLC

Solution Beacon/NCOUG Harper College, Palatine,IL 15 Aug, 2003 kmccormick@solutionbeacon.com solutionbeacon.com
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© 2003 Solution Beacon, LLC. All Rights Reserved.

Overview
This presentation will discuss implementing actual costing in an OPM environment and the challenges involved with reconciling the inventory account to the change in inventory valuation. Attendees will be presented with functional and technical information regarding month end closing procedures and tips and tricks to overcome reconciliation hurdles. Reconciling the net change in inventory valuation to the value in the inventory account at month end is challenging in an OPM actual costing implementation. There are several steps that have to be performed in order for the information to roll up correctly in the calculation of costs. Furthermore, there are several steps to perform in order to accumulate subledger amounts for period end. If any steps are eliminated or performed out of sequence, the subledger values are incorrect. Additionally, depending on the modules that are implemented, conditions may exist in dependent modules (PO, OM, OPM Manufacturing) that prevent costs from being calculated correctly but that allow inventory levels to be adjusted thereby creating a reconciling mess.
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© 2003 Solution Beacon, LLC. All Rights Reserved.

LLC.Assumptions n n n Using Period Moving Average Cost (PMAC) Implemented Purchasing for Process Inventory instead of OPM Purchase Management Implemented Oracle Order Management instead of OPM Order Fulfillment 3 © 2003 Solution Beacon. All Rights Reserved. .

Complete and close all inventory batches Complete physical inventory. corrections and returns to suppliers Enter AP receipts if synchronizing invoices Ship confirm and update shipping for OM orders Enter resource costs Enter cost burdens Run GL expense allocations Enter actual cost adjustments .Actual Cost Period End Prerequisites n n n n n n n n n 4 © 2003 Solution Beacon. All Rights Reserved. LLC. cycle counts and adjustments Enter all PO receipts.

Actual Cost Period End Process 5 © 2003 Solution Beacon. . All Rights Reserved. LLC.

Acctg Controller > Subledger Update > Actions menu > Test Subsidiary Ledger Update OPM Financials > Mfg. All Rights Reserved.Actual Cost Period End Process n n n Preliminary close the inventory calendar period Run Actual Cost Process OPM Inventory > OPM Inventory Control > Inventory Close OPM Financials > Cost Management > Actual Costs > Actual Cost Process View the actual cost process error messages Run preliminary GL Cost Update OPM Financials > Cost Management > Actual Costs > Actual Cost Process > Actions menu > View Error Messages OPM Financials > Mfg. Acctg Controller > GL Cost Update > Actions menu > View Error Messages OPM Financials > Mfg. . LLC. Acctg Controller > Subledger Update > Actions menu > View Error Messages n n View the Subsidiary Ledger Update error messages 6 © 2003 Solution Beacon. Acctg Controller > GL Cost Update n n View the GL Cost Update error messages Run Subsidiary Ledger Update OPM Financials > Mfg.

All Rights Reserved.) This is where the fun starts Reconcile the net change in inventory value (Current Period – Prior Period) to the inventory account in the Account Distribution report n Run Inventory Valuations reports for current period and prior period Run Account Distribution (Account Summary) report for the Test Subledger OPM Financials > Mfg.Actual Cost Period End Process (cont. . LLC. Acctg Controller > Reports > Detailed Subledger > Actions Menu > Account Distribution > Report on Test Subledger > Report Type Account Summary OPM Inventory > OPM Inventory Control > Reports > Run > Inventory Valuation Report n 7 © 2003 Solution Beacon.

) n n Final close the inventory calendar period Run Actual Cost Process if transaction adjustments were entered View the actual cost process error messages Run final GL Cost Update OPM Inventory > OPM Inventory Control > Inventory Close OPM Financials > Cost Management > Actual Costs > Actual Cost Process n OPM Financials > Cost Management > Actual Costs > Actual Cost Process > Actions menu > View Error Messages OPM Financials > Mfg. LLC. All Rights Reserved.Actual Cost Period End Process (cont. Acctg Controller > GL Cost Update > Actions menu > View Error Messages OPM Financials > Mfg. Acctg Controller > Subledger Update > Actions menu > Subsidiary Ledger Update OPM Financials > Mfg. Acctg Controller > GL Cost Update n n View the GL Cost Update error messages Run Subsidiary Ledger Update OPM Financials > Mfg. Acctg Controller > Subledger Update > Actions menu > View Error Messages © 2003 Solution Beacon. n n View the Subsidiary Ledger Update error messages 8 .

