R12 Upgrade Accrual

Reconciliation

Challenges

Veeresha Javli (VJ) www.bworld360.com vjavli@bworld360.com

Former Applications Architect, Oracle Cost Management, Globalization and Localization EBS Products

Co-founder of Landed Cost Management (LCM)

Consulting Manager, Oracle Consulting Services (CPG, Retail, Manufacturing)

www.linkedin.com/in/vjavli

11i10 Challenges• Functional Challenges

• Accrual Reconciliation across business functions were quite complex

• Hard to find the specific PO distributions that caused accrual discrepancies

• Accrual accounts were used in other accounts (vice versa) due to user errors resulted in wrong accrual balances and reconciliation issues that carried over to the future periods.

• Both Recoverable and Non-Recoverable Taxes included in Accruals

• Manual process for Accrual-Write Offs

• Technical Challenges

• Serious Performance issue resulted in delayed financial period close process.

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11i VS R12 Accrual Reconciliation Approach11i Accrual Reconciliation Approach

• Reconciliation rebuild retrieved data by transaction date and accrual account ID

• All PO transactions (fully invoiced, partially invoiced, un invoiced POs, written-off txns in the transaction date range retrieved

• Reconciliation Report by PO lines, reported many seemingly self-balanced lines making the report difficult to analyze

• Focus was on reconciling the aggregate Net balance to GL

• Manual Journal entries for Accrual Write-offs

R12 Accrual Reconciliation Approach

• Reconciliation rebuild by lowest common

denominator – PO Distribution ID with net accrual discrepancies

• Incremental build with to-date (cut-off date)

• PO distributions with net balance zero are eliminated in the process, reducing the volume and improving the performance

• Automatic Accrual Write-Off submissions

• One place Accrual Account definitions

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11i issues and R12 Enhancements

R12 Enhancements

• Enhanced Performance

– Incremental data load using from and to date

to load data with outstanding accrual balances

only

– Support writing off balances

• Increased Usability

– Headers and lines separation

– Summarization display

– AP PO data only

– Miscellaneous data only

– Mass write-off

• Automatic Accounting Creation

– Write-off will post to SLA as any other

distributions

11i issues

• Poor Performance

• Full data load causing years of accrual

distributions being loaded and reloaded

again

• Inflexibility and Ambiguity

Forms and Reports are data dumps. Difficult

to identify the PO Distributions to write off

Data can not be exported in excel format.

• Possibility for Errors

Manual write-off to GL can lead to errors and

mistakes

• No Summary Reporting

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R12 Accrual Reconciliation Enhancements

• Select Accrual Accounts in one single place

• Accrual Reconciliation Load Run with incremental build

• Net accrual balance with non-zero values only per PO Distribution Id

• Generated accrual write-offs ready to post to GL

• Improved performance enhancements

• Accrual Reports• Summary Accrual Reconciliation Report

• AP and PO Accrual Reconciliation Report

• Miscellaneous Accrual Reconciliation Report

• Accrual Write-Off Report

• WIP Accrual Write-Off Report

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11i10 Accrual accounting Flow

PO

General Ledger

(GL)

AP

INV

GL INTERFACE

WIP

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R12 Accrual accounting Flow

PO

Sub Ledger

Accounting (SLA)

General Ledger

(GL)

AP

INV

GL INTERFACE

WIP

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Before R12 Upgrade Key Considerations• 11i Accrual balance mismatch between product sub ledgers and

GL • Verify and compare the Accrual balances in PO, AP, INV, WIP product sub

ledgers by each accrual account to the accrual balance in GL

• If the Accrual Balance in GL is not matching with that of product sub ledgers (PO, AP, INV, WIP) with significant difference, it is of serious concern

• Verify that accrual accounts used in multiple business functions and non-accrual purpose (vice versa).

• Quite likely that there may be a custom logic in PO, AP, INV, WIP process, check for custom triggers that was placed on core Oracle EBS tables with a possible serious violation of Oracle standards.

• Custom programs accounted to accrual accounts with wrong process.

• Duplicate Write-Off Txns in 11i PO_ACCRUAL_WRITE_OFFS_ALL 8

Before R12 Upgrade Key considerations• Scenario at a Telecom client with serious accrual discrepancies

• Insert database trigger in MTL_MATERIAL_TRANSACTIONS caused multi-million dollar discrepancies between Inventory sub ledger and GL.

• Oracle Projects customization accounted to wrong accrual accounts.

• Every month, accrual load run from the very first historical period with back dated transactions resulted in improper accruals.

• 11i10 Accrual Reconciliation with Oracle core code customized to improve the performance for every month fresh rebuild from historical high volume data, resulted in wrong accrual reconciliation logic carried across periods.

• High volume of accrual write-off transactions due to inefficient process.

• Watch out for the back dated transactions • Directly inserted / updated to core Oracle tables, a serious violation of

oracle standards by several top tier consulting firms in the prior implementations that caused R12 Upgrade challenges.

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R12 Upgrade Key considerations• Accrual Reconciliation in R12 only consider data from SLA posted to

GL.

• Manual Journals and Adjustments made in GL are not considered.

