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How to use this Period Close Advisor:

This Period Close Advisor provides guidance on recommended period end procedures for E-Business Release
12.x. The subledger application tabs are listed in the recommended order of closing based on the data flow
dependency as shown in the diagram. Step by step best practices with tips and troubleshooting references are
provided to assist you through each phase. Review the 'Using the Period Close Advisor' section under the 'Intro'
tab for more details on how to use this advisor.

General Ledger:

This tab describes the processes and activities required for a successful period close in Oracle General Ledger
Release R12. General Ledger is the recipient of all the accounting produced in the different subledgers (whether
summarized or in detail), so the GL period should be the last one to close, because while subledgers are active,
GL status should be Open or at least Future Entry to accept journals for the transferred transactions.

In general you can find your periods in one of the following period statuses:

Never Opened: The period has never been used and does not allow any transactions. The status of these
periods can only be changed by the Open Next Periods program to Open or Future Entry.
Future - Entry: The period can accept transactions from GL and other modules, but they cannot be
posted, as the GL Balances records for the period do not exist yet. The status of these periods can only be
changed by the Open Next Periods program to Open.
Open: Period is available for data entry and posting. The status of these periods can be changed in the
Open and Close Periods form to Closed or Permanently Closed.
Closed: Period is closed for processing (transactions cannot be entered), but can be re-opened in case it is
necessary to go back to enter or modify accounting transactions for that period. The status of these periods
can be changed in the Open and Close Periods form to Open or Permanently Closed.
Permanently Closed: No further processing is possible. Only in this status is possible to archive and
purge GL data.The status of these periods cannot be changed.

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.

Attention: If you have installed combined basis accounting, then the steps listed will need to be
completed for both your accrual and cash Ledgers. This means 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.
Note: Periods are usually only Finally Closed when all adjustments and reporting requirements for
the prior financial year are finalized.
Tip: You can open a new period to enter and post transactions even before closing the previous
period, because the entries posted in one period will also update the balances in all the next periods
that were ever opened.

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Evaluate & Prepare

Preparing for Period Close begins with thorough product training to establish proper application setup and
usage. User Guides, Product Information Centers, and other key documents are linked within this advisor and
provide detailed product information that should be reviewed.

Evaluating and maintaining current code levels is also essential to a successful period close. As a Best Practice,
you should always ensure you are on the latest code with recommended patches applied. This will help avoid
known issues, prevent potential data corruption and provide the latest features and functionality. Having a
proactive patching plan and periodic proactive patching process is the best way to stay current. Please review the
following documents for guidance in this area:

Document: 313.1 Patching & Maintenance Advisor: E-Business Suite (EBS) 11i and R12

Document: 976188.1 Patch Wizard Utility

To search for recommended patches within My Oracle Support:

Navigation:
1. Login to 'My Oracle Support' (MOS)
2. Click on the 'Patches & Updates' tab
3. In the Patching Quick Links box on the left, click 'Recommended R12 Patches' under the Oracle E-
Business Suite heading
4. In the Maintenance Release LOV, select your version
5. Under Product or Family, select your product area
6. Select your Platform, then click 'Go'

Attention: Critical Patches will be marked with and exclamation mark '!' and Recommended Patches will
be marked with a 'check'

For more details, see Document: 1400757.1 12.1.3 How to Find E-Business Suite Recommended Patches

In addition, many E-Business Suite products have diagnostics and health checks that can proactively look for
issues within your data so they can be resolved as soon as they are detected. Those proactive diagnostics are
linked where relevant within the steps in this advisor. The link to the full catalog is below:

Document: 421245.1 E-Business Suite Diagnostics References for R12

1. Review Training Material

Document: Oracle General Ledger Implementation Guide Release 12.1

Document: Oracle General Ledger User's Guide Release 12.1
Document: Information Center: Oracle General Ledger
Document: Information Center: Oracle Financial Control (FC) and Reporting

2. Recommended Patching
Maintaining data integrity is key to ensuring a successful period close. As a best practice, you should always
ensure you are on the latest code level with recommended patches applied. The following documents are
updated frequently with the latest patches as they are released.

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Document: 1328833.1 R12.1: General Ledger List of Patches

Document: 954704.1 EBS: R12.1 Oracle Financials Recommended Patches
Document: 1070410.1 How to Prevent Possible General Ledger Balances Corruption Due to
Incorrect Program Incompatibilities in Release 12
Document: 883557.1 R12: How To Avoid and Fix Corruption in Data Transfer from SLA -
Negative Ledger_ID, Not Reached GL, Duplicate in GL

3. Validate Setup
Misclassified Accounts and setup problems are often the cause of problems only noticed later. Run the
following diagnostics to confirm there is no problem with your setup and review the recommendations in the
output to see if there are corrections that need to be made.

