Oracle Fusion Financials Period End Close Process and Dependencies

By

Oracle ERP Cloud customers have a need to close their books every period, quarter and/or year. This article provides guidance on the period-end close procedures for Oracle Cloud Application modules, across Financials, Procurement, Projects, Inventory, and Payroll. It provides an overview of the relative timing of these procedures across the various modules. The steps included in this article are intended to be generic and do not relate to a specific organization.

You may have additional steps that pertain to your specific organization, industry, or geography, so you can choose to extract the steps from this article that pertain to your organization and customize it by adding additional reports or procedures.

Although this document refers to “Period Close Procedures”, many of the processes can be performed regularly throughout the accounting period as required. Each subledger application provides control as to when and how frequently data is transferred from the subledger application to General Ledger.

Furthermore, if an organization has implemented multiple ledgers or multiple business units for a ledger, these procedures need to be performed for each ledger or business unit individually.

Period Close Dependencies

Before you begin the period-end close process, you need to understand the dependencies between the Oracle ERP Cloud application modules. The relationships are displayed in this diagram.



Dependencies

  • Close Payables before closing Procurement to take into account the purchasing accruals at period end to accrue expenses on un-invoiced receipts.
  • Close Payables before closing Inventory to ensure the un-invoiced accrual entry is accurate.
  • Close Payables before closing Fixed Assets to ensure invoices are completed and capital invoice line distributions are transferred from Payables to Fixed Assets.
  • Close Payables before closing Projects to ensure invoices and expense reports are completed and transferred to Projects.
  • Close Procurement before closing Inventory to allow miscellaneous transaction corrections in Inventory.
  • Close Inventory before closing Projects so that Project-related inventory transactions are completed and imported into Projects.
  • Transfer all relevant Project costs to Fixed Assets and transfer revenue to Receivables before closing Fixed Assets and Receivables.
  • Close all subledger applications before closing General Ledger.

Period Close Procedure

1. Cash Management

  • Complete Daily Cash Management Activities
  • Load Bank Statements
  • Reconcile Bank Statements
  • Review Autoreconcile Bank Statements Results and Resolve Exceptions
  • Create Bank Statement Transactions
  • Resolve Un-reconciled Statement Lines
  • Create Accounting and Post to General Ledger
  • Submit Cash to General Ledger Reconciliation Report
  • Submit Bank Statement Report
  • Submit General Ledger and Subledger Account Analysis Report
  • Correct any Invalid Entries to the General Ledger Cash Account (Optional)

 2. Payroll

  • Cost Un-reconciled Payments
  • Transfer Payment Information to Cash Management
  • Create Accounting and Transfer to General Ledger
  • Cost Reconciled Payments and Create Accounting
  • Calculate Partial Period Accruals

 3. Payables

  • Complete and Approve All Transactions and Payment Files
  • Reconcile Payments to Bank Statement Activity
  • Create Accounting and Transfer to General Ledger
  • Submit the Unaccounted Transactions Sweep Process
  • Close the Current Payables Period
  • Open the Next Payables Period
  • Reconcile Payables Activity for the Period
  • Review Payables Invoice Aging Report
  • Submit Payables Invoice Register and the Payables Payment Register
  • Accrue Un-invoiced Receipts
  • Submit Mass Additions Transfer to Fixed Assets
  • Submit Transfer Cost Information to Cost Management
  • Review Third Party Balances Report (Optional)
  • Submit General Ledger and Subledger Account Analysis Report
  • Review Reports for Tax Reporting Purposes (Optional)

 4. Projects

  • Close Feeder Systems
  • Import transactions into Projects
  • Set Period Status in Projects to Close Pending
  • Ensure Next Period is Open or Future Enterable
  • Process Cost Transactions
  • Create Accounting for Cost Transactions
  • Generate Asset Lines and Interface to Fixed Assets.
  • Generate Revenue
  • Generate Invoices and Interface to Receivables
  • Review and Resolve Billing Transaction Exceptions
  • Reclassify Billing Offset Balances
  • Create Accounting for Revenue and Billing Offsets
  • Submit and Review the Period Close Exceptions Reports
  • Verify that all Transactions are Accounted
  • Submit the Project Cost Account Reconciliation report (Optional)
  • Close Period

 5. Receivables

  • Complete All Transactions for the Period Being Closed
  • Recognize Revenue
  • Reconcile Receipts to Bank Statement Activity for the Period
  • Create Accounting and Transfer to General Ledger
  • Pending Close the Current Receivables Period
  • Open the Next Receivables Period
  • Review Subledger Period Close Exception Report
  • Review Potential Reconciling Items Report (Optional)
  • Reconcile Receivables Balances to General Ledger
  • Review Receivables Aging By General Ledger Account Report
  • Review Third Party Balances Report (Optional)
  • Close Receivables Period
  • Review General Ledger and Subledger Account Analysis Report
  • Estimate Provision for Bad Debt (Optional)

 6. Procurement

  • Complete All Transactions for the Period Being Closed
  • Review Outstanding and Overdue Purchase Orders (Optional)
  • Follow up Receipts - Check with Suppliers
  • Complete the Payables Period-End Process
  • Perform Period-End or Year-End Budgetary Control or Encumbrance Processing (Optional)

 7. Inventory

  • Complete All Transactions for the Period Being Closed
  • Check Transaction Interfaces
  • Submit Period-End Validations
  • Check and Fix Cost Processing Errors
  • Open the Next Inventory Period
  • Close the Current Inventory Period
  • Submit Create Accounting Process in SLA in Draft Mode
  • Submit Inventory Valuation Reports and Reconcile the Costing Inventory Valuation with General Ledger
  • Submit Create Accounting Process in Final Mode