• Ending balance from Account Analysis Report used to reconcile the Reconciliation Summary Report

• Only valid sources from Account Analysis Report for Accrual Reconciliation are:

Source Category

Cost Management Receiving

Cost Management Inventory

Cost Management WIP

Payables Purchase Invoices

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R12 Upgrade Key considerations• Following sources in the Account Analysis Opening Balances should

be eliminated or removed:

Source Category

Cost Management Accrual

Purchasing

MANUAL/SPREADSHEET

ENTRIES/Write Offs

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R12 Upgrade Key considerations• R12 SLA Upgrade Patch of historical data and impact on Accrual Load

• By default, only 6 months of accounting data are migrated to SLA. Only 6 months of R12 Accrual rebuild occurs.

• A separate patch exists to bring accounting data for 3 years.

• Care must be take if customer is using Oracle Projects (PA), since the SLA Upgrade patch process is different.

• If customer is loading more than 3 years of SLA accounting data, then check for the genuine rationale because it is quite likely that customer had messed up 11i10 Accruals and every time the Accrual Load run is being executed from the very beginning of an historical period in order to reprocess all the back dated transactions.

• For more than 3 years, Upgrade patch has to applied repetitively with observed performance issues.

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R12 Upgrade Key considerations• Incomplete R12 Upgrade and impact on Accrual Load

• AP Invoice Distributions missing after R12 Upgrade patch

• PO Receipt accounting distributions missing after R12 Upgrade patch

• Use Document ID : 980112.1 to upgrade missing data after SLA Post Upgrade

• CST: Accrual Age In Days• Indicates whether to use the last receipt date or last activity date for age in

days calculation.

• Last Activity Date: A PO distribution's age in days is determined by the last invoice date

• Last Receipt Date: A PO distribution's age in days is always determined by the last receipt date.

• Used in AP and PO Accrual Reconciliation Report

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R12 Accrual Accounts• Define all the accrual accounts without fail in the screen Select Accrual Accounts

Path: Purchasing > Accounting > Accrual Write offs

• Customers often forget to enter some accrual accounts resulted in incomplete Accrual Reconciliation since Accrual Load Run executes only on the defined accrual accounts.

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Accrual Reconciliation Data Accrual Reconciliation Data

Removed

Deleted

User Write Off the balance

Written Off Transaction DataWritten Off Transaction Data

Created

Inserted

Reversed

Inserted the

opposite

Write Off

User Reverse the Write Off transaction

Created

Inserted

Trigger the creation of the Write

Off transaction to represent the

amount being written off

Recreate the Accrual Reconciliation data being

previously written off

IncrementalLoad

Load of Accrual DataWith outstanding

balance

R12 Accrual Reconciliation and Write-Off

CST_RECONCILIATION_SUMMARY

CST_AP_PO_RECONCILIATION

CST_MISC_RECONCILIATION

CST_WRITE_OFFS

CST_WRITE_OFF_DETAILS

CST_RECONCILIATION_BUILD

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R12 Accrual Reconciliation and Write-Off

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R12 Accrual Reconciliation Load Run

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R12 Accrual Reconciliation Load Run

• CSTACCLB.pls : Get latest version with all the performance fixes.

• Ensure SLA Performance Patch applied, Generate Stats executed

• First Time Build• Date From: Min Transaction Date from SLA is picked as the Start Date• SLA Upgrade – How far one wants to go in historical data for Accrual

Load • Date To: User entered Date up to which Accrual Reconciliation is loaded • Two Step Process

a) 11i10 Accrual write-off migrated to R12 Accrual write off tables b) 11i10 Accrual data migrated to R12 Accrual Reconciliation tables

• Consecutive Run (Incremental Build) • Accrual Load Run executes Only for delta transactions from prior run

end date to the user entered date

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Accrual Write Off and Reconciliation Tables11i Accrual Tables

• PO_ACCRUAL_WRITE_OFFS_ALL

• PO_ACCRUAL_RECONCILE_TEMP_ALL

R12 Accrual Tables

• CST_WRITE_OFFS

• CST_WRITE_OFF_DETAILS

• CST_RECONCILIATION_SUMMARY

• CST_AP_PO_RECONCILIATION

• CST_MISC_RECONCILIATION

• CST_RECONCILIATION_BUILD (control table)

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References and Metalink Docs• FAQ R12 Essentials Of Accrual Accounting (Doc ID 827125.1)

• R12: Discrepancies with Accrual Reconciliation Report -Troubleshooting (Doc ID 1117353.1)

• Accrual Reconciliation Load Run Has Slow Performance (Doc ID 1490578.1)

• Doc ID 1478292.1 -R12 Accrual Reconciliation Diagnostics And Troubleshooting Guide

• Doc ID 1107953.1 -R12 Accrual Balance Mismatch Between Accrual Reconciliation Report

• Doc ID 866733.1 -How To Diagnose Inventory Accruals And Accrual Write Off Issues

• Impact of R12 Design in Procure To Pay Accounting Flow (Doc ID 429105.1) 20

References and Metalink Docs• Doc ID 1126025.1 - R12: Discrepancies With Accrual Reconciliation

Report For Consigned

• Doc ID 883557.1 - R12: How To Avoid and Fix Corruption in Data Transfer from SLA

• Doc ID 604893.1 - R12.0 and R12.1: FAQ for the SLA Upgrade: SLA Pre-Upgrade, Post-Upgrade, and Hot Patch

• Doc ID 1472099.1 - Missing Accounting Entries In SLA For Transactions In Upgraded Periods

• Doc ID 1478292.1 R12 Accrual Reconciliation Diagnostics And Troubleshooting Guide

• R12 Account Requirements For Inventory Accrual Reconciliation (Doc ID 824388.1)

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Q&AThank You!

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