2016

R12 Month End and

Year End Close
MONTH END CLOSE CHECKLISTS
BY:
HASLINA BINTI HASAN
Month End Close with Oracle R12
Fig 1 below outlines the period end dependency for Oracle Payables, Oracle Purchasing, Oracle
Inventory, Oracle Receivables, Oracle Assets, Oracle Order Management, Oracle Projects and
Oracle General Ledger (Release 12).

Fig 1: Period Close dependency among the modules

Remarks: PA (Project Accounting) module is no applicable for ALTEL.

In almost all modules the period end process consist of 5-6 major activity as:

1. Completing the Transactions

2. Creating Accounting
3. Followed by Reconcile Transactions
4. Post to GL
5. Reconcile Accounting
6. Close Period
Is Sequence Important in Closing oracle
Modules at Month end
The period end process is performed at the end of each management accounting period in order to
enable the reporting of the financial results for that period. This enables management to undertake
accurate decision-making, and drives external reporting information. Normally there are 12
management accounting periods, each normally consist 5 or 4 weeks long, which are aligned and
adjusted for the last week in the Year to coincide with the year-end date (31st of December) and
the first week in the year to coincide with in the start date of the Year Respectively. Apart from
this there are 13th & 14th adjusting period for the year end set at the 31st of December.

In the period end process various steps are followed preparation, closure of sub-ledgers, the
review of preliminary results, GL closure and production of reports and communication of
information to users. Due to this, sequence is really important in Oracle.

A typical data flow can be best understood as:

Normally the month end start sometime first Monday of week of the current month, Normal
procedure is that the whole month end completes in 4-5 working days. Here are the sequence in
which month end process performed.
R12 CM Month End Close and Reconciliation

Herewith providing the generic period close process for Cash Management for R12.

1. Make sure you have loaded & reconciled all bank statements for month

You must verified Auto-Reconciliation Execution Report

2. If there any issue, resolve all the exceptions

3. Create miscellaneous transactions

4. Resolve unreconciled lines

Bank Statement Detail Report

Transactions available for Reconciliation Report

A Note on Transactions Available for Reconciliation Report

Take advantage of this report. This report shows all transactions available for reconciliation for a
specific bank account. It lists detailed transaction information for your Available Receipts, Available
Payments, and Available Journal Entries for reconciliation.

Detailed information includes the Customer, Supplier, Transaction Date, Payment Method,
Transaction Number, Currency, and Amount. It also lists detailed information for statement lines
that are available for reconciliation against other statement lines.

5. Reconcile to General Ledger

GL Reconciliation Report
Account Analysis Report for Cash Account

A Note on General Ledger Reconciliation Report
Use this report to reconcile the General Ledger cash account to a bank statement balance. This
report lists a balance and an adjusted balance for the bank statement. It also lists a separate
adjustment amount for un-reconciled receipts, payments, and journal entries, as well as bank
errors.
R12 AP Month End Close and Reconciliation

These are Closure Checklist for Payables Period end.

1. Complete Transactions
That means completing all transactions for Oracle Payables:
Complete Invoicing and Credits
Complete Prepayments
Complete Expense Reports
Complete Invoice Import
You can use Invoices On-Hold Report to check if any invoices are holds

2. Approve Invoices (Optional)

The Payables Approval process is run to try to approve all unapproved invoices in the
system, so that they can be paid by Oracle Payments and posted to the General Ledger

3. Complete Payments

4. Reconcile Payments/Bank Statements

5. Resolve Potential Accounting Issues

o Create Accounting
o Journal Entries Report
o Unaccounted Transactions Report

6. Post (GL) Payables Transactions

7. Review Accounting
1. Payables Accounting Process Report
2. Posted Invoices Register
3. Posted Payments Register

8. Unaccounted Transactions Sweep

9. Close Payables Period

o Subledger Period Close Exceptions Report

10. Accrue Un-invoiced Receipts

11. Reconcile Payables Activity to GL

i. AP Trial Balance Report (Account definition, Data Manager Program)
ii. Third Party Balances Report
iii. Account Analysis Report

12. Mass Addition Transfer to Assets

While doing the reconciliation, you might have these issue:
Transactions do not appear in Open Account Balances Listing report
Accounting does not appear in Account Analysis report
Cancelled invoices/payments result in errors in accounting and reports
Create accounting program errors
Transfer to GL program errors
These are known issues and you check with corresponding Metalink note.
Make sure you should follow the best Practice
It always encouraged to include all LIABILITY accounts in Open Account Balances
Report Definition.
Explore the Control Account feature with Third Party Balances report.
You should avoid reversing batches (or modifying Journals) in GL, if transferred by
SLA.
Always use Period Close Exception report prior to closing Periods in GL and
reconciling to Account Analysis & Trial Balance reports.
R12 AR Month End Close and Reconciliation

Listed below are steps and checklist for R12 AR Month End Close and Reconciliation.

