Closing the AP Month

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<p>Closing the AP Month - How it works and what to do when it doesn t!Deidre Figueroa Oracle Corporation AbstractImprove your AP process by understanding the fundamentals of closing the month in AP and learning what to do when the unexpected occurs. This paper provides an overview of the AP month-end process and discusses proven solutions to frequently encountered problems. Topics include new 10.7 and cash management features. is a simple process. You navigate to the close period form, select close, commit, and if all is well, your period will close and balance. Its that little phrase if all is well that introduces the bulk of the work required for the month end closing. If you understand the concepts of what happens during the closing and how your system setup affects the process, you can insure that all is well for your period to close and know that it is in balance. The closing process will be divided into 5 main steps. Pre-post work Posting Reporting Balancing Closing</p> <p>ScopeI. Fundamentals of Closing II. Solutions to Frequently Encountered Problems III. Overview of the Cash Management Impact on AP Please note that this paper does not discuss data entry, but focuses on insuring that the transactions entered are posted and balanced. The new 10.7 reporting features are integrated with the closing process, while a highlight of the Cash Management will be discussed separately.</p> <p>Pre-Post WorkBefore you can post to the GL, you want to review both your invoice and payment transactions to insure that they are ready to post. Insure invoices are ready to post: An invoice must be approved and/or have no posting holds in order to be selected for posting. To insure that</p> <p>I. FUNDAMENTALS OF CLOSINGMonth-end closing within the Oracle Payables system</p> <p>Close/Open Period</p> <p>Pre-Post Work</p> <p>Reporting &amp; Balancing</p> <p>GL_INTERFACE</p> <p>AP Data GL Data AP Transfer to GL Journal Import AP Data</p> <p>your invoices are ready to post, you should run autoapproval and review the hold reports 1. Approve invoices The approval process attempts to approve invoices and remove any existing holds. If exceptions are found, some invoices may be placed on hold and not approved. If an invoice contains a system hold you need to manually fix the invoice and then re-run the autoapproval process to remove the hold. All user defined holds must be manually removed as they are not automatically removed by the autoapproval process. Payables - Autoapproval report 2. Look for unapproved invoices After running autoapproval, you want to look for invoices containing holds and Oracle provides 3 reports for this purpose. If an invoice appears on any of these reports, you either need to adjust the invoice or manually remove the hold. Invoice Hold Report - displays all held invoices. Posting Hold Report - only displays invoices with holds that prevent posting. Matching Hold Report - only displays invoices with matching holds. Insure Payments are made: The pre-work for payments is limited to insuring that the transactions you want recorded in this period have been processed. You must insure that all your payment batches have been completed: either confirmed or canceled. A period will not close if there are payment batches in a status other than confirmed or canceled. If an invoice is approved by will not pay, you should insure that the invoice is due to be paid and that the payment schedule is not on hold.</p> <p>Step 2 - Journal Import Creates journals in the GL system Step 1 - Transfer from AP to GL: Posting begins in the AP system and can be started from a form or report, depending on the version of the applications you are using. Character: /Navigate Task GLPost Character (10.6 and 10.7) and GUI: Payables Transfer to General Ledger Report 1. The transfer process selects the invoices and payments that are ready to post to the general ledger. 2. The appropriate accounting transactions are created and inserted into the GL_INTERFACE table. This is the GL open interface used to import journals. It is a temporary table that holds all the accounting transactions received from AP until they are imported into the GL system. Once a transaction has been successfully imported into the GL system, it is deleted from the GL_INTERFACE table. 