Purchasing

Accruals
White Paper

Oracle
Online
An Oracle
July 2014

Online Accruals Setup and Usage

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Purpose, Scope and Application

Introduction

Over view of Accruals and Accrual Accounting

Types of Purchase Accruals

Modules Involved in Oracle Application

Prerequisites

R12 Accrual Reconciliation Process

Top Level view of Online Accruals Flow

Online Accruals with Expense Destination

Online Accruals with Inventory Destination

Online Accruals Setup

Oracle Purchasing

Enable Accrue on Receipts at Purchasing Options

Expense AP Accrual Account setup

Setup selects Accrual Account

Define Receiving Inventory Account

Oracle Inventory Management

Define Inventory AP Accrual Account

Define Invoice Price variance Account

Programs and Reports used for Online Accrual process

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Programs used for Online Accrual process

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Accrual Reconciliation Load Run Program

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Create Accounting-Receiving program

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Create Accounting-Cost Management program

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Transfer Journal Entries to GL

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Reports used for Online Accrual process

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AP and PO Accrual Reconciliation Report

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Miscellaneous Accrual Reconciliation Report

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Summary Accrual Reconciliation Report

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Accrual Write-Off Report

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Account Analysis Report

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Accruals write offs process

Online accrual accounting flows in purchasing, payable and
general ledger

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Online Accrual Accounting flow with Expense Destination

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Online Accrual Accounting flow with Inventory Destination

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Accrual write-off accounting flows

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Important tables used in online accrual process

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SECTION 1 PURPOSE, SCOPE AND APPLICATION

This white paper is intended to aid users in verifying common setup steps and
provide usage relating to accrual methods and processes, involved in Release 12
(R12). The document takes users through a complete cycle of Online Accruals
covering all relevant aspects.
This white paper is intended for all users, consultants and support analysts of
the Oracle Procurement Application. Anyone using this document is expected to
have the basic knowledge of Oracle Application setup steps and a firm
understanding of accounting principles, apart from having a basic knowledge of
SQL*Plus.

SECTION 2 INTRODUCTIONS
This section is to provide a broad overview of the Online Accrual and Online
Accrual accounting process in R12. It also provides explanations of common
terms and concepts to include accrual, accrual accounting, types of purchase
accruals in Oracle Applications and the modules involved.

2.1

Overview of Accruals and Accrual Accounting

Accruals are an accumulation of expense that is recognized before cash is paid
or accruals can be liabilities to pay for goods or services that have been
received, but have not been paid or invoiced.
Accrual accounting is recognition of revenue when earned and expenses when
incurred, even though cash has not been received or paid.
An example of a typical Accrual process: I have employees that earn money
through the end of July. Their actual pay date is not until August 5th. So at the
end of July I would accrue the money the employees have earned but not been
paid, to accurately reflect expenses in my financial statements.
At the
beginning of the next period I would reverse the accrual. When the employees
get paid on the 5th, the entire amount of the payroll would then hit actual
expenses.

2.2

Types of Accrual Methods in Purchasing.

There are two types of Accrual methods used in Purchasing:
1. Accrue on Receipt also known as Online Accruals or Perpetual Accruals
2. Accrue at Period End also known as Period End Accruals or Periodic
Accruals
Accrue on Receipt:
Accrue on Receipt means that when a receipt is saved, accrual transactions are
immediately recorded in the receiving subledger or inventory subledger based
on the item type. The Create Accounting process then must be submitted
separately to generate the receipt accounting in the Subledger Accounting
(SLA) and the General Ledger (GL). This is also known as online accruals or
perpetual accruals.
All items with a destination type inventory and outside processing, are accrued
on receipt. For items with a destination type of expense, the option of accruing
on receipt or at period end is available. This depends upon the business
requirement of the organization.
The AP and PO Accrual Reconciliation report, Miscellaneous Accrual
Reconciliation report or the Summary Accrual Reconciliation report are used to
view online accruals. These reports are used to reconcile an online accruals
balance within the GL.
Accrue at Period End:
Accrue at Period End means that when a receipt is saved, the accrual
transactions are not immediately recorded and sent to SLA and the GL. The
accounting entries are generated at the end of the month by running the
Receipt Accrual Period-End program followed by the Create Accounting process,
which must be submitted separately to generate the receipt accounting in SLA
and the GL. This is also known as Period End accruals or Periodic Accruals.
For items with a destination type of Expense the Receipt Accrual-Period End
process can only be used. Expense items typically are not accounted for on a
daily basis. Most companies find it easier to account for and reconcile these
expenses at month-end rather than at the time each individual expense is
incurred. The Uninvoiced Receipts report should be used to view period-end
accruals. This report is used to reconcile period end accruals with the GL.

