Its month end, now comes the reconciliation crunch!

Richard Byrom Oracle Applications Consultant http://www.richardbyrom.com

Agenda
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

Objectives
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.

Objectives
Payroll &Human Resources

Manufacturing subledgers

Oracle General Ledger

Financial subledgers

Objectives
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 dont 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 is necessary

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. Document types and sub types need to be looked at

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/Cs should appropriate filter the information through to General Ledger Autoaccounting Need to look at document numbering

Month end close steps

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

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

Receivables Steps Reconciliation Results

Beginning AR Trial Balance + Transaction Register - Receipt Register +/- Adjustment Reqister - Prepayments Remittance Report* Ending AR Balance Jul-02 94,890,824.48 26,197,804.53 -42,318,784.05 0.00 0.00 78,769,844.96

Receivables Steps Reconciliation Results

Description Amount Current Period End AR Aging Total 39,330,142.00 Prior Period End AR Aging Total 55,454,778.25 Change in AR Balance -16,124,636.25 + Invoices/Debit Memos - Credit Memos - Cash Receipts - Write Offs Change in AR Balance Debits Posted Credits Posted Change in AR Balance x=y=z 26,409,424.57 -211,620.04 -42,318,784.05 0.00 -16,120,979.52 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

26,763,035.64 Extracted from Trial Balance -42,887,671.89 Extracted from Trial Balance -16,124,636.25 x -3,656.73

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, not generated by AR. Check for Invoices raised against the AR Control account

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 - (Current Month) Posted Payment Register (Current Month) Accounts Payable Trial Balance Amount -27,428,898.13 7,778,812.99 -5,779,945.70 -25,430,030.84

Reconciliation can also be achieved using Tutor Business Form FOR0672

Reconciliation Problems
If AP does not reconcile to GL
Check that the reports have been run for the correct date/period. Run GL Post in 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, not generated by Accounts Payable. Check for Payments/Invoice Distributions made against 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

Fixed Assets Results

Description Previous Months Ending Balance + Asset Additions + (-) Adjustments - Depreciation Charge - Retirements + Capitalizations + (-) Reclassifications + (-) Transfers Current Months Ending Balance Cost 120,951,159.11 658,900.00 0.00 0.00 0.00 0.00 0.00 121,610,059.11 NBV 96,421,655.44 658,900.00 -450,506.21

96,630,049.23

Alternative reconciliation using FOR0674 Tutor Business Form Printing of Reconciliation Report

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 FSGs

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 *.* When the text import utility appears choose finish, you can now sort the file according to your personal requirements

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.

Additional tips cont.d - Tutor

Use Oracle Tutor Business forms to give you reconciliation templates.

Conclusion
Reconciliations are important in order to identify problem areas and rectify them on a timely basis. Procedures should be put in place to facilitate reconciliation as well as ensure that the organisation is making use of all possible tools. Setups have a significant impact on the ease of reconciliation.

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