1. Complete All Transactions for the Period Being Closed

2. Complete and review your unapplied receipts

3. Reconcile Receipts to Bank Statement Activity for the Period

4. Change period status to Close Pending

Navigate: Control>Accounting>Open/Close Periods
Do not get confused with various status of periods:
Closed: Journal entry, posting, and transaction entry are not allowed unless the
accounting period is reopened. Receivables verifies that there are no unposted items
in this period. Receivables does not let you close a period that contains unposted
items.
Close Pending: Similar to Closed, but does not validate for Unposted items. Journal
entry, posting, and transaction entry are not allowed unless the accounting period is
reopened.
Future: This period is not yet open, but you can enter transactions in this period.
However, you cannot post in this period until you open it.
Not Opened: This period has never been opened and journal entry and posting are
not allowed.
Open: Journal entry and posting are allowed.

5. Create accounting
In Release 12 this step is new, as it enables you to create accounting for your completed
transactions, which will be feed into General Ledger.

6. Review Unposted Items Report

You can review the Unposted Items Report to determine if any exceptions have been encountered,
that will need to be resolved, to ensure all accounting has been successful for all transactions.

7. Reconcile Transaction Activity for the Period (Transaction & Receipt)

Run Journal Entries Report
(Transaction Register Total for Postable Items = Sales Journal by GL Account for the
Receivable Account Type (Total DRTotal CR))
Receipt Register
Receipt Journals Report

In theory this step is unchanged between Release 11i and Release 12. Its just important to note
that you should not be trying to reconcile distributions on transactions to account balances, as
these are not necessarily the final accounting for these transactions.

i. Check that Receivables Receipts Balance by running the Receipt Journal report and the
Receipt Register for the same GL Date range.
ii. Use the Receipt Journal to View information about Receipts that appear in your Journal
Entries report. Use the Receipt Register to Review a list of receipts for the date range that
you specify. The total of the Receipt Journal should equal the total of all receipts in the
Receipt Register. These reports display information about both InvoiceRelated and
Miscellaneous Receipts.

8. Reconcile outstanding customer balances

Aging Report (last period)
Transaction Register
Adjustments Register
Invoice Exceptions
Applied Receipts Register
 Unapplied Receipts Register
Aging Report (this period)

Most of these reports havent changed between Release 11i and Release 12, except that they look
at the SLA tables instead of the AR tables.

9. Post Receivables transactions in General Ledger

10. Reconciling AR and GL Balances

The following is a list of the Critical Reports required for Reconciliation between AR and GL
Journal Entries Report (AR)
Sales Journal by GL Account Report (AR)
Receipt Journal Report (AR)
Account Analysis Subledger Detail-180 Char (GL)
Third Party Balance Report (New to R12)
AR Reconciliation Report (AR)

The Total Activity in a period is calculated as follows:

Transaction Register for the Period :
(-) Applied Receipts Register for the Period
(-) Un-Applied Receipts Register for the Period
(+) Adjustments Register for the Period
(-) Invoice Exceptions for the Period
(+) Rounding Differences for the Period
(+) Credit Memo gain/loss for the Period

11. Close AR Period

Subledger Close Exception Period
From Receivables Responsibilities
Navigate to Control --> Requests --> Run
Subledger Period Close Exceptions Report

Change Period status to Closed

Open next Period
R12 PO Month End Close and Reconciliation

Accrual Process for Period-End Accruals

Key points for accruing expense purchases at period-end include:

You record the total uninvoiced receipt liabilities accrued during the accounting period.
Actual journal entries are created for the amount of the receipt liabilities, debiting the
charge account and crediting the PO distribution accrual account (normally the Expense
A/P Accrual Account defined in the Define Purchasing Options form).
You reverse accrual journal entries manually at the start of the new accounting period.
If you are using encumbrance accounting, purchase order encumbrance is relieved when
the invoice(s) matched to the purchase order are posted to the general ledger.