2.3

Modules Involved in Oracle Application

The online accrual accounting involves the following modules:

2.4

Oracle Purchasing

Oracle Payables

Oracle Inventory

Oracle Cost Management - SLA

Oracle General Ledger

Prerequisites
The pre-requisites to enable Online Accruals are as follows:

2.5

Installation of required modules

Define Expense Accounts Payable (AP) accrual account and Inventory AP

accrual account in the GL module

Create a Subledger Accounting Method (SLAM)

Assign the correct SLAM to the Ledger

Enable Online Accruals at Purchasing Options

R12 Online Accrual Reconciliation Process

In R12 the Online Accrual process must be carefully reviewed before
implementation. There are different components involved in the process. Each
component performs a separate action in moving and verifying the transactions
from
the
Purchasing
tables
to
the
Receiving
Subledger
(rcv_receiving_sub_ledger) to SLA and finally to the GL.
After completing the receipt transactions and invoice matching, the create
accounting program must be run in final mode along with the subsequent
transfer of entries to the GL, after which the accrual reconciliation process must
be started.
Submit the Accrual Reconciliation Load Run program with
transaction date as the parameter to populate the data in the tables
cst_reconciliation_summary,
cst_ap_po_reconciliation
and
cst_misc_reconciliation. Then run the Accrual Reconciliation report for the
operating unit to start the reconciliation process

Description: Figure 1 displays the Accrual reconciliation process

SECTION 3 TOP LEVEL VIEW OF ONLINE ACCRUAL FLOW IN R12

3.1

R12 Online Accruals with Expense Destination

If a Purchase Order (PO) which is set to online accruals (accrue at receipt) is
received and delivered to an expense destination, receipt accounting happens in
the receiving subledger for both receive and deliver transactions. Then submit
the Create Accounting process manually to generate the receipt accounting in
SLA and the GL. This receipt accounting includes encumbrance reversal entries
if the PO is encumbered; otherwise, it will just include the actual entries.
Technically when a PO is set to online accruals (accrue on receipt) and is
received, the Receiving Transaction processor generates the accounting entries
in the receiving subledger rcv_receiving_sub_ledger upon receipt and delivery
of the PO. Then the create accounting should take place to create the SLA
journals which will insert records into the tables xla_ae_headers and
xla_ae_lines. These accounting entries will be available in the table
xla_ae_lines. The event type code in xla_ae_headres for these actual entries will
be RECEIVE for receipt accounting and DELIVER_TO_EXPENSE for delivery
accounting. The SLA journals can be transferred to the GL with the parameters
'Transfer to GL' and 'Posting in GL' as Yes when submitting the Create
Accounting program.

Description: Figure 2 displays the top level accrual accounting flow for expense destination
PO

3.2

R12 Online Accruals with Inventory Destination

If the PO which is set to online accruals (accrue at receipt) is received and
delivered to an inventory destination, receipt accounting happens in the
receiving subledger and the delivery accounting happens in the inventory
subledger. Then the Create Accounting process must be submitted manually to
generate the receipt accounting in SLA and the GL. This receipt accounting
includes encumbrance reversal entries if the PO is encumbered; otherwise, it

only includes the actual entries. Technically, when a PO is set to online accruals
(accrue on receipt) and the inventory destination is received, the Receiving
Transaction Processor generates the accounting entries in the receiving
subledger (rcv_receiving_sub_ledger) for the receive transactions and in
inventory subledger (mtl_transaction_accounts) for the deliver transactions.
Then create accounting should take place to create the SLA journals which will
insert records into tables xla_ae_headers and xla_ae_lines. These accounting
entries will be available in the table xla_ae_lines. The event type code in
xla_ae_headres for these actual entries will be RECEIVE for receipt
accounting and PO_DEL_INV for delivery accounting. The SLA journals can be
transferred to the GL with parameters 'Transfer to GL' and 'Posting in GL' as
Yes while submitting the Create Accounting program.

Description: Figure 3 displays the top level accrual accounting flow for inventory
destination PO

SECTION 4

ONLINE ACCRUALS SETUP

In Release 12, it is imperative that each of the following accounts used in the
online accrual process are set with separate and distinct accounts. The
following setups are used in the online accrual process:

Enable Accrue on Receipts at Purchasing Options

Expense AP Accrual Account

Setup Select Accrual Account

Receiving Inventory Account

4.1

Inventory AP Accrual Account

Invoice Price Variance Account

Oracle Purchasing
4.1.1 Enable Accrue on Receipts at Purchasing Options Setup
Navigate from the Purchasing Responsibility to
Setup>Organization>Purchasing Options>Accrue Expense Item At receipt and
Accrue Inventory Item At receipt

Description: Figure 4 displays the online accrual setups at Purchasing Options

4.1.2 Expense AP Accrual Account Setup

Setup a GL account to accumulate the expense AP accrual for Purchasing. This
is the account used by Purchasing to accrue AP liability for expense items at
time of receipt, when the expense accrual option is at receipt or at period-end.
Navigate from the Purchasing Responsibility to
Setup>Organization>Purchasing Options>Expense AP Accrual Account

Description: Figure 5 displays the Expense AP Accrual Account setups at Purchasing

Options

4.1.3 Select Accrual Account Setup

Navigate from the Purchasing Responsibility to Accounting>Accrual WriteOffs>Select Accrual Accounts

Description: Figure 6 shows defining the accrual account in the Select Accrual Accounts
form

4.1.4 Define Receiving Inventory Account

Enter the GL account to record the current balance of material in receiving and
inspection.
Navigate from the Purchasing Responsibility to Setup>Organization>Receiving
Options>Select the Organization>Receiving Inventory Account

Description: Figure 7 displays the Receiving Inventory Account setup at Receiving

Options

4.2

Oracle Inventory
4.2.1 Define Inventory AP Accrual Account
Setup a GL account to accumulate the inventory AP accrual for this
organization. This is the account used by Purchasing to accrue payables liability
when items are received. This account represents the uninvoiced receipts and is
usually part of the AP liabilities in the balance sheet. Payable relieves this
account when the invoice is matched and approved.

