Steps of The Purchasing Receipt Accrual Period-End Process

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R11 What Are The Basic Steps Of The Purchasing Receipt Accrual Period-End Process? (Doc ID 467584.1)
Modified 20-MAR-2012 Type BULLETIN Status PUBLISHED(EXTERNAL) Priority 3
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Purpose Scope and Application R11 What Are The Basic Steps Of The Purchasing Receipt Accrual Period-End Process?
Applies to:
Oracle Purchasing - Version: 11.5.10 to 11.5.10 - Release: 11.5 to 11.5 Information in this document applies to any platform.
Purpose
Explain and detail the basic steps for executing the Receipt Accrual Period End process within the Purchasing module. The scenario below is demonstrated in the Vision Demo Database environment.
Scope and Application

It is expected that a basic understanding of the core Purchasing process has been achieved.
R11 What Are The Basic Steps Of The Purchasing Receipt Accrual Period-End Process?
The steps outlined below show a basic Receipt Accrual Period End flow - to include a description of the reports involved complimented with sql statements that may prove useful when executing the process.
Step 1: Understanding the accounts being used and where/why they are coming from?
Expense AP Accrual Account - Purchasing Super User Responsibility or equivalent Nav: Setup/Organization/Purchasing Options Select the tab/region/alternative region which states "Accrual" Take notice of the "AP Expense Accrual" account which has been entered
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Distribution Expense Charge Account - that is on the Purchase Order Distribution The defaulting rules (Levels) are as follows for Expense Destination: Level 1 - Item Navigation: Purchasing Super User: Items/Master Items - Purchasing Tab Review the Expense Account that is entered The item will not have any boxes checked under the Costing tab If the Item has Inventory Item checked under the Inventory tab - the expense account is mandatory under the Purchasing tab. The Expense account is pulled from the Organization attributes for the item, so ensure that the Purchasing Tab is viewed at the Inventory Organization Level item attributes matching the same Inventory Organization that was used as the Deliver To on the Requisition Form. The logic is called in the Requisition Account Generator workflow in the following package/procedure - PO_WF_PO_CHARGE_ACC.EXPENSE
Level 2 - Employee Record The Charge Account is pulled from the Employee Record if not found at the Item Level. Shared HR install: Navigation: Purchasing Super User - Setup/Personnel/Employees Query the Employee in question - next, choose the "MORE" button in the lower right Upon entering the sub-form, choose "ASSIGNMENT" from the drop-down alt region - press tab Take notice of the Employee's expense account Full HR install:
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Navigation: Human Resources, Vision Enterprises - People/Enter and Maintain Use the FIND form to locate the employee question Choose the "Assignments" button in the lower portion of the form In the lower sub form, within Assignments, choose the "Purchasing" tab region Take note of the Set of Books and account which has been entered for Employee Charge Account The logic is located in the package/procedure PO_WF_PO_RULE_ACC/GET_DEFAULT_REQUESTER_ACC.
Level 3 - Favorite Charge Account (Requisitions Only) If using iProcurement, it is possible to setup Favorite Charge Accounts. These are defaulted when the first two levels (above) are exhausted and an account cannot be found. Within iProcurement choose the Preferences tab - iProcurement Preferences - the Favorite Accounts are setup here. The logic is located in the package/procedure - PO_WF_PO_RULE_ACC/GET_FAVORITE_CHARGE_ACC
Level 4 - Expense Account Rules (Requisition & Purchase Order) Expense Account rules can be used to replace certain segments of the Charge Account. The rules are used if the following profile is set to 'Yes':
POR: Apply Expense Account Rules to Favorite Charge Accounts

The expense account rules are defined using the 'Procure to Pay Administrator' responsibility. Navigation: Purchasing Setup/Financials/Accounting/Expense Account Rules Rules are typically based on Item Category The logic is located in the package/procedure - PO_WF_PO_RULE_ACC/IF_RULE_EXIST_FOR_ALL_SEGMENTS.
Step 2: Purchase Order Creation - Details to Observe