Receiving Transactions

Purchasing does not record any accounting entries for expense during a receiving transaction if
you use period-end accruals. You record all of your uninvoiced liabilities at month end using the
Receipt Accruals - Period-End process.

Period End Checklist for Purchasing

Purchasing provides you with complete flexibility and control for your period-end accruals. You can
use the Uninvoiced Receipts Report to analyse your uninvoiced non-inventory receipts before you
accrue these receipts. You can then use the Receipt Accruals - Period-End process as many times
as you want to generate accrual entries for the receipts you choose.

For your period-end reconciliation, you should perform the following steps:

1. Identify Period
Identify the purchasing period you want to reconcile and close.

2. Enter all receiving transactions for goods and services you received during the period.
Purchasing automatically creates receipt accruals for all receipts you entered up to the end of this
period. To prevent any period-end disruption, Purchasing lets you provide a receipt date that is
different from the date you enter the receipts.

You never have to enter all the receipts for a period before the end of this period. You can enter
these receipts later. You simply need to back date the receipt date.

3. Enter and match all invoices you received during the period for your receipt accrual
entries.
You should make sure that you solve all posting holds problems in Payables before accruing
receipts. Purchasing creates accrual journal entries for all purchase orders you received and did
not match to an invoice. If you matched a purchase order to an invoice, Purchasing does not
accrue the corresponding receipts.

Purchasing does not accrue any purchase order that you closed on or before the end of the accrual
period you choose. If the invoice is on posting hold, Payables has not yet accounted for the liability
corresponding to the invoice. Under these conditions, the liability corresponding to this invoice
would not appear in your books for the period. Payables lets you recognize this liability in the
following period.
4. Close your accounts payable period corresponding to the purchasing period for your
receipt accrual entries.
Note: The List of Values for period end accruals does not require the Accounts Payable period to be
closed, however it's strongly recommended that closed periods are used, as the receipt accruals
process will not pick up invoices entered after the accruals process is run for the period.

5. For period-end accruals of expense purchases, run the Uninvoiced Receipts Report.
Use this report to analyze your uninvoiced receipts. The Uninvoiced Receipts Report lets you use
the same selection criteria for your uninvoiced receipts as the Receipt Accruals - Period-End
process. You always know exactly what you accrue and for what amount.

6. For period-end accruals of expense purchases, use the Receipt Accruals - Period-End
process as many times as you need.
You can use the search criteria to choose what you want to accrue and accrue your receipts steps
by steps. You create accruals for a specific purchasing period. Purchasing automatically accrues all
uninvoiced receipts your entered up to the end of the accrual period you specify.

Each time you use the Receipt Accruals - Period-End process, Purchasing creates an unposted
journal entries batch in your general ledger for your receipt accruals. If you are using
encumbrance, Purchasing creates another journal entries batch in your general ledger
corresponding to the encumbrance reversal entries for the uninvoiced receipts you accrued.

Purchasing never accrues your uninvoiced receipt twice. Each time you create accrual entries for a
specific uninvoiced receipt, Purchasing marks this receipt as accrued and ignores it the next time
you use the Receipt Accruals - Period-End process. Purchasing creates accrual entries only up to
the quantity your supplier did not invoice for your partially invoiced receipts.

10. Close the purchasing period for your receipt accruals. When you close a purchasing period,
Oracle Purchasing automatically un-marks all the receipts you previously accrued to make sure
you can accrue these receipts again if they are still uninvoiced in the next period.
R12 FA Month End Close and Reconciliation

In FA, at period end, we require to run depreciation for depreciation books set up for the
organization, and to Create accounting for Oracle General Ledger. Oracle Assets has only a single
open depreciation period in each depreciation book.

1. Complete All Transactions for the Period Being Closed

You need to ensure that all transactions have been entered for the period being closed. Once a
depreciation period in Oracle Assets has been closed, it cannot be re-opened. Check that no-one is
entering transactions as Oracle Assets prevents transaction data entry while the Depreciation Run
Process is running. You need to complete all transactions for Oracle Assets:

Prepare and Post Mass Additions

Complete Manual Additions
Complete Adjustments
Complete Retirements
Complete Transfers
Complete Reinstatements

2. Run Calculate Gains and Losses

This is an optional step, the Calculate Gains and Losses program for retirements can be submitted
prior to running depreciation. The Calculate Gains and Losses process is performed independently
for each depreciation book.