Navigate
from
the
Inventory
Setup>Organization>Parameters>Other Accounts

Responsibility

to

Description: Figure 8 displays the Inventory AP Accrual Account setups at Organization

Parameters

4.2.2 Define Invoice Price Variance Account

The Invoice Price Variance account is used to accumulate invoice price variance
for the organization. This is usually an expense account. Invoice price variance
is the difference between the PO price for an inventory item and the actual
invoice. When Payables creates accounting entries for the invoice, it uses the
invoice price variance account from the PO to record invoice price variance
entries.

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Navigate from the Inventory Responsibility to Setup>Organization

Parameters>Other Accounts

Description: Figure 9 displays the Invoice Price Variance Account setups at Organization
Parameters

SECTION 5 PROGRAM AND REPORTS USED FOR ONLINE ACCRUAL

PROCESS
5.1

Programs Used for Online Accrual Process

5.1.1

Accrual Reconciliation Load Run Program

The Accrual Reconciliation Load Program is the counterpart of the Rebuild

manager in Release 11i. The Accrual Reconciliation Load Program populates the
reconciliation tables with all necessary transaction data needed to perform the
reconciliation process. All the affected PO distributions within the date range
will be deleted first and updated to the current values for the date range given
in the Accrual Load Program. A record is inserted into the table
cst_reconciliation_build each time the Accrual Reconciliation Load run program
is submitted.
The program populates the data into the tables cst_ap_po_reconciliation,
cst_reconciliation_summary,
cst_misc_reconciliation
and
cst_reconciliation_build. In an R12 upgraded instance the From Date specified
is ignored and it is run from the start of the transaction history. Write off
transactions from 11i will be upgraded and loaded into the cst_write_offs and
cst_write_off_details tables.
Accrual Reconciliation Load Run Program data flow:

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Description: Figure 10 displays the Accrual Reconciliation Load run program data flow

5.1.2

Create Accounting-Receiving Program

The Create Accounting-Receiving process has to be submitted manually to

generate the receipt accounting in SLA and the GL. Create AccountingReceiving belongs to the Purchasing module added to Cost Management to
process the transactions from the receiving subledger to SLA and the GL. The
process only accounts for expense destination PO receipt. Create AccountingReceiving is a wrapper that includes an additional parameter application id
needed for the entire Supply Chain Management system and various
applications.

5.1.3

Create Accounting-Cost Management Program

Create Accounting-Cost Management is owned by the Cost Management module

to process the transactions from various subledgers to SLA and the GL. The
Create Accounting-Cost Management request has to be submitted manually to
transfer the subledger journal entries to SLA and the GL. The program creates
accrual journal entries, accrual reversals, and multi-period journal entries in
SLA. The following process categories are considered by the Create AccountingCost Management program:
Inventory
Manual
Receiving
Third Party Merge
Work in Process (WIP)
Create Accounting - Cost Management process the following sources of
transactions which includes:
Expense destination PO Receipt
All Inventory transactions including inventory destination Pos
WIP transactions

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Accrual Write Off transactions

5.1.4 Transfer Journal Entries to GL Program

Transfer Journal Entries to GL program is owned by the General Ledger module.
This program transfers the accounting entry from SLA to the GL (which are in
Final mode in SLA and not yet transferred to GL). The program should be
submitted from each application to transfer the journal from SLA to the GL.

5.2

Reports used for Online Accrual Process

The Accrual Reconciliation report is used to analyze the balance of the AP
accrual accounts. To submit this report, Oracle Purchasing and Payables must
be installed. Both expense and inventory purchases can be accrued as they are
received. Once the receiving is complete, record a temporary AP liability to the
Expense or Inventory AP accrual accounts. When Oracle Payables creates
accounting entries for the invoice, Payables clears the AP accrual accounts and
records the liability from the supplier site. The Accrual Reconciliation report
can be run anytime with the date parameter to view the accrual balance. After
the receipt transactions have been entered and matched to invoices, run the
Accrual Reconciliation report for any transaction date range and identify any
differences between the PO receipts and AP invoices. The following reports are
used in the online accrual process:

Summary Accrual Reconciliation report

AP and PO Accrual Reconciliation report

Miscellaneous Accrual Reconciliation report

Accrual Write-Off report

Account Analysis report

5.2.1

AP and PO Accrual Reconciliation Report

The purpose of this report is to show all Oracle AP and PO transactions where
the AP transactions are matched to a PO (this could be a receipt as well). The
AP and PO Accrual Reconciliation report provides a transactional breakdown of
each accrual account with a net balance not equal to zero in a summarized or
full transaction details version. In summarized mode, for each accrual account
only the distribution information and PO, AP, Write-Off (WO) and Total Balances
are displayed. For detailed mode, the individual transaction details for each
distribution are also shown.
This report picks data from the table cst_ap_po_reconciliation which gets
populated during the load run process. While running this report, the system
prompts to enter the following parameters:

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Operating Unit
Select the operating unit for the report
Title
Enter a title for the report
Aging Period Days
Number of days by which group transactions are sorted in descending order
Item From
Lower limit of item range to consider for this report
Item To
Upper limit of item range to consider for this report
Vendor From
Lower limit of vendor range to consider for this report
Vendor To
Upper limit of vendor range to consider for this report
Min Outstanding Balance
Lower limit of distribution balance to display
Max Outstanding Balance
Upper limit of distribution balance to display
Balancing Segment From
Lower limit of balancing segment range to consider for this report
Balancing Segment To
Upper limit of balancing segment range to consider for this report