3. Transactions successfully selected and inserted into the GL_INTERFACE table are updated to "Posted" in the AP system. Transactions that were selected but encountered some exception are not inserted into the GL_INTERFACE table nor are they updated to Posted. (Exceptions can be an inactive accounting flexfield value, a GL_DATE in an un-opened GL period, exchange rate missing, etc.) When an invoice or payment encounters an exception, the distribution containing the exception will not post, yet will not prevent the other distributions from posting. For example, an invoice with 2 distributions can have one distribution that posted and one that encountered an exception. If you query the invoice, the status will show as partially posted. AP is Posted GL not yet Updated</p> <p>PostingOnce the pre-work is complete, you are ready to post. The posting process selects and updates transactions in the AP subledger and creates accounting transactions for the general ledger. This process actually occurs in 2 distinct steps: Step 1 - Transfer from AP to GL Updates the AP system</p> <p>ap_invoice_ distributions</p> <p>AP Transfer to GL</p> <p>gl_interface</p> <p>ap_invoice_ payments AP Journal Reports</p> <p>4. After the process is complete, the AP Journal reports are generated to display the results of the posting selection. These reports are very important and should be saved. They are generated directly from the posting process and can not be rerun at a latter date. Accounts Payable Journal Entry Audit Report This report lists the details of the accounting transactions that have been inserted into the GL_INTERFACE table. It displays the AP transaction, its corresponding debits and credits, the GL accounts affected, and more. Accounts Payable Journal Entry Exception Report This report displays the transactions that encountered an exception during the posting process. Each transaction includes an exception code that explains why it was prevented from posting. All transactions appearing on this report will require some change in order to be selected for posting the next time you run the AP transfer process. Once the AP Transfer to GL process has finished, only the AP system will have completed its portion of the posting process. As far as AP is concerned, posting is done and complete. For AP, there is no turning back from this point. The transactions are now in the GL_INTERFACE table waiting to be imported into the GL, via the Journal Import process. If the transactions are deleted from the GL_INTERFACE table, the AP system will still show the transactions as posted, even though the GL has not imported the transactions. Once an AP transaction has been posted, it can not be re-selected for posting again, and there is no system process to un-post a transaction. Therefore, NEVER DELETE the AP information from the GL_INTERFACE table unless you do not want the accounting transactions to be reflected in the GL.Note!</p> <p>the date entered in this field will be selected for posting. 2. Posting in Detail or Summary This parameter determines the level of detail information recorded in the general ledger. Regardless of what choice is made, the AP subledger maintains all the detail information for each AP transaction. Detail Detailed posting implies that every invoice or payment distribution will create a unique GL journal entry. For example, 2 invoices with distributions charged to the same expense account will create 2 journal entries, each with a distinct debit and credit.</p> <p>Example Invoices Description Invoice #ABC Distribution #1 Invoice #XYZ Distribution #1</p> <p>(Liability Account 1-200) Amount Expense Account $50 $100 1-500 1-500</p> <p>GL Journal created Account Description 1-200 Liability - #ABC 1-200 Liability - #XYZ 1-500 Expense - #ABC 1-500 Expense - #XYZ</p> <p>Debit</p> <p>Credit $50 $100</p> <p>$50 $100</p> <p>Posting Options While submitting the AP Transfer to GL process, there are parameters that require input and each is important to the results received from the posting. Each parameter will be discussed, along with an example of its impact on the posting transactions. 1. Post Thru Date The GL_DATE attached to an invoice distribution or payment determines in which accounting period the transaction will be posted. All viable non-posted transactions having a GL_DATE less than or equal to</p> <p>Summary Summary posting groups transactions with similar accounting flexfield information together, and creates a single GL journal for each grouping. Debits and credits made to the same accounting flexfield are grouped separately, they are not summed together and net out. Example Invoices Description Invoice #ABC Distribution #1 Distribution #2 Invoice #XYZ Distribution #1 Distribution #2 (Liability Account 1-200) Amount Expense Account $60 ($10) $100 $0 1-500 1-500 1-500 1-500</p> <p>GL Journal Created Account Description 1-200 Liability Summary 1-200 Liability Summary 1-500 Expense Summary 1-500 Expense Summary</p> <p>Debit $10 $160</p> <p>Credit $160 $10</p> <p>transaction came from, but the individual distribution detail for that item is summarized. By using the detail/summary and audit options together, you can get detail information for some transactions and summary information for others. Review the following examples to see how the options work together.</p> <p>AP does not create accounting entries for zero amount transactions. If you have an individual payment or distribution line equal to zero, the transaction will not appear on the Journal Entry Audit report or the posting reports. However, the AP system will still flag the transaction as posted. 