Diagnostic: 732155.1 General Ledger General Setup Test

Diagnostic: 732160.1 General Ledger Misclassified Accounts Activity Test
Attention: Re-check that you have correctly defined the number of calendar periods required to
accommodate the number of Future Periods, defined in your Ledger, used when you open the next
period. If you have issues regarding the calendar setup, please review Document: 1555532.2 Oracle
General Ledger Resolution Center: Calendar and Open Periods Issues.

4. Ensure Data Consistency

Incorrect data may exist due to a number of reasons, the principal being the result of misclassified accounts
which may generate unexpected balances. Please perform the following diagnostics before closing the period.

Diagnostic: 732156.1 General Ledger Period Closing Activity Test

Process & Post Journals

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

Check the status of the next accounting period is Future-Entry or Open. At year-end, if you have document
sequencing that may cross the year, it is recommended that you complete all period end processing prior to
opening the first period of the new financial year, otherwise there are no restrictions.

Note: Please note that when opening one period, a number of future periods can be automatically
set to Future-Entry status depending on the value defined for the Ledger in the Accounting Setup
Manager.

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

Journals are created to load accounting information into Oracle General Ledger and 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

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transfer data from subledgers, into Oracle General Ledger. The Create Accounting process of SLA (subledger
accounting) automatically submits Journal Import Process to generate the journals.

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

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 (this is the mandatory value in R12, except
otherwise advised by support). Therefore the corrections need to be made at the subledger level and
then accounted and transferred again to GL. The import errors from systems using SLA can no
longer be corrected or deleted in GL_INTERFACE.

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

Note: Having troubles with Journal Import or Journals? Please review Document: 1567058.2
Oracle General Ledger Resolution Center: Journal Import and Journal Entry.

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 Journal
wizard.

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:

a) Ensure that the accounting information from non-Oracle subledgers has been transferred to
Oracle General Ledger.

b) Run the Journal Import process for these sources.

If Journal Import completes with error or warnings, review the Journal Import Execution Report to identify
which journal entry batches were not successfully imported and:

a) Delete incorrect batches. Determine the source(s) for these error batches, and retrieve the run ID
from the Journal Import Execution Report.

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

c) 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.

Post the resulting Journal Entries 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.
Note: 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.
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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 through the assigned Data Access Set.

7. Generate Mass Allocation Journals (Optional)

Select the Mass Allocation Journals that require generation for the current period. Ensure that all entries for 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).

Note: 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.

Tip: 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 include:

Journal Batch Summary Report

Journals - General Report
Journals - Entry Report
Journals - Line Report
Tax Journals Report
General Ledger - Entered Currency
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 in the Posting Execution Report. This report is generated every time posting of a journal entry
batch occurs. This report indicates any errors in journal entries or journal entry lines discovered during the
posting process.

Run the General Journals Report with a Posting Status of Error Journals to review error journal entry batches
and their journal entries.

Update unposted 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.

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b) Period Status - Post Actual batches to open periods, Post Budget batches to any period in an open
budget year, and 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, and
Unbalanced journal entries.

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

10. Run the Period Close Exceptions Report

The General Ledger controller 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.

Note: This report is automatically submitted by General Ledger when closing a GL period if there
are unprocessed accounting events or untransferred journal entries, but you can also submit it
through a concurrent request.

11. 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).

Tip: 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:Balance Sheets e.g. Detail Trial Balance Report, Income Statements,Gross
Margin Analysis

12. Revalue Balances (Optional)

Revalue account balances to update functional currency equivalents for foreign currency balances. This process
creates journals that need to be posted.

13. Translate Balances (Optional)

a) Define any new currencies to which accounting balances are to be translated.

b) Maintain period-end exchange rates for all foreign currencies to which you want to translate.

c) Maintain average exchange rates for all foreign currencies to which you want to translate.

d) Maintain historical rates or amounts for any owner's equity accounts to be translated.

e) Translate account balances to the required defined currency. This creates a kind of reporting
currency ledger to hold the translated balances.

Tip: You can use the Currency Rates Manager to enter the rates through a spreadsheet.
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14. 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.

a) Consolidate within ledgers

Enter consolidating journal entries.

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

1) Automatic Eliminating Entries - define mapping rules to eliminate intercompany receivables,

payables, investments in subsidiaries, intercompany sales etc.
2) Recurring Journals- use formulas

Post consolidating journal entries.

Define a reporting hierarchy that consolidates all the companies.
Define financial statements with the reporting hierarchy.

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

Tip: 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.

b) Example of consolidation across ledgers when sharing same COA and Calendar (Using Ledger Set and access
granted via Data Access Set.):

1. Define consolidated FSG.

2. Perform revaluation and translations across ledgers.
3. Enter consolidated and eliminating entries.
4. Report on FSG by selecting the ledger set option while running.

c) Example of consolidation across ledgers using the Global Consolidation System(GCS):

1. Define consolidations.
2. Perform revaluation and translation of foreign subsidiaries as required.
3. Run consolidations.
4. Enter consolidated and eliminating entries.
5. Report on this consolidated ledger using FSG's.
6. Analyze results using drill-down capability from Parent ledger to Subsidiary ledgers.

