It’s month end, now comes the reconciliation crunch

Richard Byrom Oracle Applications Consultant Appsworld January 2004

• • • • Presentation assumptions and objectives Why and how should we reconcile Setup issues Close procedures for each module, reconciliation results & two way drill down • Additional Tips • Conclusion • Questions and Answers

• This presentation emphasizes the importance of on a regular basis so as to ensure improved control over financial information • To discuss different setup issues and that may impact your ability to reconcile. • To outline the month end close process for each module and give practical examples of expected reconciliation results.

Payroll &Human Resources

Manufacturing subledgers

Oracle General Ledger

Financial subledgers

ACCOUNTS RECEIVABLE Transactions - Invoices / Memos - Receipts Master Data - Customers -

FIXED ASSETS Transactions - Additions / Disposals - Depreciation Master Data - Asset Categories -

GENERAL LEDGER Transactions - Journals - Interfaces Master Data - Chart of Accounts! - Sources & Categories - Document Sequencing-

CASH MANAGEMENT Transactions - Reconciled Payments - Reconciled Receipts - Miscellaneous Transactions Master Data - Bank Accounts -

ACCOUNTS PAYABLE Transactions - Invoices / Memos - Payments Master Data - Suppliers -

What should be reconciled? • Control Accounts • Inter Modular Movement • Intercompany Accounts .

What happens if we don’t reconcile properly? • Potential data corruption not detected • Sub modules may not be posted to the GL • Multiple months may remain open for a variety of modules • Repetitive errors may not be detected • Posting of non standard journals to control accounts • Open item system carries forward problems to next year. .

Why the problem with reconciliations • Inadequate training/inexperienced users • Lack of understanding of the system architecture • Trying to use old procedures for a new system • Bad Management .

How should we reconcile? • Establish your out of system procedures • Ensure that all the standard functionality provided by the system is understood and used • Make use of additional tools if necessary .

• Document types and sub types need to be looked at .Setup Issues – General Ledger • Sequential numbering of documentation should be taken into consideration. • Chart of accounts should be appropriately designed and have an appropriate groupings and sub grouping by using parent and child relationships.

Setup Issues – Sub Ledgers • Master Data – Should be separated according to the different groupings of debtors available per profile options – Customers should be given appropriate hierarchies – Customer numbering should done in such a way that facilitates understanding of the various listings .

Setup Issues – Sub Ledgers • Transactional Data – Ensure that appropriate transaction types are created – Control A/C’s should appropriate filter the information through to General Ledger – Autoaccounting – Need to look at document numbering .

Month end close steps 1. 4. 2. 6. 7. 5. Pre-posting activities Posting to supporting systems Run verification Reports Reconcile against interfacing systems Close periods Problem Solution Two way drill . 3.

Receivables Steps – Pre-posting • Pre-posting activities – – – – – – – Enter Receipts Enter Invoices Record NSF checks Run Autoinvoice Interface Print New Invoices Run Incomplete Invoice Reports Adjustment Approval Report .

Receivables Steps – GL Posting • Posting to GL (AR) Interfaces > General Ledger .

Receivables Steps – Reports & Period Close • Verification Reports – – – – – – – – – – Sales Journal by GL Account* Receipt Journal Report* Journal Entries Report* Transaction Register* Adjustment Register Receipt Register Report* Aged Trial Balance* Invoice Exceptions Report Applied Receipts Register Unapplied Receipts Register • Close Periods .

197.Adjustment Reqister .Receivables Steps – Reconciliation Results Beginning AR Trial Balance + Transaction Register .05 0.824.844.Prepayments Remittance Report* Ending AR Balance Jul-02 94.00 78.890.96 .318.784.53 -42.804.00 0.48 26.Receipt Register +/.769.

Credit Memos .424.784.04 -42.035.620.671.64 Extracted from Trial Balance -42.636.887.636.330.454.25 Change in AR Balance -16.Write Offs Change in AR Balance Debits Posted Credits Posted Change in AR Balance x=y=z 26.00 -16.979.120.89 Extracted from Trial Balance -16.73 .00 Prior Period End AR Aging Total 55.763.124.656.Receivables Steps – Reconciliation Results Description Amount Current Period End AR Aging Total 39.409.778.25 x -3.142.52 Comments Extracted from AR Aging Report for Jul-02 Extracted from AR Aging Report for Jun-02 x Extracted from AR Sales Journal Reports Extracted from AR Sales Journal Reports Extracted from AR Receipt Journal Reports y 26.124.Cash Receipts .57 -211.318.25 + Invoices/Debit Memos .05 0.

Reconciliation Problems • If AR does not reconcile to the general ledger – Check that the reports have been run for the correct date/period – Run GL Interface – Make sure all Journals are posted in the General Ledger – Re-Run both Trial Balance Reports – Check for journal entries in the AR Control accounts in GL. – Check for Invoices raised against the AR Control account . not generated by AR.

Receivables two way drill .Invoices .

Receivables two way drill – Invoice Status .

Receivables two way drill – Invoice Accounting .

Receivables two way drill – Cash Receipts .

Receivables two way drill .

Receivables two way drill – Receipt History .

Receivables two way drill-Miscellaneous Receipts .