5.2.2

Miscellaneous Accrual Reconciliation Report

The purpose of this report is to show all inventory and AP (not matched to PO)
transactions that have hit the accrual accounts. Transactions are grouped by
accrual code. The report can be run either in summary where only the
distribution information and balance is shown or in detail where all the
transaction that makes up a particular distribution, are shown. Accrual amount
will be displayed for each transaction along with the source whether it is
inventory or AP. This report picks data from the table cst_misc_reconciliation
which gets populated during the load run process. While running the report, the
system will prompt to enter the following parameters:

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Operating Unit
Select the operating unit for the report
Title
Enter a title for the report
Sort By
Parameter to specify how to sort the data at the distribution level (independent
of Summarization parameter)
Valid Values
Item, Transaction Date (default), Amount
Date From
Starting date of time period to display for this report
Date To
Ending date of time period to display for this report
Item From
Lower limit of item range to consider for this report
Item To
Upper limit of item range to consider for this report
Min Amount
Lower limit of transaction amount to display
Max Amount
Upper limit of transaction amount to display
Balancing Segment From
Lower limit of balancing segment range to consider for this report
Balancing Segment To
Upper limit of balancing segment range to consider for this report

5.2.3

Summary Accrual Reconciliation Report

The Summary Accrual Reconciliation report can be used to analyze the balance
of the AP accrual accounts. Both expense and inventory purchases can be
entered as they are received. When this happens, temporarily an AP liability
record is entered to the Expense or Inventory AP accrual accounts. When Oracle
Payables creates the accounting for the matched and approved invoice, Payables
clears the AP accrual accounts and records the liability from the supplier site.
The Accrual Reconciliation report helps monitor potential problems with
purchasing and receiving activities that can affect the accuracy of the AP
accrual accounts. It displays the balance of each accrual account as well as
partial representation of the source of the balance. This report picks data from

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the table cst_reconciliation_summary which is populated during the load run

process. While running this report, the system prompts to enter the following
parameters:
Operating Unit
Select the operating unit for the report
Title
Enter a title for the report
Balancing Segment From
Lower limit of the balancing segment range for the report to consider
Balancing Segment To
Upper limit of the balancing segment range for the report to consider

5.2.4

Accrual Write-Off Report

The Accrual Write-Off report provides supporting detail for write-off journal
entries. The process is as follows. First, analyze the Accrual Reconciliation
report for transactions that should be expensed out of the accrual accounts.
After researching the reported accrual balances, then use the Accrual Write-Off
window to indicate which entries should be removed and written off from this
report. Then after the entries have been written off, use the Accrual Write-Off
report as supporting detail for manual journal entry.
The report displays transactions from PO receipts and AP invoices. Purchasing
and Payables must be installed to run this report. If Inventory or Work in
Process is installed, the Accrual Write-Off report also displays any inventory or
work in process transactions that have been written off. This report picks data
from the cst_write_offs table which is populated during the load run process.
While running this report the system prompts to enter the following parameters:
Operating Unit:
Select the operating unit for the report
Title:
Enter the title for this run of the report
Balancing Segment From
Lower limit of balancing segment range to use for this report
Balancing Segment To
Upper limit of balancing segment range to use for this report
Minimum Write-Off Amount
Lower limit of amount range to use for this report
Maximum Write-Off Amount

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Upper limit of amount range to use for this report

Write-Off Dates From
Enter the beginning GL date. Usually, this is the beginning date of the
accounting period
Write-Off Dates To
Enter the ending GL date. Usually, this is the ending date of the accounting
period
Write-Off Reason
Enter a specific write-off reason
Sort By
Select a value to determine how to sort write-off transaction data

5.2.5

Account Analysis Report

The Account Analysis report lists the accumulated balances of a range of

accounts and all journal entry lines that affect that range. This report prints the
journal entry lines and beginning and ending balances of the accounts
requested. For each journal entry line, the report prints the source, category,
batch name, journal entry name, account, description, entry/line/source item
reference information, and the debit or credit amount. While running this report
the GL prompts to enter the following parameters:
Type
Choose Entry Item to generate a report showing EXTERNAL_REFERENCE
from the GL_JE_HEADERS table. This reference appears only if one was
provided in the Enter Journals form or if Journal Import was used. Choose Line
Item to generate a report showing REFERENCE_1 from the GL_JE_LINES table.
Choose Source Item to generate a report showing REFERENCE_4 from the
GL_JE_LINES table. These references appear only if Journal Import was used
and a journal voucher number is included, an invoice date and number, or some
other source document information to help identify the origin of this journal
entry was entered.
Currency
Choose the functional currency for the set of books
Balance Type
Choose to report on Actual, Budget, or Encumbrance balances. If budget
balances are selected, then choose the Budget Name on which to report. If
encumbrance balances are selected, choose the Encumbrance Type on which to
report.
Starting/Ending Period
Choose the accounting period range for the report. GL starts a new page for
every period in the range.

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Flex field From/To

Enter the account range for the report
Order By
Choose to sort the journal entry lines of the report by Account Segment,
Balancing Segment, or Source name.