Actual Cost Period End Process (cont.) n Run GL Update OPM Financials > Financial Integration > GL Update n Run Journal Import General Ledger > Journals > Import > Run 9 © 2003 Solution Beacon. . All Rights Reserved. LLC.

All Rights Reserved.Account Mapping Form 10 © 2003 Solution Beacon. . LLC.

. LLC. All Rights Reserved. then the value associated with the other account titles must be backed out.Reconciling Inventory Value The net change in inventory value should reconcile to the accounts associated with the INV account title on the Account Distribution Summary report Current Period Inventory Value – Prior Period Inventory Value = Net Change in Inventory Value this should equal Account Distribution Summary Report (all accounts associated with the INV account title) NOTE: If an account associated with INV is also associated with another account title. 11 © 2003 Solution Beacon.

fiscal_year. l.0)) debit.FROM gmf.co_code . SUBSTR(m.currency_base. gat.inventory AND u.sub_event_code. SUM(DECODE(l.currency_trans © 2003 Solution Beacon.currency_trans.acct_ttl_code.acct_ttl_type = 1500 -.acct_ttl_type.1.AMOUNT_BASE*l.50) account. gsm.currency_base.sub_event_code.acctg_unit_no.acct_ttl_type = gat. gat.acct_ttl_type. m. gsm.1.gl_accu_mst u. gl_acct_ttl gat WHERE l.sub_event_desc.acct_id AND u.debit_credit_sign.l.1.period = 2 AND l.fiscal_year = '2003' AND l. u. gsm.acct_ttl_code. gat.10) acct_unit. All Rights Reserved. l.sub_event_code.AMOUNT_BASE*l.gl_subr_tst l.acct_id = l.acct_ttl_type AND l.acctg_unit_id AND m. gmf.0)) credit SUM(DECODE(l.co_code AND m.acct_ttl_desc.acctg_unit_id = l.doc_type. l. l.debit_credit_sign.sub_event_type GROUP BY l.0)) SUM(DECODE(l.1. l. l.acctg_unit_no. gl_sevt_mst gsm.sub_event_type = gsm.period.acct_ttl_code. gsm.gl_acct_mst m.sub_event_desc. l. SUBSTR(u.sub_event_desc. LLC. gat.l. l.50) l.debit_credit_sign.debit_credit_sign.co_code = l.acct_ttl_desc.sub_event_code.AMOUNT_BASE*l.co_code = 'TFY' AND l.acct_no.acct_no.1. gsm.co_code AND l. gmf. l. gat. 12 .acct_no.debit_credit_sign.l.debit_credit_sign. l.period.-1.debit_credit_sign. SUM(DECODE(l.doc_type.co_code = l.co_code.currency_base. gsm.Summarize Subledger Entries SELECT l. SUBSTR(m. l. l. gsm.fiscal_year.

072.870.919.237.Summarize Subledger Entries (cont.526.43) (196.16) 3.597.603.764.447.52 9.265.75) (348.11 (4.14) 13 © 2003 Solution Beacon.29) (17.52 (196.597.925.068.54) Delta 8.933.687.22) (17.413.650.410.434.27 3.520. LLC.81) (9.22) (3.45 70. All Rights Reserved.933.620.59 13.608.364.764.003.44 Credit (653.256.29) (746.15) (9.925.003.166.703.10) Net Change in Inventory (614.) Inventory transactions from the test subledger Doc Type PROD PROD ADJI CREI TRNI OMSO RECV RECV RECV RTRN XFER SubEvent Code CERT RELE IADJ IADJ INTA OMSP RADJ RCPT VOID RTRN XFER Sub Event Description Batch Certification Batch Release Inventory Adjustments Inventory Adjustments Inventory Movement – Intra Company Order Management Shipments Inventory Receipt Adjustment Inventory Receipts Inventory Receipt Voids Inventory Returns Inventory Transfers Code Combination 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 0070-0000-0000-140100-0000 Debit 9.84) 70.531. .11 (7.658.658.603.39 656.28) (8.304.687.790.15 9.11 17.54 398.59) (4.81) (11.526.434.

