Accrual Reconciliation Report (Oracle Purchasing Help)


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Accrual Reconciliation Report

The Accrual Reconciliation Report can be used to analyze the balance of the Accounts Payable (A/P) accrual accounts. You can accrue both expense and inventory purchases as you receive them. When this happens, you temporarily record an accounts payable liability to your Expense or Inventory A/P accrual accounts. When Payables matches and approves the invoice, Payables clears the A/P accrual accounts and records the liability from the supplier site.

This report is available in two versions: Accrual Reconciliation Report and Accrual Rebuild Reconciliation Report. When you specify Accrual Rebuild Reconciliation Report, the report selects the accounting entries from the appropriate source (subledgers). This accounting information resides in a temporary table and remains until you rebuild this information again. When you specify Accrual Reconciliation Report, the report does not reselect this information. Instead, it merely reports using the pre-existing information. This feature saves you time, because you do not have to recreate the accrual information every time you submit a report. Typically, you specify the Accrual Rebuild Reconciliation Report at month end and use the Accrual Reconciliation Report for interim reports. Note that the title of the report remains the Accrual Reconciliation Report even if you specify the rebuild option.

After you have entered your receipt transactions and matched your invoices, you can run the report for any transaction date range and identify any differences between your PO Receipts and A/P Invoices. This report also displays any miscellaneous transactions recorded in error to your accrual accounts. These miscellaneous transactions or transactions unrelated to purchase order receipts may be from Payables, Inventory, or Work in Process (depending on your installation). After you have researched the reported accrual balances, you can use the Accrual Write-Offs window to indicate which entries you wish to remove and write off from this report. And, after you have written off these entries, you can use the Accrual Write-Off Report as supporting detail for your manual journal entry.

The Accrual Reconciliation Report helps you monitor potential problems with purchasing and receiving activities that can affect the accuracy of your A/P accrual accounts. You can review this report to identify the following problems in receiving, purchasing, inventory, work in process, or accounts payable transactions:

Quantities differ between receipts and invoices

Incorrect purchase order or invoice unit prices (previous releases only)

Discrepancies in supplier billing

Accounts payable matched invoice to wrong purchase order or wrong purchase order line

Receiving clerk received against the wrong purchase order or wrong purchase order line

Miscellaneous inventory or work in process transactions that do not belong to the accrual accounts

Payables entries for sales tax and freight that do not belong to the accrual accounts. See: Overview of Receipt Accounting.

If you use Inventory, this report automatically reconciles your activity for all inventory organizations. If you use Work in Process for outside processing receipts, this report also reconciles all work in process activity for all organizations.

In addition, the Accrual Reconciliation Report supports multiple A/P accrual accounts. In this case, the report groups information by each account. When you define your purchase order requisitions or orders, the Account Generator processes create your A/P accrual accounts. Typically, you use only one A/P accrual account for all of your inventory organizations. However, for certain situations you may want to use more.

If you used Inventory, Purchasing and Payables in a prior release, the Accrual Reconciliation Report displays any invoice price variance from these entries. In Release 10, you do not have any invoice price variance remaining in your A/P accrual accounts, since Payables records invoice price variances as you match and approve the invoices. However, by displaying any invoice price variance from the previous release, you can resolve any open issues using the Release 10 report. If you did not use the previous release, the Invoice Price Variance column is usually zero.

The report prints the following Accrual Transaction types:

Accounts Payable Accrual Transactions

A/P Line Match	A/P invoice matching transaction for which there is a receipt against the same purchase order and purchase order line.
A/P PO Match	A/P invoice matching transaction for which there is a receipt on the correct purchase order but against a different purchase order line.
A/P Item Match	A/P invoice matching transaction for which there is a receipt for the item but against a different purchase order and purchase order line.
A/P No Match	A/P invoice that has no corresponding receipt matched to it. However, this invoice is for a valid purchase order for an item you intend to receive.
A/P No Item	A/P invoice matching transaction matched to a purchase order line with an invalid item number. The item is not in your item master but is present on your transactions. This is usually caused by incorrect data conversion from a legacy system. The report lists the reciprocal of the transaction amount in the Invoice Price Variance column.
A/P No PO	A/P transaction charged to the A/P accrual account that is not matched to any purchase order. Such a transaction should typically be charged to an expense account. The report lists the reciprocal of the transaction amount in the Invoice Price Variance column.
Exchange Rate Var	A/P invoice exchange rate variance charged to the A/P accrual account in error. You can use the Accrual Write-Offs window to remove this entry from the report. The report lists the reciprocal of the transaction amount in the Invoice Price Variance column.
Invoice Price Var	A/P invoice price variance charged to the A/P accrual account in error. You can use the Accrual Write-Offs window to remove this entry from the report. The report lists the reciprocal of the transaction amount in the Invoice Price Variance column.

Purchasing Accrual Transactions

Receive	Receipt transaction from a purchase order into receiving.
Deliver	Receipt transaction from a purchase order into receiving, and then delivered to its destination.
Return to Supplier	Purchase order return from receiving to the supplier.

Inventory Accrual Transactions The Accrual Reconciliation Report lists any Inventory transaction to the A/P accrual account. Typically, these material transaction types are Account issue, Account receipt, Account alias issue, Account alias receipt, Miscellaneous issue, or Miscellaneous receipt transaction. Usually, these transactions should not be charged to the A/P accrual account.

Work in Process Accrual Transactions The Accrual Reconciliation Report lists any Work in Process transaction to the A/P accrual account. Typically, these are Assembly scrap transactions that are charged to the wrong account.

The report prints the unit of measure for the purchase order receipt, the invoice, the inventory transaction, or work in process transaction.