SECTION 6

ACCRUAL WRITE-OFF PROCESS

Purchasing records an AP liability to an AP accrual account for goods received

but not invoiced. When Payables matches and approves the invoice for the
received goods, Payables clears the AP accrual account and records the actual
liability amount to the invoice AP liability account. It may be desired to reconcile
those transactions that leave some balance (liability) in accrual accounts. This
can be done with the accrual reconciliation process.
The following flow diagram illustrates the flow for the accrual reconciliation and
the accrual write-off:

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Description: Figure 11 displays an overview of the Accrual Write-off process

After receipt transactions have been entered and AP invoices have been
matched and approved, run the accounting process that creates the accounting
for these transactions in the final mode which subsequently transfers the
transactions to the GL. The accrual reconciliation process can then be started
by running the Accrual Reconciliation Load program. This program is used to
populate the accrual reconciliation table with all necessary transaction data to
perform the reconciliation process.
The AP and PO Accrual Reconciliation report provides a transactional
breakdown of each accrual account with a net balance greater than zero in a
summarized or full transaction details version. The AP and PO Accrual WriteOffs window is used to indicate which AP and PO transactions should be written
off and removed from the AP and PO Accrual Reconciliation report.
The Miscellaneous Accrual Reconciliation report provides reporting of all
miscellaneous AP (not matched to PO or PO receipts) and Oracle Inventory
transactions hitting accrual accounts. Use the Miscellaneous Accrual Write-Offs
window to indicate which miscellaneous AP (not matched to PO) and Oracle
Inventory transactions should be written off and removed from the
Miscellaneous Accrual Reconciliation report.
The following steps can be used to perform the write off transaction:

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Use the Select Accrual Accounts window to verify or define all the
accrual accounts to be used when loading accrual data.

Run the Accrual Reconciliation Load Run program.

Run the Summary Accrual Reconciliation report to find out which

accounts have balances and the amount of those balances.

If a balance is in AP and PO transactions, run the AP and PO Accrual

Reconciliation report.

If a balance is in other types of transactions, run the Miscellaneous

Accrual Reconciliation report.

Examine the transactions.

If AP and PO transactions exist where there is an AP invoice matched to a

PO or a PO receipt, use the AP and PO Accrual Write-Offs window to view
the transactions by PO distribution.

Otherwise use the Miscellaneous Accrual Write-Offs window to view the

transactions.

Choose those transactions that are candidates for write-off and perform
the write off.

Use the View Write-Off Transactions window to see the write-off

transactions. Write-off transactions can also be reversed from this
window.

Run the Accrual Write-Off report to see the history of write-off

transactions.

Run the Summary Accrual Reconciliation report to make sure that the
Receiving balanced accounts do not appear in the report.

Once the accrual entries for the PO or invoice are shown in the Accrual
Reconciliation report, an Accrual Write-off can be done using the Cost
Management or Purchasing responsibility>Accounting>Accrual write offs>AP
and PO. This will delete the accrual entry from the cst_ap_po_reconciliation
table and populate the write off transaction into the cst_write_offs table. This
write off transaction can also be viewed in the form View Write offs. Accounting
entries have to be created in SLA and the GL for these write off transactions by
submitting the Create Accounting program. This can be viewed in SLA by
navigating to Tools > View Accounting in the View Write offs form.
The following accounting entries happen for write off against RECEIVE
transactions:
Accrual a/c DR
Offset a/c CR
Similarly for an AP PO MATCH transaction
Accrual a/c CR
Offset a/c DR
This Offset a/c will always be the Invoice Price Variance account.
Accounting events for write off transactions will show the Event status as "Final
Accounted" once the Create Accounting program is submitted and the entries
are transferred to the GL. In Release 11i accounting will not get created for the
write off transaction and accrual entry has to be manually adjusted in GL. In
R12, the Create Accounting program will create the accrual entry for the write
off transaction in SLA as well as in the GL and hence manual adjustment of
accrual entry is not required.

SECTION 7 ONLINE ACCRUAL ACCOUNTING FLOWS IN

PURCHASING, PAYABLES AND GENERAL LEDGER
This section will explain online accrual accounting flow for the expense
destination PO.

7.1

Online Accrual Accounting Flow with Expense Destination

1. Create PO screen
Create a PO with an expense item. The Accrue at Receipt flag gets checked
automatically in the PO shipment, since the Accrue expense Item At receipt is
set at purchasing option. The Expense AP Accrual account (in the example
below Account: 01-000-2220-0000-000) set in the Purchasing Options gets
defaulted to the PO distribution. For inventory items, the Inventory AP accrual
account will get defaulted to the PO distribution from the Organization

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Parameters>Other Accounts setup. For a PO with an expense destination the

expense AP accrual account should be considered for reconciliation; whereas for
inventory destination, inventory AP accrual account should be considered for
accrual reconciliation.

Check the PO headers data in po_headers_all

Standard PO will be created with authorization status as approved. The PO
number will be stored in the segment1 column. The PO header id from this table
can be used to retrieve data from other PO tables.

Check the PO shipment in po_line_locations_all

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PO shipment will be created with accrue on receipt flag as Y, in our example

below with quantity (100) and quantity billed (0). Accrue at Receipt flag will be
Y since the Accrue expense Item At receipt is set at purchasing option.

Check the PO distribution in po_distributions _all

PO distributions will be created with accrue on receipt flag as Y and quantity
ordered 100. The expense AP accrual account will be stored in the
code_combination_id column.

2. Receipt Screen
Perform a receipt against the PO. In the example below Receipt Number 8512
was generated.

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Check the receipt data in rcv_transactions

This receiving table will show a quantity of 100 received against the PO. The
value of transaction_id in this table will be the same as rcv_trnsaction_id in the
rcv_receiving_sub_ledger table. The value of transaction_id can be used to
retrieve the data in the rcv_receiving_sub_ledger table.