3. Run the depreciation

Release 12 you can now run depreciation without closing the period. Once you are sure that all the
balances are correct you need to run depreciation and close the period. Once you closed the
period, you are unable to re-open it.

4. Create accounting

You need to run Create Accounting Assets process (FAACCPB)

5. Post Asset Transaction in GL

You need to make sure the step 8 must be completed only if you done transfer and posting for the
accounting entries to GL.
These steps are basically takes care of data movement, then next step for you to tie FA and GL.
For reconciliation of assets you need to take advantage of some of seeded and newly added report
that will help business user to reconcile and closing the period.
6. Reconcile your Fixed Asset and GL

Reconcile Assets to the GL Using Reports

o Journal Entry Reserve Ledger - reconcile with the Account Analysis with Payables
Details Report.
o Tax Reserve Ledger Report
o Account Reconciliation Reserve Ledger Report
Balance Report
o Cost Detail and Cost Summary Reports
o CIP Detail and CIP Summary Reports
o Reserve Detail and Reserve Summary Reports
o Revaluation Reserve Detail and Revaluation Reserve Summary Reports
GL Report
o Journal - posted/Unposted
o Account analysis
R12 INV Month End Close and Reconciliation

Generally, we should open and close periods for each separate inventory organization
independently.

Inventory and work in process transactions automatically create accounting entries. All
accounting entries have transaction dates that belong in one accounting period. We can
report and reconcile our transaction activity to an accounting period and General Ledger.
We can transfer summary or detail transactions to General Ledger. We can transfer these
entries to General Ledger when we close the period or perform interim transfers.

When we transfer to General Ledger, a general ledger (GL) batch ID and organization code
are sent with the transferred entries. We can review and report the GL batch number in
General Ledger and request Inventory and Work in Process reports by the same batch
number. We can also view general ledger transfers in Inventory and drill down by GL batch
ID into the inventory and WIP accounting distributions.

The period close process permanently closes an open period. We can no longer charge
transactions to a closed period. Once we close a period, it cannot be reopened. As a
precaution, we can do a GL transfer without closing the period.

If inventory organizations parameter for Transfer to GL is none, accounting entries are not
transferred to the General Ledger.

Oracle Inventory uses accounting periods to group material transactions and work in process
transactions for accounting purposes. So normally these details are grouped for a month and the
transaction details are posted to GL.

An automatic general ledger transfer is processed when we close an accounting period.

Pending Transactions

Before closing the inventory Period, make sure all pending transactions are resolved. In pending
transaction form we can see all pending transactions or while trying to close the period,
automatically system will display all pending transaction information.

In pending transactions we can find 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 on pending receiving transactions, pending material transactions, and

pending shop floor move transactions existing in this period.
R12 GL Month End Close and Reconciliation

GL period closure is needed per ledger. Here is checklist with some handy notes for reference.

1. Ensure Next Period is Future Enterable or Open:

You need to set the status of the next accounting period to Future Entry if it is not
already, except at year-end. While doing the year-end, it is recommended that you
complete all period end processing, prior to opening the first period of the new financial
year.

2. Import & Post SLA & Feeder Systems

o Import Journals
Journal Import Execution Report
Delete Journals in Error
Correct via Correct Journal Import Data
Re-import
o Post Journals

3. Post All Journals (after correcting posting errors)

4. Run and Review Journals Reports

5. Run Revaluation (Optional)

This need to revalue account balances to update functional currency equivalents

6. Run Translation (Optional)

This is Optional, need only when you define any new currencies to which accounting
balances are to be translated. In that case you
o Maintain period-end exchange rates for all foreign currencies to which you want to
translate.
o Maintain average exchange rates for all foreign currencies to which you want to
translate.
o Maintain historical rates or amounts for any owners equity accounts to be
translated.
o Translate account balances to any defined currency

7. Reconcile Intercompany (Optional)

8. Close GL Period

9. Consolidate Ledgers (Optional)

10. Run Final Reports (FSG Reports)

If you are using intercompany segments, then steps 7 will be additional for you. Therefore
While doing Intercompany Reconciliation, you need to compare the balance of
intercompany accounts for a pair of trading partners to see if they match
Drill down to General Ledger Balances
Drill down to journals in GL, SLA and subledger transactions (invoices, etc.)
Year End Close in Oracle EBS.