The Transaction Quantity is the quantity received or the quantity invoiced, depending on the type of transaction. Quantities received are negative since purchase order receipts credit the A/P accrual account. Quantities invoiced are positive since invoices debit the A/P accrual account.

The Unit Price is the purchase order price of the receipt, the actual invoice price, or the transaction unit cost. If the purchase order is in a foreign currency, the purchase order price is in the base currency of your set of books using the currency conversion rate from the purchase order at the time of receipt.

The Transaction Amount is the total amount posted by the transaction source to the A/P accrual account. The total of this column should add up to the balance of your A/P accrual account in your general ledger, by source (subledger). Purchase order receipts are negative to indicate a credit. Payables invoices are positive to indicate a debit. This amount is in the base currency for your set of books.

For prior release transactions, the report prints the actual invoice price variance. The total of this column represents the total invoice price variance for the reported transactions. If you did not use the previous release, the Invoice Price Variance column is usually zero. You can use the Accrual Write-Offs window to remove any invoice price variance related transactions from this report. This amount is in the base currency for your set of books.

If you used Inventory and Payables in a prior release, the Net Accrual Balance column represents the net balance of the A/P accrual account after you moved the IPV out of this account. If you did not use a previous release, this column usually has the same value as the Transaction Amount column. This amount is in the base currency for your set of books.

Report Summary By Source and Accrual Transaction

Purchasing displays the report totals by each transaction source for all transactions in your report. Within each transaction source, Purchasing displays a summary total for each accrual transaction. Analyze the accrual transaction summary totals for purchase order receipt, invoice, and other miscellaneous transactions.

If you do not display written off transactions, a summary column displays the total write-offs not included in the report. If you do not display zero balance purchase order line entries, a summary column displays the accrual transaction totals not included in the report. Using the total column, you can balance this report by transaction source to your general ledger.

Prerequisites

If you install Purchasing and Oracle Payables, you can run this report. If you accrue expense purchases on receipt, you can reconcile your expense A/P accrual account using this report. If you accrue expense purchases at period end and you do not perform inventory receipts, no information will be available to report. If you have installed Inventory or Work in Process, the Accrual Reconciliation Report also displays any inventory or work in process transactions for the accrual accounts.

Attention: Most commercial installations accrue expense receipts at period end because this information is not required as the receipt occurs. If you accrue expense purchases on receipt, you have more entries to reconcile in the A/P accrual accounts. In addition, if you also receive inventory, you need to use the Receiving Value By Destination Account Report to break out your receiving/inspection value by asset and expense.

In addition, for transactions to appear on this report, you should download the transactions to the General Ledger interface. For Payables, you need to create journal entries for the invoices. For Purchasing, all transactions are automatically transferred to the General Ledger interface. For Inventory and Work in Process, you must first perform a GL transfer or period close, for transactions to appear on this report. The Accrual Reconciliation Report requires the transactions to be transferred to the General Ledger interface to ensure the report balances to your general ledger.

Attention: Since the Accrual Reconciliation Report is 180 columns wide, you need to use a printer with this capability.

Report Submission

In the Submit Requests window, select Accrual Reconciliation Report or Accrual Rebuild Reconciliation Report in the Name field.

Report Parameters

Title

Enter a user defined Title for the report.

Sort By

Use the Sort By feature to produce a report customized to your specific needs. Choose one of the following options:

Item Sort the report by item (aging date, account, item, and purchase order line). When you sort by item, the item heading is printed.

Supplier Sort the report by supplier (aging date, account, supplier, and purchase order line). When you sort by supplier, the supplier name heading is printed.

GL Dates From/To

Enter the beginning and ending general ledger dates. These are also known as the beginning and ending transaction dates.

Items From/To

Enter the beginning and ending item numbers.

Suppliers From/To

Enter the beginning and ending supplier names.

Include All Transactions

Enter Yes or No to indicate whether you want to print zero balance purchase order line subtotals on the report. The report adds up all receipts and invoices by purchase order line. When you specify Yes and the net purchase order line amount is zero, the report prints all receipt or invoice entries for that line. When you specify No, the report considers the Transaction Amount Tolerance and Transaction Quantity Tolerance parameters. When you choose the Accrual Rebuild Reconciliation Report, the default is No. When you choose the Accrual Reconciliation Report, the default is Yes.

Suggestion: To minimize the size of the report, you should specify No for this option. However, if you want to see all accrual entries, you should specify Yes.

Transaction Amount Tolerance

If you selected No for Include All Transactions, specify the net amount below which purchase order line transactions are not included in the report.

Transaction Quantity Tolerance

If you selected No for Include All Transactions, specify the net quantity below which transactions are not included. This condition is checked only if the transaction amount tolerance is satisfied.

Include Written Off Transactions

Enter Yes or No to indicate whether you want to print written off entries on the report. When you specify Yes, an asterisk appears in the far right column to indicate a written off transaction. By selecting No, you decrease the report size. The default is No.

Aging Number of Days

Enter the number of days you would like the report to group information. For example, if you enter 60, for 60 days, the report first groups all purchase order lines that have the earliest transaction date in the past sixty days, and then groups the next set of lines with the earliest transaction date from 60 to 120 days, and so on. If you do not specify a number, the report displays all receipts and invoices together. This report parameter helps you separate your older activity from your current activity. When you enter a number of days, a subheading appears on the report to indicate the to and from range of days for each group of information.

Item	Sort the report by item (aging date, account, item, and purchase order line). When you sort by item, the item heading is printed.
Supplier	Sort the report by supplier (aging date, account, supplier, and purchase order line). When you sort by supplier, the supplier name heading is printed.