Navigation: Purchasing, Vision Operations - Purchase Orders/Purchase Orders A standard purchase order is created using two lines - Expense destinations
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Take note of the match option - it is set to PO for this Line 1, Shipment 1. Accrue on Receipt Flag is Un-Checked.
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Take note of the match option - it is set to Receipt for this Line 2, Shipment 1. Notice the Accrue On Receipt flag is also unchecked.
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In this test case, two different charge accounts are being used on the line to distinguish the processing.
Step 3: Perform the Receipt, consisting of both the Receive and Deliver transactions
Navigation: Purchasing, Vision Operations - Receiving/Receipts Select the Inventory Organization which was entered as the Ship-To Organization on the purchase order shipment; in this case, it is Vision Operations (V1) Use the Find Expected Receipts window to locate the Purchase Order information Conduct a receipt, using Direct Delivery, against the purchase order shipment Enter a Deliver-to Location, as this is mandatory for expense deliver transactions
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Navigation: Receiving/Receiving Transactions Summary Confirm that the transactions were successful
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Choose Tools/View Accounting from the top text menus while on the Receive transaction:
Notice this is not an option yet, as no accounting transactions have been created. It should be noted that no accounting transactions haven taken place at all during the Receive/Deliver process. There have been no transactions transferred to the GL_INTERFACE at this time, nor has the RCV_RECEIVING_SUB_LEDGER table been updated to reflect the receipt transactions which have taken place.
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SELECT substr(poh.segment1,1,10) PO_NUM, gli.status GL_INT_STAT, gli.accounting_date ACT_DATE, gli.reference21 doc_type, gli.reference22 po_header_id, gli.reference23 po_distribution_id, gli.entered_dr, gli.entered_cr, gli.accounted_dr, gli.accounted_cr, glcc.segment1||'.'||glcc.segment2||'.'||glcc.segment3||'.'||glcc.segment4||'.'||glcc.segment5 Account FROM gl_interface gli, gl_code_combinations glcc, rcv_receiving_sub_ledger rsl, po_headers_all poh WHERE gli.gl_sl_link_id = rsl.gl_sl_link_id AND gli.gl_sl_link_table = 'RSL' AND gli.code_combination_id = glcc.code_combination_id AND rsl.code_combination_id = glcc.code_combination_id AND gli.period_name = '&PERIOD_NAME' AND rsl.reference2 = poh.po_header_id AND poh.segment1 = '&PO_NUM';
The above SQL statement can be used to track the transactions as they are transferred to the GL_INTERFACE. At this time, this statement will not return any rows of data.
Step 4: Run the Uninvoiced Receipts Report prior to Receipt Accrual Period-End Process
Navigation: Purchasing, Vision Operations - Reports/Run - Uninvoiced Receipts Report
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The Uninvoiced Receipts Report is designed to give a representation as to what is about to be accrued. Using the parameters above shows all the data/transactions which are eligible to be transferred to the General Ledger when the Purchasing Receipt Accrual Period-End Process is executed.
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Example: Uninvoiced Receipts Report output The only accounts which are tracked with period-end accruals are the expense account (which was on the purchase order distribution) and the AP Expense Accrual Account from the Purchasing Options Accrual tab/region. This report is designed to show what is GOING to be accrued when running theReceipt Accrual Period- End Report - a total of 2 accounting transactions. There are two very important parameters with this report: Include Online Accruals - If this parameter is set to Yes, then the Purchase Order distributions which are having the 'Accrue On Receipt' box checked will be included. It is recommended that the report be run with 'No' selected, so as to achieve a true picture of what is about to be accrued. It will pick up all Expense - Period End - Purchase Order Distributions having a ACCRUED_FLAG of null or 'N'. Accrued Receipts - If this parameter is set to Yes, it is going to show purchase order distributions which are already accrued and essentially have been transferred to General Ledger. It is recommended the report be run with the parameter as 'No' so as to achieve a true picture of what is about to be transferred to GL.
Looking close at these parameters and how they correlate to the data in the Purchasing tables:
SELECT hro.name operating_unit, poh.segment1 po_number,
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pol.line_num line_number, poll.shipment_num shipment_num, poll.accrue_on_receipt_flag accrue_at_receipt_ship, pod.distribution_num distribution_num, pod.accrued_flag accrued_flag, pod.accrue_on_receipt_flag accrue_at_receipt_dist FROM po_headers_all poh, po_lines_all pol, po_line_locations_all poll, po_distributions_all pod, hr_all_organization_units hro WHERE poh.po_header_id = pol.po_header_id AND pol.po_line_id = poll.po_line_id and poll.line_location_id = pod.line_location_id AND hro.organization_id = poh.org_id and poh.segment1 = '&PO_NUMBER' AND poh.org_id = '&ORG_ID';
Using this SQL statement, the following can be seen:
OPERATING_UNIT PO_NUMBER LINE_NUMBER SHIPMENT_NUM ACCRUE_AT_RECEIPT_SHIP DISTRIBUTION_NUM ACCRUED_FLAG ACCRUE_AT_RECEIPT_DIST
Vision Operations
5038
Vision Operations
5038
The 'Include Online Accruals' parameter correlates to the ACCRUE_ON_RECEIPT_FLAG. The 'Accrued Receipts' flag correlates to the 'ACCRUED_FLAG' above. The ACCRUED_FLAG is null because this is a new purchase order - first time accrual.
Step 5: Complete the Matching and Close the Account Payables Period
It is vital that all invoices be entered prior to closing the Accounts Payable period in order to ensure that the purchase order does not accrue for the period in question. Navigation: Payables Manager - Accounting/Control Payables Period
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Close the Payables period. The period must be closed in order for it to be considered for the Receipt Accrual Period-End Process.
Step 6: Running the Receipt Accrual Period-End Process

