Period-End Processing in Oracle Inventory (Release 11i)

updated Dec 7, 2007 5:11 am | 35,972 views

Contents

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1 Introduction
1.1 Business Requirements
2 Steps
2.1 Procedures
2.1.1 Complete All Transactions for the Period Being Closed
2.1.2 Check Inventory and Work in Process Transaction Interfaces
2.1.3 Check Oracle Order Management Transaction Processes
2.1.4 Review Inventory Transactions
2.1.5 Balance the Perpetual Inventory
2.1.6 Validate the Work in Process Inventory
2.1.7 Transfer Summary or Detail Transactions
2.1.8 Close the current Oracle Payables and Oracle Purchasing Periods
2.1.9 Close the Current Inventory Period
2.1.10 Open the Next Inventory Period
2.1.11 Run Standard Period-End Reports (Optional)
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Introduction
The procedures for performing period-end processing in Oracle Inventory Release 11i.
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Business Requirements
The period close process for Oracle Inventory enables summarising of costs related to inventory and
manufacturing for a given accounting period. These costs are then transferred to the General Ledger for
posting.
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Steps
Oracle Inventory and Oracle Cost Management provide the required features to effect the necessary
period-end procedures to:

Reconcile the inventory and work in process costs and values.

Transfer inventory and manufacturing costs to the General Ledger.
Transfer summary or detail accounting information to the general ledger.
Independently open and close periods for each inventory organisation.
Perform interim transfers to the General Ledger without closing the period.
Maintain the same set of periods and fiscal calendar as for the General Ledger.
Attention: For period-end adjustment purposes, it may be appropriate to hold more than one period open
per inventory organisation at the same time, although at other times, having only one period open at a
time ensures that transactions are correctly dated and posted to the correct accounting period.

Procedures
The following steps are taken in performing period-end processing for Oracle Inventory:

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Complete All Transactions for the Period Being Closed

Ensure that all issues, receipts, and adjustments have been entered and verify that no hard copy records
exist or are awaiting data entry, e.g. packing slips in receiving.
Optional Report - Cycle Count Report
This report will highlight any unconfirmed ad-hoc Stocktakes.
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Check Inventory and Work in Process Transaction Interfaces

Check the Interface Managers window to ensure that there are no background or concurrent programs
unprocessed.
Check all three selections, Transactions Interface, Internal Transactions, and Demand Interface, and fix
any rejected transactions.
The interface managers that need to be run are as follows:

Material Transaction Manager

Material Cost Transaction
Move Transaction Manager
Resource Cost Transaction Manager
Check the Reservation Managers window
Demand Reservation Manager
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Check Oracle Order Management Transaction Processes

Ensure all sales order (Pick Release) issues through Oracle Order Management have been completed
and transferred successfully to Oracle Inventory.
Attention : If orders have not been released, they do not have to be completed.
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Review Inventory Transactions

Before closing a period, review all of the transactions for the period that have a high dollar value and/or a
high transaction quantity. Verify that the correct accounts have been charged. Correcting incorrect
account charges before closing the period is easier than writing manual journal entries to resolve them
later.
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Balance the Perpetual Inventory

Check that the perpetual inventory value up to the end of the period being closed matches the value
reported in the General Ledger. This balancing is usually effected automatically, but one of the following
three sources may create a problem:

Other inventory journal entries

Journal entries from products other than Oracle Inventory, that update the inventory accounts.

Charges to improper accounts

For example, material issued from a sub-inventory to a miscellaneous account, but one of the subinventory accounts was used as that miscellaneous account.

Transactions after period end reports

This occurs when the period-end inventory valuation reports are submitted before all transactions for the
period have been completed.
Use the Historical Inventory Balance Report to obtain period valuation information before the extra
transactions.
The following reports can be run to help with these reviews:

Inventory Value Report

Use the Inventory Value Report to show quantity, valuation, and detailed item information for the subinventories specified.

Period Close Value Summary Report

Use the Period Close Value Summary to see summary balances for sub-inventories. If you run this report
for a closed accounting period, the report displays the sub-inventory values at the end of that period. If you
run the report for an open period, the report displays the sub-inventory value at the point in time you run
the report. You can see more sub-inventory balance detail by running the Inventory Value Report, or the
Elemental Inventory Value Report.

