1. Complete the Oracle Payables Period-End Process
Complete the steps to close the Oracle Payables period, which corresponds to the Oracle Purchasing period being closed, to enable the creation of receipts accrual entries. Performing the Oracle Payables Period-End process effectively prevents any further invoices or payments being entered into Oracle Payables for the closed period.
2. Run the Receipt Accruals - Period End Process
This process will create period-end accruals for un-invoiced receipts, for Expense distributions for a specific purchasing period. Each time the process is run, Oracle Purchasing creates a batch in Receiving Sub ledger for your receipt accruals. It also creates accounting events in SLA. Journal entries are created for the amount of the receipt liabilities, debiting the charge account and crediting the Expense AP Accrual Account.
3. Transfer to General Ledger
4. Post Accrual and Encumbrance Reversal journal entry batches in your General Ledger
Use your General Ledger system to reverse all the receipt accrual and encumbrance reversal batches you created for your period-end accruals.
5. Perform Year End Encumbrance Processing (Optional)
Oracle Financials provides a number of facilities for the processing of outstanding encumbrances as part of year end processing.The default processing for Oracle Financials at year end is to extinguish any outstanding encumbrances or unused funds when you close the last period of the Financial Year within Oracle General Ledger.
The carry forward process enables managers to carry forward encumbrances for existing transactions (purchases / requisitions), carry forward encumbrances and the encumbered budget, or carry forward the funds available as at the end of the year.
You can also use mass allocations to bring forward part of the funds available or carry forward budgets into the current appropriation budget, or to a separate budget to identify between current year and carry forward amounts if required. Mass budget processing also allows you to combine these budgets.
The steps required to complete year end encumbrance processing in Oracle Purchasing are:
a) Identify Outstanding Encumbrances
Print the Encumbrance Detail Report to review the requisition and purchase order encumbrances, if the encumbrance option for requisitions or purchase orders has been enabled, and requisitions and purchases have entered and approved. Use this report to review the accounts encumbered.
The Encumbrance Detail Report reflects activity from General Ledger, not Purchasing or Oracle Payables. Therefore, use the Encumbrance Detail Report in a way that matches the accounting method:
Based on this report you can identify those transactions that you wish to carry forward into the new financial year. Refer below to the steps required to cancel transactions that are not to be carried forward.
- Receipt accrual - Generate the Encumbrance Detail Report as needed when the Accrue at Receipt option is used. Upon entering receipt delivery information, an automated process transfers the receipt information to General Ledger using the Journal Import Process.
- Period-end accrual - Generate the Encumbrance Detail Report at period-end. During the period, the encumbrance detail on the report is based on invoice matching information from Payables, not on receiving information. After the Receipt Accruals - Period-End process is run; the Encumbrance Detail Report reflects the true period-end receipt information.
- Cash basis - If cash-basis accounting is used, the encumbrances on the Encumbrance Detail Report remain until payment information from Payables is transferred to General Ledger. When cash-basis accounting is used and the Payables Transfer to General Ledger process is submitted, Payables transfers only accounting information for paid invoices to the General Ledger.
b) Perform Mass Cancel in Oracle Purchasing (Optional)
This process will automatically generate a Mass Cancel listing report identifying the following:
When this process is run, Oracle Purchasing creates journal entries to zero out the encumbrances associated with the cancelled requisitions and purchase orders.
- Unable to Cancel Requisitions (reasons provided)
- Unable to Cancel Purchase Orders (reasons provided)
- Partially in Range Documents
- Fully in Range Documents