Overview: The Receipt Accrual Period-End Process will be looking to both the purchase order shipments and purchase order distributions for scenarios where quantity received surpasses that of quantity billed, meaning quantity has been received but not yet invoiced.
In order for transactions to be picked up by the process, the ACCRUE_ON_RECEIPT_FLAG in both the PO_LINE_LOCATIONS_ALL (at shipment level) and PO_DISTRIBUTIONS_ALL (at distribution level) tables has to be "N". Also, the ACCRUED_FLAG in the PO_DISTRIBUTIONS_ALL table should either be NULL or "N"; if the flag is NULL, it is safe to assume that the distribution has never seen an period-end accrual cycle. Again, this process is responsible for getting accounting transactions to the general ledger where quantity has been received but not yet invoiced. Navigation: Purchasing, Vision Operations - Reports/Run - Receipt Accrual-Period-End Process
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Choose the period - noting the following must hold true for the period to be listed in the list of values: Accounts Payable period must be closed Purchasing period must be Open General Ledger period must be Open
Confirmation of Accounting Transactions created by the period end process: a) Confirm the Purchase Order distribution was updated to showed it is now accrued:
SELECT hro.name operating_unit, poh.segment1 po_number, pol.line_num line_number, poll.shipment_num shipment_num, poll.accrue_on_receipt_flag accrue_at_receipt_ship, pod.distribution_num distribution_num, pod.accrued_flag accrued_flag, pod.accrue_on_receipt_flag accrue_at_receipt_dist
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FROM po_headers_all poh, po_lines_all pol, po_line_locations_all poll, po_distributions_all pod, hr_all_organization_units hro WHERE poh.po_header_id = pol.po_header_id AND pol.po_line_id = poll.po_line_id AND poll.line_location_id = pod.line_location_id AND hro.organization_id = poh.org_id AND poh.segment1 = '5038' AND poh.org_id = 204;
OPERATING_UNIT PO LINE SHIPMENT ACCRUE_AT_RECEIPT_SHIP DISTRIBUTION_NUM ACCRUED_FLAG ACCRUE_AT_RECEIPT_DIST
Vision Operations
5038 1
Vision Operations
5038 2
Look at the ACCRUED_FLAG - notice it is "Y" as the distribution was considered during this run of the period-end process.
b) Resubmit the Uninvoiced Receipts Report. (This can be used to confirm that the ACCRUED_FLAG was changed using the application.) Navigation: Purchasing - Reports/Run - choose the "Uninvoiced Receipts Report" request Contrary to the first run in Step 4, specify YES for parameter "Accrued Receipts" Set the Include Online Accruals as NO
The report drives off of the ACCRUED_FLAG in the PO_DISTRIBUTIONS_ALL table, and because the period-end process has run, the table has been updated to reflect the ACCRUED_FLAG as "Y". Therefore, running this report with Accrued Receipts = YES, there will be data found.