These are the some of the standard steps performed for year-end processing in Oracle General
Ledger.

1. Set the status of the first accounting period in the new fiscal year to Future Entry.
Generally the first period of the new fiscal year should not be opened until all of the year-
end processing for the last period of the current year has completed.

2. (Optional) Create reversing entries at the beginning of every period, generate and post
accruals from the prior period now. If your business rules require you to create reversing
entries at the beginning of every period, generate and post accruals from the prior period
now

3. If you have other source make transfer data from all of subledgers and feeder systems to
the GL_INTERFACE table.

4. Then, run the Journal Import process to populate the GL_JE_BATCHES, GL_JE_HEADERS,
and the GL_JE_LINES tables. This can be done automatically from the subledger systems,
or manually from Oracle General Ledger.

Now the next is review the Journal Import Execution Report to check the status of all
imported journal entries.
If there is any error journal entry batches, delete it.
If you encounter a small number of errors, make the necessary corrections in the
GL_INTERFACE table using the Correct Journal import Data window. Run Journal
Import.
If you encounter a large number of errors, delete the Journal Import data from the
GL_Interface table, correct the information in the feeder or subledger system and run
Journal Import.

5. Close the period for each subledger. This prevents future subledger transactions from
being posted to General Ledger in the same period as part of regular month end close
process.

6. Review the imported journal entries in Oracle General Ledger. These can be reviewed
online or in reports. Reviewing journal entries before posting minimizes the number of
corrections and changes that need to be made after posting. Normally these Reports are
run for review.

Journal Batch Summary Report

General Journal Report
Journal Entry Report
Journal Line Report
Journal Source Report
Journals by Document Number Report (This is when document sequencing is used)
Unposted Journals Report.

7. Then post all the imported journal entries.

8. Perform reconciliations of ledgers by reviewing and correcting balances. The following

reports are useful to help with the reconciliation:

Account Analysis with Payables Detail

Account Analysis with Subledger Detail
 Account Analysis with Subledger Detail II
General Ledger Report
Posted Journals Report
Journals Report with Subledger Detail
Accrual Reconciliation Report
Other Reports

9. Generate all recurring journals and mass allocation journals if any

10. (Optional) If you did not generate and post your prior period reversals at the beginning of
this period, be sure to generate reversals now.

11. Running the revaluation process to get revalue balances to update foreign currency
journals to the functional currency equivalents.

12. Then post all journal whether it is manual, recurring, step-down allocations, and reversals.

13. Review your posting results. The following reports are helpful:

Posting Execution Report

Error Journals Report

14. Update any unposted journal entries and then post them again. Common reasons for
unposted batches include:

Control total violations

Posting to unopened periods
Unbalanced journal entries

All errors in the journal entry batches must be corrected and resubmitted for posting.

15. Run General Ledger reports, such as the Trial Balance reports, Account Analysis reports,
and Journal reports.

16. Consolidate the other sets of books if you instance is having multiple Operating units.

17. If using a calendar with an adjusting period that represent the last day of the fiscal year,
close the current period and open the adjusting period.

18. Create and post adjusting entries and accruals in the adjusting period.

19. Run Trial Balance reports and other General Ledger Reports in the adjusting period after
adjustments are made.

20. (Optional) If you are required to have an actual closing journal entry that shows the
closing of your income statement accounts to retained earnings, submit the Create Income
Statements Closing Journals program. This program creates an auditable closing journal
entry.

21. (Optional) If you submitted the Create Income Statement Closing Journals program, post
the closing journals to update account balances. Your income statement will reflect zero
balances.
22. (Optional) If your local accounting rules require you to close your balance sheet, submit
the Create Balance Sheet Closing Journals program.

23. Post the Balance Sheet Closing Journal by submitting the Create Balance Sheet Closing
Journals program, once this is done balance sheet will now reflect zero balances which is
same as mention above.

24. Close the last period of the fiscal year using the period window.

25. Open the first period of the new fiscal year to launch a concurrent process to update
account balances. Opening the first period of a new year automatically closes your income
statement and posts the difference to your retained earnings account specified in the Set
of Books form.

26. Run FSG reports for the last period of the year.

27. (Optional) If you closed your balance sheet at year-end, reverse the Balance Sheet Closing
Journals or repopulate balances of your balance sheet accounts for the New Year.