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This article shows you how to discuss the monthly and annual process of the Oracle ERP system. The content is concise and easy to understand, which will definitely brighten your eyes. I hope you can get something through the detailed introduction of this article.

Discussion on monthly and Annual process of Oracle ERP system

Monthly and annual settlement processing is a special and important business operation of enterprise finance. In the process of implementing and popularizing the Oracle ERP system, how to combine the current accounting system and practice, make full use of the functions of the software, and do a good job of closing and opening accounts is a hot issue that perplexes many enterprise financial personnel and even implementation consultants. For this reason, the author puts forward some solutions for colleagues' reference. As time is tight, mistakes and omissions are inevitable. Welcome to discuss and correct them.

I. what is monthly settlement processing

Usually, the financial department of the enterprise will check and settle the accounts of that month at the end of each month. For example, carry forward the manufacturing expenses of the current month into production costs, share public expenses among departments, and so on; and produce and print relevant reports and analysis reports. Last but not least, the current period will be closed and the next month will be opened to start the next month's accounting processing.

Oracle ERP is an e-commerce system composed of multi-function modules, including account processing and transaction processing, in which the general ledger is called account processing system, while other modules, such as receivables, payables, assets and inventory, are called business processing systems, which are habitually called subsystems. Because a large amount of business data is completed in the subsystem, the Oracle monthly settlement process has not only stayed at the level of the general ledger system, so it is necessary to check the accounts of the subsystem in a certain order, and close the subsystem accounting period, and then close the general ledger period at last. It is generally recommended that the monthly closing process be carried out in the following order:

Close purchase period > > close inventory period > > close payable period > > close asset period > > close accounts receivable period > > close general ledger period

Second, monthly settlement treatment and period closure

The monthly closing business of the sub-module is usually to ensure that all the monthly business has been completed, run the corresponding report in the sub-module, and reconcile with the corresponding account in the general ledger. Find the reasons for the differences and adjust them reasonably in the general ledger to make the accounts match.

Let's take a look at the period during which the subsystems are shut down sequentially:

I) closing the procurement accounting period

1. Run the "purchase order detail report", "purchase order and release detail report", "Open purchase order report (by purchaser)" and "Open purchase order report (by cost center)" to show the quantity ordered and the received quantity, and check them (path: report > > run)

2. Run the "uninvoiced receipt report" to view and check the data (path: report > > run)

3. For the end-of-period accrual accounting of expense procurement, run the "receive accruals-end" process to import the purchase journal into the general ledger (path: report > > run)

4. And close the purchase period (path: setting > > Financial system > > Accounting > > controlling the purchase period).

II) closing the inventory accounting period

1. Ensure that all transactions have been completed and imported into the general ledger for the current month.

2. Check whether there is a pending transaction in the current month, and ask the relevant personnel to handle it (path: view transaction > > pending material transaction)

3. Close the inventory accounting period (path: accounting closure period > inventory accounting period).

III) closing the accounting period receivable

Most of the business of the receivable module is based on the operation of the order management module and the inventory module, so the monthly settlement of the receivable module should not close the accounting period until after the monthly conclusion of the order management module and the inventory module.

1. Submit procedures such as "uncompleted invoice report" and "unwritten-off Collection Registration form" to check whether there are outstanding invoices, credit notices and receipts in "bookkeeping" status (path: statement > Accounting)

2. Run automatic invoice to ensure that the invoice of the current month has been fully imported from the order system (path: interface > > automatic invoice)

3. Run the program of importing the general ledger system to ensure that the invoices and receipts of the month have been fully imported into the general ledger system (path: interface > > general ledger management system)

4. Close the accounts receivable period (path: control > Accounting > Open / close period).

IV) closure of the accounting period payable

Most of the business of the payable module is based on the operation of the procurement module and the inventory module, so the monthly settlement of the payable module should not close the accounting period until after the monthly closure of the procurement module and the inventory module.

1. Run the invoice Registration program to check whether there are unapproved invoices, credit notices, etc. (path: other > > request > > run)

2. Run "accounts payable management system accounting process" and "transfer accounts payable to general ledger" to ensure that transactions in the current month are fully transferred to general ledger (path: other > request > > run)

3. Run "create batch increase" to ensure that the invoice information of purchasing fixed assets and projects under construction is transmitted to the fixed assets module (path: other > > request > > run)

4. Close the accounting period payable (path: accounting > > Control the payment period).

V) closing the accounting period of fixed assets

The asset module is generally closed after it is closed during the payable period to prevent the current procurement of fixed assets from being capitalized.

1. Please check whether there are any new fixed assets or projects under construction have not been imported (path: batch increase > > prepare batch increase)

2. Confirm that all assets are assigned to the allocation bank. If the asset is not assigned to the allocation bank, the depreciation process at the end of the period cannot be completed and the period cannot be closed. Run the Asset list report that is not assigned to any cost center to determine which assets are not assigned to the allocation line. Specify the allocation bank information for these assets. (path: other > request > > run)

3. Run the depreciation during the unclosed period to ensure that the depreciation journal accounts are correct and have been imported into the general ledger (path: depreciation > > run depreciation)

4. Run depreciation off period (path: depreciation > > run depreciation).

VI) adopt the monthly carry-over of profit and loss (optional)

If the enterprise needs to carry forward the profit and loss at the end of the month, it should also carry forward the income and expenses to the profit account of the current year as needed. Usually we use manual journal or regular journal to do it. Note that because the balance of each account needs to be reserved for report generation, it is common to define a virtual revenue account, a virtual expense account, and generate the following entries in the general ledger module:

Borrow: total income of this month in virtual income subject

Loan: virtual fee subject total cost of this month

Borrowing / loan: total income of this year's profit account-total expenses of this month |

VII) cost variance allocation

Premise: please make sure that the sub-module accounts have been imported into the general ledger and that all labor / import journals have been posted.