Receivables two way drill-Miscellaneous Receipts .

Receivables two way drill.GL to Invoice .

Receivables two way drill – Drilldown effect .

Payables Steps • Pre-posting activities – – – – – Enter Employee Expense Reports Enter Invoices Run Invoices on Hold Report Run Payables Approval Check for Unapproved Invoices .

Payables Steps – Transferring to GL Payables Steps – Create mass additions .

Payables Steps – Reports & Period Close • Verification Reports – – – – – – – Accounts Payable Trial Balance* Posted Invoice Register* Posted Payment Register* Expense Distribution Report Invoice Aging Report* Posting Hold Report Invoice Register* • Close Periods .

Payables Steps – Reconciliation Results Description (Previous Month) Accounts Payable Trial Balance + (Current Month) Posted Invoice Register .84 • Reconciliation can also be achieved using Tutor Business Form FOR0672 .898.030.430.70 -25.945.778.99 -5.428.13 7.(Current Month) Posted Payment Register (Current Month) Accounts Payable Trial Balance Amount -27.812.779.

– Check for Payments/Invoice Distributions made against the AP control account. . – Run GL Post in Accounts Payable.Reconciliation Problems • If AP does not reconcile to GL – Check that the reports have been run for the correct date/period. not generated by Accounts Payable. – Post all payables generated batches in the General Ledger – Re-Run both Trial Balance reports – Check for Journal Entries in the AP control account.

Payables two way drill – query an invoice .

Payables two way drill – view accounting .

Fixed Assets Steps • Pre-posting activities – – – – – – – – Prepare Mass Additions Post Mass Additions Delete Mass Additions Prepare Manual Additions Retire Assets Adjust Assets Capitalize CIP Assets Run Depreciation .

Fixed Assets Steps – GL Posting • Run Journal Entries .

Fixed Assets Steps – Reports & Period Close • Verification Reports – – – – – – – – – – Cost Detail Report* CIP Detail Report Asset Addition Report Cost Adjustment Report Asset Retirements Report Asset Reclassification Reconciliation Report Asset Transfer Reconciliation Report CIP Capitalization Report CIP Assets Report Unposted Mass Additions Report • Close Periods .

Retirements + Capitalizations + (-) Reclassifications + (-) Transfers Current Month’s Ending Balance Cost 120.900.049.00 0.00 -450.610.00 0.506.159.00 121.00 0.21 96.Depreciation Charge .Fixed Assets Results Description Previous Month’s Ending Balance + Asset Additions + (-) Adjustments .00 0.655.23 • Alternative reconciliation using FOR0674 Tutor Business Form • Printing of Reconciliation Report .44 658.951.11 NBV 96.630.421.900.059.11 658.00 0.

Cash Management Steps • Pre-posting activities – – – – Capture/Interface Bank Statements Automatically reconcile statements Manually reconcile amounts not cleared Check all statements are fully reconciled • Bank Statement Detail Report • Online checks .

Cash Management Steps • Post to GL – Ensure payables and receivables posting has taken place • Verification Reports – Cash In Transit Report – Cleared Transactions Report* – General Ledger Reconciliation – Transactions available for Reconciliation .

Cash Management Results • Check Receipts against Receivables Reports. Cash Account per GL and Cash Management Reports • Check Payments against Payables Reports. Cash Account in GL and Cash Management Reports .

Cash Management two way drill – Account Inquiry .

Cash Management two way drill – Drilldown effect .

General Ledger Steps • Pre-posting activities – – – – – – Reconcile interfaces from feeder systems Enter Manual Journal Entries Reverse Entries Run Journal Import Generate Recurring Journal Entries Generate Mass allocations • Post Journal Entries .

General Ledger Results • Verification Reports – – – – – Journal Entry Report Account analysis Report* Account Analysis – Sub Ledger Detail Report Trial Balance – Detail Report* Run Financial Statement Generator – FSG’s • Close Periods .

Additional Tips – File Export • To export the results of an online inquiry or onscreen view choose File > Export from the menu • Save the file generated to your desired location • Open the file from Microsoft Excel. Ensure that from the open dialogue box in Excel you specify files of type all *. you can now sort the file according to your personal requirements .* • When the text import utility appears choose finish.

.Additional tips Cont.d – Tools>Copy File • Use Tools > Copy file from the menu when you are in a report • Save the file in web or text format to your desired location – preferably use text • Import the file into Excel using the text import wizard as displayed – use the report column headers as your fixed width delimiters.

d .Additional tips cont. .Tutor • Use Oracle Tutor Business forms to give you reconciliation templates.

• Procedures should be put in place to facilitate reconciliation as well as ensure that the organisation is making use of all possible tools. Please come and see my next presentation: • Take the pain out of Public Sector Budgeting implementation Setups – Thursday January 29th. 2004 at 03:30 PM in room 20D.Conclusion • Reconciliations are important in order to identify problem areas and rectify them on a timely basis. • Setups as well as inquiry and reporting tools have a significant impact on the ease of reconciliation. .


com Company : RPC Data Ltd Web Site : http://www.richardbyrom.Speaker Information Name : e-mail : Richard Byrom http://www.

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