Reconcile

Subledger Accounting (SLA) - Reconciliation

SLA introduced changes in the way reconciliation is performed:

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In Release 11i, you reconciled transactions and distributions to GL through transactional reports. In the
accounting reports in Release 11i, the balances are displayed but not the transactional information.

In Release 12, there is no reason to reconcile distributions on transactions to GL, but 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.

Note: When you do account balance reconciliation, you should ignore distributions in Release 12,
especially if you have altered your subledger accounting rules.

1. 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.

Tip: Optionally you can define a intercompany calendar and use the period status to control the
timing of intercompany transaction processing independent of the General Ledger, Receivables and
Payables.

2. Review Account Balances

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.

You can review Detail Account Balances On-line or via Reports such as 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.

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 reports
provide detailed information on each journal entry line including source, category and date.

a) 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.

b) Trial Balance Reports

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

c) 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.

3. GL Entry 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
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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.

4. 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.

5. 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.

6. 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 to the
Accrual Write-Off Report), and manual accruals can be entered into Oracle General Ledger at this
point also.

Close Period

Closing the Period

When you attempt to update the period status to Closed for one ledger, the system checks for unposted
transactions in all operating units within the ledger. If there are unposted transactions in any of the operating
units, you will need to resolve the unposted transactions for those operating units before you can close the period
for that ledger. See the referenced documents and diagnostics within this advisor to troubleshoot these types of
issues.

Attention: Closing is always executed at a ledger level and not at operating unit. You can only execute
close from the responsibility which has access to all operating units within a ledger.

Note: In Release 11i, GL automatically created the balancing lines for journals posted to GL when you
closed your periods in each of the subledgers. In Release 12, subledger accounting creates the balancing
lines at the time you account for the subledger transactions. The subledger accounting journal represents
the actual accounting and the balancing lines are created as part of these subledger accounting journals.

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1. Perform Final Adjustments

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

At year-end this includes the optional Year-End Closing Journals for generating the Income Statement Closing
Journals and Balance Sheet Closing Journals.

2. Close the Current Oracle General Ledger Period

Close the current GL accounting period, using one of the following methods:

a) The Open and Close Periods window

b) The Open and Close Periods programs

If you have Ledger Sets defined, you can open and close periods for multiple ledgers in a single process using
the Open and Close Periods programs.

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).

Attention: When you permanently close a period, all prior periods are also permanently closed and
can never be re-opened.
Attention: You must have read and write access to the ledger and all of its balancing segment
values and management segment values to open and close periods.

This step must be repeated for each ledger unless a Data Access Set is setup to give access to multiple ledgers.
This is controlled by the GL: Data Access Set profile option. Using a Data Access Set that has access to multiple
ledgers, programs can be run for multiple ledgers from a single responsibility. For more information please refer
to Oracle General Ledger User's Guide.

3. Open the Next Oracle General Ledger Period

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

Note: In real life when a period is closed, users have already opened one, two or even more periods
ahead, so this step may occur out of the sequence, i.e you do not need to open the next period only
after closing the prior period. The inconvenience of having many periods opened in advance is that
the performance in some operations like Journal Posting or Summary Accounts creation may be
impacted. For that reason we recommend you to open only the periods that you really need to have
opened. If they are Future Entry they can also accept journals (no posting) but will not impact
performance.

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
receipt 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. Using a Data Access Set that has access to multiple ledgers, programs can be run for multiple
ledgers from a single responsibility.

4. Run the GL Program - Optimizer

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Run the Optimizer program with the parameter "Gather Statistics" = Yes to update statistical information about
your GL data. This information improves the General Ledger performance.

Frequency: To keep these statistics current, you should run the Optimizer at least once a period
(the open period generates a high volume of new rows in GL balances tables), or any time you add
several segment values, define a new chart of accounts, or add or delete summary templates.

5. Run Financial Reports for the Closed Period

a) Run a final Trial Balance Report.
b) Run final Financial Statement Generator Reports (FSG) or Report Sets as required by the
organization including Income Statements and Balance Sheets.
c) FSGs can also be published via the Financial Reports Manager (FRM) in different formats
(Excel, pdf, html).

6. 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 (RXi) and XML Publisher (XDO). 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

7. 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:

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

b) Carry forward encumbrances, and the encumbered budget.
c) Carry forward the funds available as at the end of the year.

Other facilities available:

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

b) 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:
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1. Open the next encumbrance year. Use the Open and Close Periods window to open the next encumbrance
year.
2. 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.
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.

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