Material Account Distribution Detail Report

Use the Material Account Distribution Detail Report to view the accounts charged for inventory
transactions. Review inventory transaction values transferred to the general ledger by GL batch.

Material Account Distribution Summary Report

Use the Material Account Distribution Summary report to review inventory accounting activity. If you detect
unusual accounts or amounts, use the Material Account Distribution Detail report to print the transaction in
detail.
Use the Material Account Distribution Summary Report to verify inventory account activity against
inventory valuation increases or decreases for the accounting period. Finally, use this report to reconcile
an account across several periods.
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Validate the Work in Process Inventory

If Oracle Work in Process is installed, check the work in process inventory balances against transactions
with the WIP Account Distribution Report, by summary or detail.
The WIP Account Distribution Report details account information for work in process cost transactions,
including resource, overhead and outside processing charges, cost updates, and period close and job
close variances. The system groups your transactions by job or schedule, by transaction type, and orders

your transactions by earliest transaction date. You can list detailed account information for specific
accounts, general ledger batches, or both to help you reconcile your general ledger.
This report does not list material cost transactions such as issues, completions, and scrap. You can list
this information using the Material Account Distribution reports in Oracle Inventory.
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Transfer Summary or Detail Transactions

If time permits, run the Transfer transactions to GL process up to the period end date before closing the
period. Closing a period automatically executes the general ledger transfer, but the process can be run
without closing the period, using the General Ledger Transfer window. Since a period, once closed,
cannot be reopened, running this process prior to closing the period facilitates proofing of the interfaces
transactions, and any adjustments to the period can be made via new inventory transactions as required.
Attention: The Transfer transactions to GL Process must be run for each Inventory Organisation.
Attention: If this step was by-passed, and the period was closed, a GL Transfer would automatically be
initiated, but no adjustments to that period could then be entered, since transactions cannot be posted to a
closed period, and a closed period cannot be re-opened.
View the General Ledger Transfer History to ensure that all transactions have been successfully
transferred to the General Ledger. Navigate to the General Ledger Transfer window and search for all
transfers with a status of Error.
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Close the current Oracle Payables and Oracle Purchasing Periods

Complete all steps required to close Oracle Payables and Oracle Purchasing. Oracle Payables is closed
prior to Oracle Purchasing to enable running of purchase accruals to accrue expenses on un-invoiced
receipts.
If Oracle Purchasing or Oracle Inventory are closed, a receipt cannot be entered for that period. However,
as a manual procedure, Oracle Purchasing should be closed before Oracle Inventory.
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Close the Current Inventory Period

Closing the inventory period using the Inventory Accounting Periods window automatically transfers
summary transactions to the general ledger interface table.
Attention: This process needs to be actioned for each Inventory Organisation defined.
Prior to closing the inventory period, click on the Pending button to display pending transactions. This will
display transactions under the following statuses:
Resolution Required: displays the number of unprocessed material transactions, uncosted material
transactions, and pending WIP costing transactions existing in this period. These must be resolved before
the period is closed.

Resolution Recommended: Displays the number of pending receiving transactions, pending material
transactions, and pending shop floor move transactions existing in this period. You can close the
accounting period, however, after it is closed these transactions cannot be processed.
The period close performs the following:

Closes the open period for Oracle Inventory and Oracle Work in Process.
Creates summary or detail inventory accounting entries in the GL interface.
Creates summary or detail work in process accounting entries in the GL interface.
Calculates period-end sub-inventory balances.
For each sub-inventory, the period close period adds the net transaction value for the current period to the
previous periods ending value. This creates the period-end value for the current period. The period-end
values by sub-inventory can be viewed via the Period Close Enquiry form, or reported with the Period
Close Summary Report.
The period close process automatically transfers all job costs and variances by general ledger account.
Discrete jobs and certain non-standard jobs are closed separately. Job close performs the necessary
accounting for each job, including variance calculations. For expense non-standard jobs, the period close
process writes off any remaining balances and transfers any period costs to the general ledger.
Warning: Closing an inventory period permanently closes the period and no further transactions can be
charged to that period.
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Open the Next Inventory Period

Open the next inventory period using the Inventory Accounting Periods window.
Attention: This process needs to be actioned for each Inventory Organisation defined.
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Run Standard Period-End Reports (Optional)

Inventory Value Report
Reconcile Oracle Inventory with the General Ledger.