3. Posting with Audit Audit provides the information necessary to uniquely identify the AP transaction that created a GL accounting entry. (Information such as Invoice Number, Supplier Name, Check Number, etc.) Audit works with the detail/summary option to provide the information you desire to see in the GL. You must post in audit in order to utilize the following features: Posting in detail Zooming from GL to AP for transaction detail Running the Posted Payment and Invoice reports Audit is required in order to post in detail. If you request detail information, but do not have audit selected, you will not see detail, but summary information in the GL_INTERFACE table. There are different types of accounting transactions that can be inserted into the GL_INTERFACE table, and for each type, you can determine whether to request audit or not. Cash and Expense Transactions All transactions that affect a cash or expense account require Audit information. You can not change the default for these items. Discount, Realized Gain/Loss, and Cash Clearing (future payment) transactions. You have the option to select Audit or No Audit. Liability transactions You have the option to select Audit, No Audit or partial audit. Partial audit summarizes the liability transactions per invoice or payment, instead of for the entire posting batch. This provides enough detail to know which invoice or payment a</p> <p>Example Invoices Description Invoice #ABC Distribution #1 Distribution #2 Invoice #XYZ Distribution #1 Distribution #2</p> <p>(Liability Account 1-200) Amount Expense Account $50 $40 1-500 $10 1-500 $200 $125 1-500 $75 1-500</p> <p>Example Payments Description Check #101 Pays Invoice #ABC Supplier Payment Discount Taken Check #102 Pays Invoice #XYZ Supplier Payment Discount Taken</p> <p>(Cash Account 1-100) Amount Other Account $50 $45 $5 $100 $180 $20 1-200 1-700</p> <p>1-200 1-700</p> <p>Example #1: Post in detail Audit for Expense, Liability, Cash, and Discounts GL Journal created for invoices: Account Description 1-200 Liability - #ABC 1-200 Liability - #ABC 1-200 Liability - #XYZ 1-200 Liability - #XYZ 1-500 Expense - #ABC 1-500 Expense - #ABC 1-500 Expense - #XYZ 1-500 Expense - #XYZ</p> <p>Debit</p> <p>Credit $10 $40 $75 $125</p> <p>$10 $40 $75 $125</p> <p>GL Journal created for Payments: Account Description Debit 1-100 Cash - #101 1-100 Cash - #101 1-100 Cash - #102 1-100 Cash - #102 1-200 Liability - #101 $10 1-200 Liability - #101 $40 1-200 Liability - #102 $75 1-200 Liability - #102 $125 1-700 Discount - #101 1-700 Discount - #101 1-700 Discount - #102 1-700 Discount - #102</p> <p>Credit $9 $36 $67.50 $112.50</p> <p>automatically executed. If "Submit Journal Import" is equal to NO, then you manually submit the Journal Import process through the GL. Character: /Navigate Journal Import run GUI: Journal Import Run When submitting the process manually, there are 2 additional options that must be selected: Source and GROUP_ID. The source and GROUP_ID are used to uniquely identify which transactions in the GL_INTERFACE table you are requesting to import. For AP, the source will always be equal to Payables . The GROUP_ID will be unique for each posting batch that is created. A unique GROUP_ID is generated during the AP transfer process, and it identifies every transaction that belongs to the posting batch. The purpose of the journal import is to extract the accounting transactions and audit information from the GL_INTERFACE table and populate the appropriate GL tables. The transaction information in the GL_INTERFACE table will generate the actual accounting transactions in the GL journal tables (GL_BATCHES, GL_HEADERS and GL_LINES). During import, the audit information is removed from the GL_INTERFACE table and inserted into the GL_IMPORT_REFERENCES table. This table must be populated in order to produce the Posted Payment and Posted Invoice reports. This data is also used to zoom from a GL journal line to the originating AP transaction. The Audit information is the ONLY stored data link between the GL and AP transactions. If you do not post in audit, you can not perform these functions.AP is Posted GL is Posted</p> <p>$1 $4 7.50 $12.50</p> <p>Example #2: Post in detail Audit for Expense and Cash No Audit for Liabilities and Discounts</p> <p>GL Journal created for invoices: Account Description 1-200 Cr Liability Summary 1-500 Expense - #ABC 1-500 Expense - #ABC 1-500 Expense - #XYZ 1-500 Expense - #XYZ</p> <p>Debit $10 $40 $75 $125</p> <p>Credit $250</p> <p>GL Journal created for Payments: Account Description Debit 1-100 Cash - #101 1-100 Cash - #101 1-100 Cash - #102 1-100 Cash - #102 1-200 Liability Summary $250 1-700 Discount Summary</p> <p>Credit $9 $36 $67.50 $112.50 $25</p> <p>gl_batches</p> <p>Step 2 - Submit Journal Import At this point, AP has completed its portion of the posting process and the GL needs to complete the second portion: importing the accounting transactions into the GL system. When running the AP Transfer to GL process, the Journal Import process can be initiated from either the GL system or the AP system. If the option "Submit Journal Import" is equal to YES, once the AP transfer is complete the Journal Import program is</p> <p>gl_interfac...</p>

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