3. Receiving Transaction Summary > Tools > View Accounting

The moment a receipt transaction is completed, receipt accounting will be
created in the receiving subledger for both receive and deliver transactions, for
POs with expense destinations. When a PO is set to Accrue at Receipt the
Receiving Transaction Processor generates the accounting entries in the
rcv_receiving_sub_ledger table upon receive and delivery of the PO. For an
inventory destination PO, the receive transaction accounting will be created in
the receiving subledger, whereas the deliver transaction accounting will be
created in the inventory subledger.
The following accounting happens for Receive transactions:
Receiving Inventory account: 01-000-1410-0000-000
Expense AP accrual account: 01-000-2220-0000-000

23

DR
CR

237
237

4. Check the receipt accounting in rcv_receiving_sub_ledger

The receipt accounting will be created in the receiving subledger with Journal
Entry (JE) source as Purchasing and JE category as Accrual for the receive
transaction. The expense AP accrual account will get credited with 237 and the
Receiving Inventory account will get debited with 237. The accounting line type
will be Accrual for the expense AP accrual account and the accounting line
type will be Receiving Inspection for the Receiving Inventory account.
The value of rcv_sub_ledger_ id will be the same as the value of
source_distribution_id_num_1 in the xla_distribution_links table.
The
rcv_sub_ledger_ id can be used to link between the receiving subledger and SLA
data.

5. Create Accounting Receiving to transfer the journals from receiving subledger

to SLA and GL
Once the receipt accounting is generated in the receiving subledger, then the
Create Accounting-Receiving program has to be submitted manually to transfer
the journal from receiving subledger to SLA and GL. The Create AccountingReceiving program inserts the records into the tables xla_ae_headers,
xla_ae_lines and xla_distribution_links.

24

6. Verify the journals in SLA : Cost Management SLA responsibility >SLA >
Inquiry > Journal Entry Lines
These entries can be viewed from the SLA menu in the Cost Management
module.
Navigation from Cost Management-SLA to SLA >SLA: Inquiry > Accounting
event >Query by transaction dates and ledger name.

7. View Journal Entries in SLA

The Following accounting entries will be available in the HTML page.
Expense AP Accrual account CR
Receiving Inventory account DR

Check the receipt accounting in SLA (xla_distribution_links)

The value of source_distribution_id_num_1 in this table will be same as the
rcv_sub_ledger_id in the rcv_receiving_sub_ledger table. The accounting line
code will be ACCRUAL and the source distribution type will be
RCV_RECEIVING_SUB_LEDGER since the accrual transaction is transferred
from the receiving subledger. The value of ae_header_id from this table can be
used to query other SLA tables like xla_ae_headers and xla_ae_lines.

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Check the receipt accounting in SLA (xla_ae_headers)

The JE category name would be Receiving and event type code would be
Receive for the receive transaction accounting. The gl_transfer_status_code
will be Y since the accounting entries has been transferred to GL.

Check the receipt accounting in SLA (xla_ae_lines)

This table will show the accounting entries detail. The accounting class accrual
will get credited with 237; whereas the accounting class receiving inspection
will get debited with 237. The value of the gl_sl_link_id present in this table can
be used to link the GL tables.

8. View Journal Entries in GL

It is always preferred to do the transfer to GL and posting with the parameters
'Transfer to GL' and 'Posting in GL' as Yes while submitting the Create
Accounting program. After transferring the receipt journal to GL the accounting
entries can be seen in the following tables.
Check the receipt accounting in GL (gl_import_references)
The value of gl_sl_link_id in this table is the same as the value of the
gl_sl_link_id in the xla_ae_lines table. The je_header_id value should be used to
retrieve data from other GL tables like gl_je_headers and gl_je_lines.

26

Check the receipt accounting in GL (gl_je_headers)

The JE source will be updated to Cost Management and the JE category as
Receiving. In our example here the receipt accounting entry has been moved
to the GL in the Mar-14 period.

Check the receipt accounting in GL (gl_je_lines)

This table will provide the details of accounting information in the GL like code
combination id, posted status, accounted debit and accounted credit.

9. Run the Accrual Reconciliation Load Run program

The Accrual Reconciliation Load Program populates the reconciliation tables
with all the necessary transaction data needed to perform the reconciliation
process. It populates the data into the tables cst_ap_po_reconciliation,
cst_reconciliation_summary,
cst_misc_reconciliation
and
cst_reconciliation_build.

Check the receipt accounting in CST tables (cst_reconciliation_summary)

PO accrual balance credit amount (-237) will be shown against the PO
distribution id (580942). Since there in no accrual balance from the AP side
against the PO distribution, the AP accrual balance will be shown as zero.

27

Check the receipt accounting in CST tables (cst_ap_po_reconciliation)

PO accrual balance credit amount (-237) will be shown against the PO
distribution id (580942). Since there in no accrual balance from AP side against
the PO distribution, AP accrual balance will be shown as zero.

Check the receipt accounting in CST tables (cst_misc_reconciliation)

There should be no data in the cst_misc_reconciliation table since this report
does not consider the AP and PO accrual balance.

10. Run the AP and PO Accrual Reconciliation report

28

11. AP and PO Accrual Reconciliation report output

12. Run the Summary Accrual Reconciliation report

13. Summary Accrual Reconciliation report output

29

14. Inquiry Journals form shows the receipt journal

The receipt accounting entries can be viewed from GL once it is transferred
from SLA to the GL.
Navigate from the GL responsibility to Inquiry >Journal > Query by source,
ledger name, category and period.

15. Inquiry Journals form

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16. Create an Invoice against the PO

Check the PO shipment after Invoice is created (po_line_locations_all)

PO shipment will be updated to the quantity received 100 and quantity billed
100 after receive and invoice is completed against the PO shipment.