 8. Fixed Assets

  • Complete All In-Progress Transactions
  • Complete All Transactions for the Period Being Closed
  • Submit Depreciation
  • Roll Back Depreciation
  • Create Deferred Depreciation Journal Entries (Optional)
  • Create Accounting
  • Review Subledger Period Close Exception Report
  • Project Depreciation using What-If Depreciation (Optional)
  • Review and Post Journal Entries
  • Reconcile Fixed Assets Balances to the General Ledger

 9. General Ledger

  • Set Next Period Status to Future Entry
  • Complete Import of Accounting Entries from Subledgers
  • Complete Import of Accounting Entries from Non-Oracle-Cloud Subledgers (Optional)
  • Generate Reversal Journals (Optional)
  • Generate Allocations and Recurring Entries (Optional)
  • Review and Verify Journal Details of Un-posted Journal Entries
  • Post All Journal Batches
  • Submit Subledger Period Close Exceptions Report
  • Reconcile General Ledger Balances
  • Reconcile Intercompany Balances (Optional)
  • Enter Adjustment and/or Accrual Journal Entries and Post
  • Maintain Foreign Currency Exchange Rates
  • Revalue Balances (Optional)
  • Translate Balances (Optional)
  • Consolidate Subsidiaries (Optional)
  • Close the Current General Ledger Period
  • Open the Next General Ledger Period
  • Reverse Accrual Journal Entries (Optional)
  • Submit Financial Reports for the Closed Period
  • Reconcile Encumbrance Accounting Balances (Optional)
  • Carry Forward Encumbrance Accounting Balances at Year-End (Optional)

 

-Sukesh

 

 

Comments

Post a Comment

Popular posts from this blog

Oracle ERP - Year End Closing Journals

By
  Many organizations follow specific procedures to generate special journal entries to close and open fiscal years. These closing entries apply to both the income statement and balance sheet. Auditable closing procedures vary considerably, depending on country reporting requirements, generally accepted accounting practices in a country, and organization business needs. General Ledger is equipped to create actual closing journals for year-end and other closing periods. If your organization has multiple legal entities, you can create closing journals for multiple ledgers simultaneously with ledger sets. You also have added security through data access sets because you can only run the closing journals programs against ledgers you have full read and write access to through your data access set. To process year-end closing journals, we recommend you: Set up the last day of your fiscal year as an adjusting period. Set up the first day of your new fiscal year as an adjusting period...
Read more

Oracle Revenue Recognition

By
In Revenue Recognition we have two concepts in oracle apps. 1. Invoicing Rule. 2. Accounting Rule. Invoicing Rule- Invoice rules will be determined the accounting period in which receivables are recognized. There are 2 types of Invoice Rules: 1. Bills in advance 2. Bills in Arrears Bills in advance- System will recognize the invoice amount as an advance or starting of a project. In case of Bill in advance “Unearned Revenue " will come into the picture. If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the following journal entries. In first Period: Receivables A/c .....Dr To Unearned Revenue A/c......Cr To Tax A/c ...........................Cr To Freight A/c.......................Cr In all periods of the rule for the portion that is recognized: Unearned Revenue A/c ......Dr To Revenue...........Cr Bills in Arrears- System will recognize amount at the end of the contract or project. In case of Bills in Arrears “Unbilled R...
Read more

Oracle Cloud - Year End Process

By
Many countries follow specific procedures to generate journal entries to close and open fiscal years. These year-end entries apply to both the income statement and balance sheet accounts. Auditable closing procedures vary based on country's reporting requirements and an organization's business needs. Oracle Fusion General Ledger provides two processes for the year-end closing journals. These processes close the accounts by putting the sum of the debits in the credit and vice versa. For many European countries the accounts must be closed by recording the difference between the total debits and total credits. Optionally run one or both of these closing processes to create one of two types of closing journals that move forward year-end and other closing period-end balances. Create Income Statement Closing Journals: Posts all of the income statement account balances to one or more retained earnings accounts. Create Balance Sheet Closing Journals: Posts all asset, liability, an...
Read more

Oracle Financial Cloud New Feature

By
Image
Learn how to configure dependencies between chart of accounts segments using  related value sets   Introduction: A related value set is an Independent type value set whose values are related to another Independent type value set. Use this feature to automatically display a list of related values in a segment value choice list, based on what value was selected in a preceding segment in your chart of accounts.   For example, if you have Company and Division segments in your chart of accounts, and the company US East has transactions in only the Car and Truck divisions, while the company US West deals with only the Motorcycle and Car divisions, you can define relationships between the Company and Division segments to enforce the relationships between their segment values.   The order of the segments in a chart of accounts impacts the behavior of related value sets. For example, if the value of the Company segment determines the valid values for the Division ...
Read more

Oracle Procurement Interview Questions

By
1.What exactly do you know about Procure to pay? Ans:   Well, it is an approach which is commonly called as P2P. Basically, it is the process of fulfilling the need for raw material which is required to accomplish manufacturing and other important tasks within an organization simply. The payment making of the raw material is also included in this. One of the best things about this cycle is it easily enables them to manage their cash flow without facing major issues.   2 . What is a Purchase Requisition and define various requisitions? Ans:  It is a formal request intended to procure/buy something that is needed by the organization. It is created and approved by the department requiring the goods and services. A purchase requisition typically contains the description and quantity of the goods or services to be purchased, a required delivery date, account number and the amount of money that the purchasing department is authorized to spend for the goods or ...
Read more