How to Reconcile Your Manufacturing Month-End Close - PowerPoint PPT Presentation

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How to Reconcile Your Manufacturing Month-End Close

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This version is from a co-presentation with Sharon Widmer, a ... Running multiple periods at a time, and back-dating transactions. 16. Common Problems (Cont'd) ... – PowerPoint PPT presentation

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Title: How to Reconcile Your Manufacturing Month-End Close


1
How to Reconcile Your Manufacturing Month-End
Close
  • Douglas A. Volz
  • Sharon L. Widmer
  • October 1998

2
Update for May 2007
  • While at KPMG, Doug first wrote this in 1998.
    This version is from a co-presentation with
    Sharon Widmer, a valued friend and co-worker from
    KPMG/Bearingpoint.
  • Starting in Release 11.5.10 (or 11.5.9 plus
    patches), the period close processes will
    snapshot your month-end inventory balances.
  • However, even with this new functionality the
    snapshot does not consider receiving inventory,
    nor does it provide useful month-end inventory
    valuation reporting. The only new report is a
    period close reconciliation report, automatically
    generated when you close your inventory
    accounting period.
  • Doug has helped over 40 clients with
    reconciliation challenges, from detailed
    diagnoses, training sessions, custom
    reconciliation reports and assistance with
    streamlining month-end close processes. His
    reconciliation experience started with early
    Oracle clients in Release 9 and continues up to
    present versions.

3
Reconciliation Agenda
  • General Reconciliation Principles
  • Receiving Valuation Accounts
  • Inventory Valuation Accounts
  • Work In Process Valuation Accounts

4
There Has to be an Easier Way !!
5
General Reconciliation Principles
  • Use the following formulaPrior cum. balance
    monthly accounting activity month-end
    cumulative G/L balance
  • Also compare above formula to cumulative report
    balances
  • If you do not balance, check for manual G/L
    journal entries and entries from other subledgers

6
More Reconciliation Principles INV, Receiving,
and WIP
  • Ignore minor rounding differences
  • When the unit cost precision is higher than the
    currency decimal precision, you may have minor
    rounding differences between the valuation
    reports and cumulative accounting totals
  • Watch out for transaction and reporting cut-offs!!

7
How to Balance the Receiving Valuation Accounts
  • Use the Receiving Valuation Reports to get the
    month-end balances
  • Use the Receiving Account Distribution Report for
    monthly increases to the Receiving Valuation
    Account
  • Use the Material Distribution Summary Report for
    monthly decreases to the Receiving Valuation
    Account

8
How to Balance the Inventory (Stores)Valuation
Accounts
  • Use the Inventory Valuation Reports to get the
    month-end balances
  • You can also use the Transaction Historical
    Summary Report
  • Also use the Period Close Value Summary Report,
    for a double check
  • Use the Material Distribution Summary Report for
    monthly totals

9
What to Check If the Inventory Accounts Do Not
Balance
  • Check for miscellaneous inventory transactions,
    where the offset account is the same as the
    subinventory valuation account
  • Use the Transaction Distribution Inquiry to find
    these, query for entries that hit your
    subinventory valuation accounts, but the
    Accounting Line Type is Account

10
How to Balance the Intransit Valuation Accounts
  • Use the Intransit Valuation Reports to get the
    month-end balances
  • Choose Yes for the option Only Display Inventory
    You Own
  • Use the Material Distribution Summary Report for
    monthly totals

11
How to Balance the WIP Valuation Accounts
  • Use the WIP Valuation Report to get the month-end
    balances (No cut-off issues!!)
  • Choose the option to include closed jobs
  • Use the WIP Account Summary and Material
    Distribution Summary Reports for monthly totals

12
Report Drill-Down to the General Ledger
  • The Inventory/WIP GL batch numbers are visible in
    the G/L, as part of the journal entry batch name
  • You can run the Material and WIP Distribution
    Reports by this G/L batch number and compare to
    the General Ledger
  • In R10.7 GUI you can drill down by GL Batch in
    the Inv. GL Transfers Screen

13
List of Month-End Close Reports
  • Material Distribution Detail/Summary Reports
  • WIP Account Detail/Summary Reports
  • Receiving Account Distribution Report
  • Purchase Price Variance Report
  • Invoice Price Variance Report
  • Discrete Job Value
  • Repetitive Value Report
  • Expense Job Value Report
  • Margin Analysis Report

14
Month-End Close Reports (Contd)
  • Inventory Value Report
  • Intransit Value Report
  • Subinventory Account Value Report
  • All Inventories Value Report
  • Receiving Value Report
  • Receiving Value by Destination Report
  • WIP Value Report
  • Period Close Value Summary Report

15
Common Problems
  • Uncosted material transactions in
    MTL_MATERIAL_TRANSACTIONS
  • WIP labor/overhead transactions stuck in
    WIP_TRANSACTIONS
  • Stuck PO receipts in RCV_TRANSACTIONS_INTERFACE
  • Report cut-off issues at month-end
  • Running multiple periods at a time, and
    back-dating transactions

16
Common Problems (Contd)
  • For GUI, Wrong System Account for Receiving
    Accrual Account field
  • Not correctly initializing the subinventory
    summary balances for first period close
  • Not reclassifying the initial legacy GL balances
    to match Oracle system
  • Release 10.7 Period Close Bug - 667196 (usually
    for Average Costing)

17
Desired Enhancements
  • Add a close date parameter to the Discrete Job
    Value Report, to facilitate running the report
    for all closed jobs at month-end
  • Create a system balancing/comparison report to do
    this work for you

18
Desired Enhancements (Contd)
  • Add Oracle G/L inquiry drill-down capability for
    Inventory and WIP
  • Add a standard report or alert to find the
    miscellaneous inventory transactions that are
    causing an out-of-balance
  • Simplify, make more robust, or eliminate the
    interfaces needed in Oracle

19
Send Email Address to Get the Following
Scripts/Papers
  • Interface script - review interface tables
  • Uncosted transactions instructions
  • SQL script to list entries in the
    RCV_TRANSACTIONS_INTERFACE table
  • Latest paper on the AP Accruals (updated from
    1996/97 OAUG conf.)

20
Thank You for Your Attendance and Participation
  • Douglas A. Volz
  • Sharon L. Widmer
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