Check the PO distribution after Invoice is created (po_distributions_all)

31

PO distribution will be updated to the quantity billed 100 and amount billed 200
after the invoice is validated against the PO distribution.

17. Invoice data after Invoice Validation

Check the Invoice data after Invoice is created (ap_invoices_all)
The total invoice amount and invoice number information will be stored in the
ap_invoices_all table. In this case Invoice number 7148 was created with the
total invoice amount of 237.

Check the Invoice data after Invoice is created (ap_invoice_distributions_all)

The line type lookup code will be ACCRUAL for the invoice transaction. If any
non-recoverable tax is present then the line type lookup code will be
NONREC_TAX. The value of the invoice_distribution_id is the same as the
value of source_distribution_id_num_1 in xla_distribution_links. The value of
invoice_distribution_id from this table can be used to retrieve data from
xla_distribution_links.

18. Run Create Accounting from Payables

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Check the Invoice data in SLA (xla_distribution_links)

The value of the source_distribution_id_num_1 in this table will be same as the
inv_distribution_id in the ap_invoice_distributions_all table. The source
distribution type will be AP_INV_DIST since the accrual transaction is
transferred from the AP subledger. The value of ae_header_id from this table
can be used to query other SLA tables like xla_ae_headers and xla_ae_lines.

Check the Invoice data in SLA (xla_ae_headers)

The JE category name will be Purchase Invoices and the event type code will
be
INVOICE
VALIDATED
for
the
invoice
accounting.
The
gl_transfer_status_code will be Y since the invoice accounting entries has been
transferred to the GL.

Check the Invoice data in SLA (xla_ae_lines)

This table will show the detail level of the accounting entries. The accounting
class ACCRUAL will get debited with 237, whereas the accounting class
LIABILITY will get credited with 237. The value of gl_sl_link_id present in this
table can be used to link the GL tables.

19. Run the Accrual Reconciliation load run program after invoice is validated and
Create Accounting is run

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There should be no data in the Costing (CST) tables after the invoice is validated
and Create Accounting is run.

Check CST tables after Invoice is validated and load run is performed
(cst_reconciliation_summary)
There should be no data in the cst_reconciliation_summary.
Check CST tables after Invoice validated and load run is performed
(cst_ap_po_reconciliation)
There should be no data in the cst_ap_po_reconcilaition.

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Check CST tables after Invoice validated and load run is performed
(cst_misc_reconciliation)
There should be no data in the cst_misc_reconciliation.

20. The PO does not appear in the Accrual Reconciliation Summary report

21. The PO does not appear in the AP and PO Accrual Reconciliation report

7.2

Online Accrual Accounting Flow with Inventory Destination

If the PO is created with an inventory destination, the Inventory AP Accrual

account will be defaulted to the PO distribution from the Organization
Parameters/Other Accounts. The other accounting flows in Purchasing, Account
Payables and General Ledger module are the same as an expense destination
PO.
See section 7.1 Online Accrual Accounting flow with expense destination

SECTION 8

ACCRUAL WRITE-OFF ACCOUNTING FLOWS

This section will explain the accrual write-off accounting flow for the expense
destination PO.

35

1. Create PO screen
Create a PO with an expense item. The Accrue at Receipt flag gets checked
automatically in the PO shipment, since the Accrue expense Item At receipt is set
at purchasing option. The Expense AP Accrual account (in the example below
Account: 01-000-2220-0000-000) set in the Purchasing Options gets defaulted to
the PO distribution

Check the PO headers data in po_headers_all

Standard PO number will be created with authorization status as approved. The
PO number will be stored in the segment1 column. The PO header id from this
table can be used to retrieve data from other PO tables.

Check the PO shipment data in po_line_locations_all

PO shipment will be created with accrue on receipt flag as Y with quantity
ordered (100) and quantity billed (0).

Check the PO distribution data in po_distributions_all

The PO distribution will be created with accrue on receipt flag as Y and
quantity ordered (100). The expense AP accrual account (13402) defaulted to
the PO distribution from the Purchasing Options setup.

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2. Receipt Screen
Perform a receipt against the PO. In the example below Receipt Number 8541
was generated.

3. Receiving Transaction Summary > View Accounting

The moment a receipt transaction is completed, receipt accounting will be
created in the receiving subledger for both receive and deliver transactions, for
POs with expense destinations. When a PO is set to Accrue at Receipt the
Receiving Transaction Processor generates the accounting entries in the
rcv_receiving_sub_ledger table upon receive and deliver of the PO.
The following accounting happens for Receive transactions:

37

Receiving Inventory account: 01-000-1410-0000-000

DR

237

Expense AP accrual account: 01-000-2220-0000-000

CR

237

Check the receipt accounting data in rcv_receiving_sub_ledger

The receipt accounting will be created in the receiving subledger with JE source
as Purchasing and JE category as Accrual for the receive transaction. The
expense AP accrual account is credited with 237 and the Receiving Inventory
account debited with 237. The accounting line type will be Accrual for the
expense AP accrual account and the accounting line type will be Receiving
Inspection for the Receiving Inventory account.
The value of rcv_sub_ledger_ id will be the same as the value of
source_distribution_id_num_1
in
the
xla_distribution_links
table.
The
rcv_sub_ledger_ id can be used to link between receiving sub ledger and SLA
data.