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c) Confirm the data is present in the GL_INTERFACE:
SELECT substr(poh.segment1,1,10) PO_NUM, gli.status GL_INT_STAT, gli.accounting_date ACT_DATE, gli.reference21 doc_type, gli.reference22 po_header_id, gli.reference23 po_distribution_id, gli.entered_dr, gli.entered_cr, gli.accounted_dr, gli.accounted_cr, glcc.segment1||'.'||glcc.segment2||'.'||glcc.segment3||'.'||glcc.segment4||'.'||glcc.segment5 Account FROM gl_interface gli, gl_code_combinations glcc, rcv_receiving_sub_ledger rsl, po_headers_all poh WHERE gli.gl_sl_link_id = rsl.gl_sl_link_id AND gli.gl_sl_link_table = 'RSL' AND gli.code_combination_id = glcc.code_combination_id AND rsl.code_combination_id = glcc.code_combination_id AND gli.period_name = 'Nov-07' AND rsl.reference2 = poh.po_header_id AND poh.segment1 = '&PO_NUM';
PO_DISTRIBUTION ENTERED_DR ENTERED_CR ACCOUNTED_DR ACCOUNTED_CR ACCOUNT _ID
PO_NUM GL_INT_STAT ACT_DATE DOC_TYPE PO_HEADER_ID
5038
NEW
11/8/2007
PO
33973
75724
75
75
01.000.1120.000 0.000
5038
NEW
11/8/2007
PO
33973
75724
75
75
01.000.2350.000 0.000
5038
NEW
11/8/2007
PO
33973
75725
75
75
01.000.1130.000 0.000
5038
NEW
11/8/2007
PO
33973
75725
75
75
01.000.2350.000 0.000
Notice the transactions against the Expense AP Accrual Account having value "2530" in column SEGMENT3. Then there is an entry for each purchase order distribution, for line 1 (1120) and line 2 (1130).
d) Confirm the data also exists in the RCV_RECEIVING_SUB_LEDGER:
SELECT poh.segment1 po_number, poh.po_header_id, rsl.je_line_description, rsl.reference4, rsl.accounted_dr,
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rsl.accounted_cr, rsl.entered_dr, rsl.entered_cr FROM rcv_receiving_sub_ledger rsl, po_headers_all poh WHERE rsl.reference2 = poh.po_header_id AND rsl.period_name = 'Nov-07' AND poh.segment1 = '5038';
JE_LINE_DESCRIP REFERENCE4 ACCOUNTED_DR ACCOUNTED_CR ENTERED_DR ENTERED_CR TION
PO_NUMBER PO_HEADER_ID
5038
33973
Supplies - Match PO
5038
75
75
5038
33973
Supplies - Match PO
5038
75
75
5038
33973
Supplies - Match Receipt
5038
75
75
5038
33973
5038
75
75
e) (Conditional) If the purchase order was matched to the receipt, it is necessary to confirm if any rows are in the RCV_SUB_LEDGER_DETAILS table:
SELECT poh.segment1 po_number, poh.po_header_id, rsl.je_line_description, rsl.reference4, rsl.accounted_dr, rsl.accounted_cr, rsl.entered_dr, rsl.entered_cr FROM rcv_sub_ledger_details rsl, po_headers_all poh WHERE rsl.reference2 = poh.po_header_id AND rsl.period_name = 'Nov-07' AND poh.segment1 = '5038';
PO_NUMBER PO_HEADER_ID JE_LINE_DESCRIPTION REFERENCE4 ACCOUNTED_DR ACCOUNTED_CR ENTERED_DR ENTERED_CR
5038
33973
5038
75
75
5038
33973
5038
75
75
In this case, the two records were created because only when matching to the receipt do the details get created in RCV_SUB_LEDGER_DETAILS.
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Step 7: Journal Import - Reversal Transactions