trans_qty) total FROM ic_tran_pnd t. c.total) doc_type_total FROM ( SELECT t.item_id AND c.orgn_code.period_code = '0302' GROUP BY t.co_code. t.item_id = t.acctg_cost * sum(t.calendar_code = 'PMAC' AND c. t.acctg_cost )S GROUP BY s.monhh24:mi:ss') AND t. t. cm_whse_asc a WHERE t. t.doc_type. SUM(s.trans_date <= TO_DATE('28-FEB-2003 23:59:59'.co_code.co_code.FEB23:59:59'. LLC.item_id AND c.co_code.'dd.FEB23:59:59'. t. t. c.calendar_code = 'PMAC' AND c.whse_code AND c. t.FEB00:00:00'. c. .'dd-mon-yyyy TO_DATE('01.whse_code = a.trans_date >= TO_DATE('01-FEB-2003 00:00:00'.cost_mthd_code = 'PMAC' AND c.whse_code.'dd-mon-yyyy TO_DATE('28.item_id = t.completed_ind = 1 AND t. c. c.monhh24:mi:ss') AND t. t.acctg_cost * sum(t. gl_item_cst c.monhh24:mi:ss') AND t. c.delete_mark = 0 AND t. t.acctg_cost.'dd-mon-yyyy TO_DATE('01.whse_code. SUM(t.item_id.cost_mthd_code = 'PMAC' AND c.item_id. SUM(s. t.whse_code = a.cost_whse_code AND c. t.item_id. t.doc_type. t. gl_item_cst c. t.whse_code.FEB00:00:00'.doc_type. t.'dd.doc_type.trans_qty) total FROM ic_tran_cmp t.acctg_cost. t.trans_um.'dd-mon-yyyy TO_DATE('28.doc_type Retrieve IC_TRAN_CMP transactional data SELECT s. SUM(t.orgn_code.whse_code = a.doc_type.cost_whse_code AND c.total) doc_total FROM ( SELECT t.trans_qty) total_qty.orgn_code.period_code = '0302' GROUP BY t. t.whse_code AND c. t.trans_um.trans_um.trans_date >= TO_DATE('01-FEB-2003 00:00:00'.doc_type 14 © 2003 Solution Beacon.trans_qty) total_qty.trans_date <= TO_DATE('28-FEB-2003 23:59:59'.acctg_cost )s GROUP BY s.whse_code.'dd. All Rights Reserved.item_id.orgn_code.'dd.monhh24:mi:ss') AND t. t.doc_type.trans_um. t. cm_whse_asc a WHERE t.Summarize Transaction Data Retrieve IC_TRAN_PND transactional data SELECT s.whse_code = a.

10) (4.366.84) 70.490.961.31 3.041.364.753.78 (11.586.036.79) 1.31 Transfers that have been shipped from the source warehouse and not received at the target warehouse In this case.763.056.003.526.003.382.32) - 15 © 2003 Solution Beacon.05) 5. it is because inventory has been transferred from a costed warehouse to an uncosted wareouse ADJI CREI STSI TRNI (350.764.87) Subledger Data (4.997.790.78 (5.11 - (348.35 Description Possibly sales orders that are not ship confirmed or that have not had “Update Shipping” run Open production batches or production batches that are completed and closed in separate periods or formulas with a cost allocation not equal 1 PROD RECV RTRN XFER 1.16) 70. LLC.751.36 3.22) Delta 1.166. All Rights Reserved.469.11 - 2. .382.490.Compare Transactions to Subledger Doc Type OMSO Transaction Data (4.

0310.520.215.024 61.458 003.AUGPage: 2 of 5 Sub Source Event Event Account Desciption -----.-----------------------------IC IADJ IADJ Inventory Inventory Adjustment Expense Inventory Adjustment Expense Inventory Adjustment Expense Inventory Adjustment Expense Inventory Adjustment Expense Inventory Adjustment Expense Inventory Adjustment Expense Account Combination Debit Credit ------------------.14010========== ========== IADJ IADJ Total: 1.14000002-0200-14010-000 002.385 002.0200. LLC.687.14010002-0220-14010-000 6 8 002.265 8 0 ========== ========== 19.396 37.---------.531.0100.955.14010003-0310-14010-000 54.885 ========== ========== 37.752 6.0320.14000001-0100-14010-000 56 0 001.---------001-0100-14000-000 468.14010002-0200-14010-000 40 0 002.577 IADJ 001-0100-14000-000 001.----.256 9.396 IMVT INTA Inventory INV IC Total: 16 © 2003 Solution Beacon.934 17.0200.531.0100.Test Subledger Account Map Request ID: Test Subledger Account Map Acct Title ----INV IVA IVA IVA IVA IVA IVA IVA 01-AUG-2003 01.060 332.0100.14010002-0200-14010-000 002. .14010003-0330-14010-000 2.313 003.0100.687. All Rights Reserved.14000IMVT INTA Total: INTA IMVT XFER Inventory Inventory – Transfers Inventory Valuation Variance INV XFR IVV 001-0100-14000-000 001.0200.14010003-0320-14010-000 12.0330.621 9.870 001.14010002-0230-14010-000 667.----.051.885 19.707 746.934 ========== ========== 17.0220.621 9.051.934 17.687.687.0230.649 0 003.934 9.955.215.577 1.14010IMVT XFER Total: XFER 17.520.