4. Run the Create Accounting-Receiving program to transfer the subledger entry

to SLA and GL

38

Check the receipt accounting data in SLA (xla_distribution_links)

The value of the source_distribution_id_num_1 in this table will be the same as
the rcv_sub_ledger_id in the rcv_receiving_sub_ledger table. The accounting line
code will be ACCRUAL and RECEIVING_INSPECTION for the Accrual account
and receiving Inventory account respectively. The source distribution type will
be RCV_RECEIVING_SUB_LEDGER since the accrual accounting gets
transferred from receiving sub ledger. The value of ae_header_id from this table
can be used to query other SLA tables like xla_ae_headers and xla_ae_lines.

Check the receipt accounting data in SLA (xla_ae_headers)

The JE category name would be Receiving and event type code would be
Receive for the receive transaction accounting. The gl_transfer_status_code
will be Y since the accounting entries have been transferred to GL.

Check the receipt accounting data in SLA (xla_ae_lines)

This table shows the detail level of accounting entries. The accounting class
ACCRUAL would get credited with 237, whereas the accounting class
RECEIVING_INSPECTION would get debited with 237. The value of
gl_sl_link_id present in this table can be used to link the GL tables.

39

5. Run the Accrual Reconciliation Load Run program

The Accrual Reconciliation Load Program populates the reconciliation tables
with all necessary transaction data needed to perform the reconciliation
process. It populates the data into the tables cst_ap_po_reconciliation,
cst_reconciliation_summary,
cst_misc_reconciliation
and
cst_reconciliation_build.

Check the receipt accounting data in CST table (cst_ap_po_reconciliation)

PO accrual balance credit amount (-237) will be shown against the PO
distribution id (649950). Since there in no accrual balance from the AP side
against the PO distribution, the AP accrual balance will be shown as zero.

Check the receipt accounting data in CST table (cst_reconciliation_summary)

40

PO accrual balance credit amount (-237) will be shown against the PO

distribution id (649950). Since there in no accrual balance from AP side against
the PO distribution, AP accrual balance will be shown as zero.

Check the receipt accounting data in CST table (cst_write_offs)

There should be no data in the write-off tables since no write off transaction is
done.

6. AP and PO Accrual Reconciliation report output

7. Run the Summary Accrual Reconciliation report

41

8. Find AP and PO Writeoff Candidates screen

42

9. Run the Create Accounting-Receiving to transfer the write-off journal to SLA

and the GL

10.

43

Run the Accrual Reconciliation Load program after write-off transaction

Check the receipt accounting data in CST tables(cst_ap_po_reconciliation)

There should be no data in the cst_ap_po_reconciliation table after the write-off
has been completed, followed by the load run program.
Check the receipt accounting data in CST tables(cst_reconciliation_summary)
There should be no data in the cst_reconciliation_summary table after the writeoff has been completed, followed by the load run program.

44

11.

There is no data in AP and PO Accrual Reconciliation report

12.

There is no data in Summary Accrual Reconciliation report

Check the receipt accounting data in CST tables (cst_write_offs)

The transaction type code will be WRITE OFF for the transaction. The amount
will be shown against the corresponding PO distribution. The write-off amount
shown in this table will be shown in the Accrual Write-off report.

13.

View the write o-ff transactions in the View Write-Offs screen

Navigate from the Purchasing Responsibility to Accounting > Accrual Write Offs
> View Write-Offs

14.

View the write off transactions in the SLA screen

Navigate from the Purchasing Responsibility to Accounting > Accrual Write Offs
> View Write-Offs > Tools > View Accounting
The following accounting entries happen for write off against receive
transactions:
Expense AP Accrual account DR
237
Offset account
CR
237

45

46

15.

View Journal Entries

16.

View the write-off transactions in the Accrual Write-Off report

SECTION 9
PROCESS

IMPORTANT TABLES USED IN ONLINE ACCRUAL

This section lists the main tables involved in accounting transactions.

9.1

Purchasing Tables
PO_HEADERS_ALL
PO_LINES_ALL
PO_LINE_LOCATIONS_ALL
PO_DISTRIBUTIONS_ALL
RCV_TRANSACTIONS
RCV_RECEIVING_SUB_LEDGER

9.2

Account Payables Tables

AP_INVOICES_ALL
AP_INVOICE_DISTRIBUTIONS_ALL
AP_AE_HEADERS_ALL

9.3

SLA Tables
XLA_EVENTS
XLA_TRANSACTION_ENTITIES_UPG
XLA_DISTRIBUTION_LINKS
XLA_AE_HEADERS
XLA_AE_LINES
XLA_TRANSACTION_ENTITIES_UPG

9.4

Cost Management Tables

CST_RECONCILIATION_BUILD
CST_AP_PO_RECONCILIATION
CST_RECONCILIATION_SUMMARY
CST_MISC_RECONCILIATION
CST_WRITE_OFFS

9.6

General Ledger Tables

GL_JE_HEADERS
GL_JE_LINES
GL_JE_BATCHES
GL_IMPORT_REFERENCES

47

Oracle Purchasing Online Accruals - Setup and Usage

July 2014
Author: Pramod Kumar Sethi, ISC
Oracle Corporation
World Headquarters
500 Oracle Parkway
Redwood Shores, CA 94065
U.S.A.
Worldwide Inquiries:
Phone: +1.650.506.7000
Fax: +1.650.506.7200
www.oracle.com
Oracle is a registered trademark of Oracle Corporation. Various product and service names referenced herein may be trademarks
of Oracle Corporation. All other product and service names mentioned may be trademarks of their respective owners.
Copyright 2002 Oracle Corporation All rights reserved.

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