It is necessary to understand that the accounting transactions that are being transferred to the General Ledger are going to be reversed at the time when the next accounting period opens. Options Include: 1. Manual Journal Reversal within the General Ledger. 2. Auto Reversal of the Journals as outlined in the note below: Note 97318.1 - Can the Journal Reversal Process be Automated (AutoReversal)? It should be noted that autoreversal does NOT work for encumbrance batches. This is documented in the note below: Note 1080127.1 - Can Encumbrance Journals be Automatically Reversed Using AutoReversal?
Step 8: Close the Purchasing Period/Open Next Purchasing Period

Navigation: Purchasing Super User -Setup/Financials/Accounting/Control Purchasing Periods Facts about what takes place when opening and/or closing the Purchasing period: The ACCRUED_FLAG on the PO distribution will be updated to N This update will affect all the operating units for the set of books it is run in. After closing the Purchasing period, choose View/Requests - you will see that the concurrent request was submitted for "Reset Period End Accruals".
Executing the following SQL will now show that the ACCRUED_FLAG has been set back to "N":
SELECT hro.name operating_unit, poh.segment1 po_number, pol.line_num line_number, poll.shipment_num shipment_num, poll.accrue_on_receipt_flag accrue_at_receipt_ship, pod.distribution_num distribution_num, pod.accrued_flag accrued_flag, pod.accrue_on_receipt_flag accrue_at_receipt_dist FROM po_headers_all poh, po_lines_all pol, po_line_locations_all poll, po_distributions_all pod, hr_all_organization_units hro WHERE poh.po_header_id = pol.po_header_id AND pol.po_line_id = poll.po_line_id AND poll.line_location_id =pod.line_location_id AND hro.organization_id = poh.org_id AND poh.segment1 = '5038' AND poh.org_id = 204;
ACCRUE_AT_RECEI PT_SHIP DISTRIBUTION_NU M ACCRUE_AT_RECEI PT_DIST
OPERATING_UNIT PO_NUMBER LINE_NUMBER SHIPMENT_NUM
ACCRUED_FLAG
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Vision Operations
5038
Vision Operations
5038
Question: Why is the ACCRUED_FLAG updated from Y to N when closing the Purchasing period? The update which takes place allows for the purchase order distribution to be considered for next month's accrual process. If the flag were not updated, then the following month's run of the Receipt Accrual Period-End Process will not consider the purchase order distribution for accrual.
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Steps of The Purchasing Receipt Accrual Period-End Process

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Scope and Application

POR: Apply Expense Account Rules to Favorite Charge Accounts

Step 2: Purchase Order Creation - Details to Observe

SELECT hro.name operating_unit, poh.segment1 po_number,

OPERATING_UNIT PO_NUMBER LINE_NUMBER SHIPMENT_NUM ACCRUE_AT_RECEIPT_SHIP DISTRIBUTION_NUM ACCRUED_FLAG ACCRUE_AT_RECEIPT_DIST

Step 6: Running the Receipt Accrual Period-End Process

c) Confirm the data is present in the GL_INTERFACE:

PO_NUM GL_INT_STAT ACT_DATE DOC_TYPE PO_HEADER_ID

d) Confirm the data also exists in the RCV_RECEIVING_SUB_LEDGER:

SELECT poh.segment1 po_number, poh.po_header_id, rsl.je_line_description, rsl.reference4, rsl.accounted_dr,

Supplies - Match Receipt

Supplies - Match Receipt

Supplies - Match Receipt

Supplies - Match Receipt

Step 7: Journal Import - Reversal Transactions

Step 8: Close the Purchasing Period/Open Next Purchasing Period

OPERATING_UNIT PO_NUMBER LINE_NUMBER SHIPMENT_NUM

Copyright (c) 2008, Oracle Corporation. All Rights Reserved.

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