'DD-MON-YYYY').dates that cross over periods. UPDATE pm_btch_hdr SET batch_close_date = actual_cmplt_date WHERE batch_status = 4 AND TO_CHAR(actual_cmplt_date. If the dates for close and completion are in separate periods. -. -. LLC. then it is excluded -.When the actual_cmplt_date = 01/01/1970. All batches must be completed and closed within the same period 17 © 2003 Solution Beacon.set the batch_close_date = actual_cmplt_date for batches with -. .values to remain in WIP between periods and complicates reconciliation. then it causes problems with reconciling costing.'MONYY') AND actual_cmplt_date <> TO_DATE('01-JAN-1970'.since those need special attention. this situation causes inventory -.'MONYY') <> TO_CHAR(batch_close_date. The costing process creates separate entries for in the subledger when a batch is closed and when it is completed. All Rights Reserved.Why Reconciliation Didn’t Work n Production Batches u u This update statement is needed set the batch completion date equal to the batch close date when they occur in different periods ‘MONYY’.

they will have to be evaluated on a case by case basis to determine the resolution. If a batch is started in 1 period and finished in another period. actual_start_date. If this query returns any records.'MONYY') <> TO_CHAR(actual_cmplt_date. Usually.Why Reconciliation Didn’t Work (cont.this query will verify that there are no batches that cross period boundaries SELECT batch_no. actual_cmplt_date . reconciling costing is more difficult. 18 © 2003 Solution Beacon. -.'MONYY') AND batch_status = 4. it will be to set the completion date and close date to the same period as the start date. . LLC.) n Production Batches u t All batches must be completed and closed within the same period This query is a final check to ensure that there are no batches that cross period boundaries.batch_status FROM pm_btch_hdr WHERE TO_CHAR(actual_start_date. All Rights Reserved.

trans_um. All Rights Reserved.source_line_number.line_id AND wdd.completed_ind = 1 AND gic.) n Order Management u u Orders must be ship confirmed with update shipping completed (oe_interfaced flag = Y) n Inventory Management u Inventory movement from a costed warehouse to an uncosted warehouse SELECT wdd. cm_whse_asc cwa.period_code = '0208' AND itp.trans_qty * gic.whse_code GROUP BY wdd.orgn_code AND gic. wdd. TO_CHAR(ITP.cost_mthd_code = 'PMAC' AND itp.whse_code = cwa.'DD-MON-YY HH24:MI:SS') TO_DATE('01. gic. SUM(itp.MONAND TO_DATE('31-AUG-02 23:59:59'. TO_CHAR(ITP. gl_item_cst gic.source_header_number.source_header_number order_number. wdd.source_line_number line_number.oe_interfaced_flag = 'N' AND itp.source_header_number.Why Reconciliation Didn’t Work (cont. itp.trans_qty <> 0 AND itp.source_line_number. wdd. itp. itp.delivery_detail_id = itp.MONAND itp.orgn_code = gic.'YYMM').doc_type = 'OMSO' AND itp.item_Id = gic.AUG.00:00:00'.cost_whse_code AND cwa.calendar_code = 'PMAC' AND gic. cwa.AUG. .acctg_cost) cost gic.trans_date BETWEEN TO_DATE('01-AUG-02 00:00:00'.'YYMM') period.line_detail_id AND wdd.'DD-MON-YY HH24:MI:SS') TO_DATE('31.'DD.acctg_cost) FROM ic_tran_pnd itp.trans_um. wdd.item_id AND gic. LLC.trans_um 19 © 2003 Solution Beacon. wsh_delivery_details wdd WHERE wdd.source_line_id = itp.TRANS_DATE.location <> 'NONE' AND itp.whse_code = itp. itp.'DD.23:59:59'.TRANS_DATE.

Actual Cost Process cm_cmpt_dtl Transactions are costed and the components and costs are stored in this table gl_item_cst gl_subr_tst Cost components are rolled up to reflect total item cost Accounting transactions are allocated by period. Used for inventory valuation. warehouse. All Rights Reserved. warehouse and item. LLC.Actual Costing Behind the Scenes Process Preliminary Close Inventory Table ic_perd_bal Description Onhand balances are summarized by period. sub-event and account title Preliminary GL Cost Update Test Subsidiary Ledger Update 20 © 2003 Solution Beacon. .

Questions? KMcCormick@SolutionBeacon. All Rights Reserved.com 21 © 2003 Solution Beacon. LLC. .

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