Chapter 9. End of Period Processing

In this chapter, we will cover:

• Closing Payables

• Closing Purchasing

• Closing Receivables

• Closing the Inventory

• Closing the General Ledger

Introduction

At the end of every period, accounting books need to be closed. In this chapter, we will look at the core steps required to close the financials periods.

The following diagram shows a typical period end process:

1. 1. The bank statements are reconciled in Cash Management. Additional miscellaneous transactions are created.

2. 2. All the transactions for the period are completed in the Subledger. All outstanding issues are resolved.

3. 3. Run the Invoice Validation Report in Payables.

4. 4. Review and resolve holds in Payables.

5. 5. Run Purchasing Receipt Accruals.

6. 6. Run Mass Additions Create for Assets.

7. 7. Post Mass Additions.

8. 8. Run Depreciation.

9. 9. Create Accounting for transfers from the Subledgers to the General Ledger.

10. 10. Run Payables Accounting Process to transfer to the General Ledger.

11. 11. Run Receivables to transfer to the General...

Introduction

At the end of every period, accounting books need to be closed. In this chapter, we will look at the core steps required to close the financials periods.

The following diagram shows a typical period end process:

1. 1. The bank statements are reconciled in Cash Management. Additional miscellaneous transactions are created.

2. 2. All the transactions for the period are completed in the Subledger. All outstanding issues are resolved.

3. 3. Run the Invoice Validation Report in Payables.

4. 4. Review and resolve holds in Payables.

5. 5. Run Purchasing Receipt Accruals.

6. 6. Run Mass Additions Create for Assets.

7. 7. Post Mass Additions.

8. 8. Run Depreciation.

9. 9. Create Accounting for transfers from the Subledgers to the General Ledger.

10. 10. Run Payables Accounting Process to transfer to the General Ledger.

11. 11. Run Receivables to transfer to the General Ledger.

12. 12. Run Inventory to transfer to the General Ledger.

13. 13. Post Journals in the General Ledger.

14. 14. Run Journal Import.

15. 15. Post Journals in the General Ledger...

Closing Payables

At the end of a period, payables transactions are transferred to the General Ledger and Assets. In this recipe, let's close the payables period for March 2011.

Getting ready

Before we can close Payables, we need to complete the following:

1. 1. Bank statements in Cash Management must be reconciled and all issues resolved.

2. 2. Miscellaneous transactions are completed for transactions in Cash Management, for example, bank charges are entered in Payables from Cash Management.

3. 3. Transactions for the period have to be completed. For example, invoices, prepayment, and payments.

4. 4. Review the Uninvoiced Receipts Report from Purchasing for receipts not yet invoiced. When the receipt accrual is run from purchasing at the end of the period, journal entries are created for the amount of the receipt liabilities.

5. 5. Ensure that eligible invoices are approved in readiness for payment.

6. 6. Review and resolve holds placed on the invoices.

7. 7. Complete all payment runs for outstanding invoices due...

Closing Purchasing

At the end of the purchasing period, we need to accrue for expense Items received from the supplier, but not yet invoiced before we close the period. In this recipe, we will close the period of March 2011 for Purchasing.

Getting ready

Before we can close Purchasing, we also need to:

1. 1. Complete transactions for the period, including requisitions, purchase orders, releases, receipts, and returns.

2. 2. Enter all receipts.

3. 3. Complete the Payables Period-End Process.

How to do it...

Let's start by reviewing the uninvoiced receipts report, to review the receipts from our suppliers that have not yet been invoiced:

1. 1. Select the Purchasing responsibility.

2. 2. Navigate to Other | Requests | Run.

3. 3. Select Single Request in the Submit a New Request window and select the OK button.

4. 4. In the Name field, enter Uninvoiced Receipts Report.

5. 5. Select Mar-11 in the Period Name field.

6. 6. Click on the Submit button to submit the request.

Let's view the Uninvoiced Receipts Report:

1. 1. Select View | Requests...

Closing Receivables

At the end of every period, receivables transactions need to be completed and reconciled. Transactions also need to be transferred to the General Ledger and the period closed. In this recipe, we will look at the process of closing the period of March 2011 for Receivables.

Getting ready

Prior to closing the period, the following steps need to be completed:

1. 1. Reconcile Bank Statements in Cash Management and receivables adjustments processed, for example, bank interest.

2. 2. Complete all transactions invoice, adjustments, credits, reversals, and receipts.

3. 3. Reconcile transactions customer balances, transactions, receipts, and bank statements.

4. 4. We can use the following formula to reconcile the Period-End balance:

Closing Inventory

At the end of a period Item, costs information needs to be transferred to the General Ledger before we can close the period. In this recipe, we will look at the process of closing inventory.

Getting ready

1. 1. Complete all transactions shipping, receipts, issues, and adjustments.

2. 2. Check Interface managers for outstanding transactions.

3. 3. Transfer transactions to the General Ledger using the Create Accounting Cost Management Program.

4. 4. Open the next period.

5. 5. Close the Payables period.

6. 6. Close the Purchasing period.

7. 7. Close the Receivables period.

How to do it...

Close Inventory Period automatically transfers summary transactions to the GL interface table. The prior period needs to be closed before we can close the period. To accomplish this, carry out the following steps:

1. 1. Select the Inventory responsibility.

2. 2. Navigate to Accounting Close Cycle | Inventory Accounting Periods.

	Value
Outstanding Balance at Start of Period	X
Transactions for the period	X
Adjustments for the period	X
Invoice Exceptions for the period	(X)
Applied Receipts for the period	(X)
Unapplied Receipts for the period	(X)
Period End Balance	(X)
	Nil...

3. Select the period Jun-08 and click on the Pending button to review the pending transactions...

Closing Inventory

At the end of a period Item, costs information needs to be transferred to the General Ledger before we can close the period. In this recipe, we will look at the process of closing inventory.

Getting ready

1. 1. Complete all transactions shipping, receipts, issues, and adjustments.

2. 2. Check Interface managers for outstanding transactions.

3. 3. Transfer transactions to the General Ledger using the Create Accounting Cost Management Program.

4. 4. Open the next period.

5. 5. Close the Payables period.

6. 6. Close the Purchasing period.

7. 7. Close the Receivables period.

How to do it...

Close Inventory Period automatically transfers summary transactions to the GL interface table. The prior period needs to be closed before we can close the period. To accomplish this, carry out the following steps:

1. 1. Select the Inventory responsibility.

2. 2. Navigate to Accounting Close Cycle | Inventory Accounting Periods.

Closing the General Ledger

An accounting period is closed in the General Ledger after all the accounting transactions have been completed for the period. The status of the period will determine whether transactions can be entered in the period. The status of the period can be Never Opened, Future Enterable, Open, Closed, or Permanently Closed. A Permanently Closed period cannot be reopened.

Getting ready

1. 1. Complete all Subledger transactions run the Create Accounting from the Subledgers to create the Subledger Accounting transactions. This populates the GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES tables.

2. 2. Import all Journals. This process populates the GL_INTERFACE tables.

3. 3. Post all Journals. This updates the GL_BALANCES tables.

4. 4. Run the Period Close Exception report in GL to ensure that there are no outstanding transactions in the Subledgers and GL.

5. 5. Run the trial balance.

6. 6. Perform reconciliations.

7. 7. Reverse previous period accruals.

8. 8. Enter Adjustments and Accruals and Post...