The following is a common practice, taking the cost difference allocation under the standard cost method as an example:

The differences in purchase prices and invoice prices shall be apportioned at the end of each month according to the month-end value weights of raw materials, self-made products, inventory goods and the cost of sales, and shall be apportioned as follows in the general ledger:

Borrow: cost of sales-products

Finished goods-difference

Semi-finished product-difference

Raw material-difference

Loan: cost difference-material price difference

Cost variance-invoice price difference

The differences in WIP material consumption, resource efficiency and manufacturing costs shall be apportioned at the end of each month according to the value of the products completed in the current month, and shall be apportioned as follows in the general ledger:

Borrow: cost of sales-products

Finished goods-difference

Semi-finished product-difference

Loan: cost difference-material quantity difference

Cost variance-resource efficiency variance

Cost variance-manufacturing cost variance

For standard cost adjustment differences, the month-end value weights of raw materials, self-made parts, finished products and sales costs shall be apportioned as follows in the general ledger:

Borrow: cost of sales-products

Finished goods-difference

Semi-finished product-difference

Raw material-difference

Loan: cost difference-cost adjustment difference

Using the average cost method, the differences are generally small and can be carried forward directly to the cost of sales in the current month. If it does need to be apportioned, it can also be apportioned according to the principle of similar standard cost differences.

VIII) closure of the general ledger accounting period

1. After all the journals have been posted, run "trial balance-details" to check the balance and make sure it is correct (path: other > > request)

2. Close the general ledger accounting period (path: settings > > on / off).

Usually, the enterprise uses the statement method at the end of the month (that is, only the statement is issued without actually carrying forward the profit and loss), and all income and expenses are carried forward to the profit account at the end of the year.

If we do not need any year-end entries, we will directly open the first period of the new fiscal year to start the concurrent process to update the account balance. When the first period of the new fiscal year is opened, the system will automatically settle the income statement and post the difference to the retained earnings account specified in the accounting set.

If we need to generate annual closing entries, please refer to the following practice:

In order to facilitate the balance of the period after year-end processing from being affected by the year-end entry, we usually set the accounting period to 13 periods per year (one adjustment period at the end of the year) and 14 periods (one adjustment period at the beginning of the year and one adjustment period at the end of the year). The year-end entries are completed within the adjustment period.

During the December period at the end of the year, after all accounting processing is completed, the December period is closed and the year-end adjustment period is opened. If you need to create an actual settlement journal entry to display the record of carrying forward the income statement account to retained earnings, please submit the close process-create income statement to close the journal program, which creates an auditable closing journal entry. If local accounting rules require you to settle your balance sheet, submit the close process-create a balance sheet to close the journal.

In addition, year-end retention processes can be performed to identify outstanding purchase orders and apply for retention, cancel some or all of the retention, and carry forward the retained, budgeted and available fund balances to the new fiscal year. If the retention money is not carried forward, it may be necessary to cancel the existing application and purchase order containing the retention payment.

IV. three kinds of balance-over amount of annual settlement treatment.

I) how to carry forward year-end profit and loss

When we open the first period of the new fiscal year, the system will automatically transfer the balance of all income and expense accounts to the retained earnings account. This will not generate any credentials.

If you need to generate the corresponding carry-over vouchers, you need to submit the "close process-create income statement to close the journal" program to automatically create the required vouchers.

Path: (GL) other > request > > Standard

The program generates a journal to settle the year-to-date (YTD) actual balance within the scope of a revenue and expense account. You can submit this program for any open period, in other words, you can also use this program to make a monthly profit and loss settlement.

1. Period: the default is the most recently opened period, which is usually designated as the adjustment period that represents the last day of the fiscal year.

2. Account from and to: this range can cover multiple balanced segments and can include a complete list of subjects. The system only withdraws the balance of income and expense accounts within the specified range.

3. Settlement account: usually the retained earnings account in the balance sheet. If you want to settle multiple balance segments, the system creates a separate settlement account for each balance segment.

4. Income offset account (optional): you can enter income statement account.

Category: if you do not enter an income offset account, the system defaults to "close the income statement"; if you enter an income offset account, the system defaults to "income offset".

If the income statement balance is in both standard and foreign currencies, the settlement process generates a journal batch that will contain separate journals for each processing currency. For the base currency, because the conversion amount is not applied, the journal will have only the input amount. For foreign currencies, the journal will have both input and conversion.

If the income offset account is not entered, the system adjusts the YTD balance of each income and expense account within the scope of the account to zero, and the amount posted to the retained earnings account will become the total net YTD balance of the income and expense account. The resulting settlement entry is as follows

Borrow: income breakdown subject

Loan: detailed course of expenses

Loan: retained income

Note that in fact, for the entries generated, the retained income bank has figures for all borrowers, and there is no offset to net; and if the borrowers of income and expense accounts have balances, the same entry bank generated by the system also has figures for borrowers.

If you enter an income offset account, the system will not adjust the income and expense accounts within the specified account range to zero. However, the program calculates the combined net amount of the income and expense account (this total includes the balance in the offsetting account). It then posts the aggregate net amount to the corresponding credit in the income set-off account, if the income exceeds the expense. The resulting settlement entry is as follows

Borrow: income offset subject

Loan: retained income

The effective date of the balance date entry is the last day of the period you specify in the parameters window, usually the last day of the fiscal year, the adjustment period. After we review the journal generated by the system and post it, the balance of the income and expense account transferred to the retained earnings account is zero.

When we open the first period of the new fiscal year, the system will automatically transfer the balance of all income and expense accounts to the retained earnings account. However, since the balance of the income and expense accounts transferred to the retained earnings account has reached zero after the posting date, the process of opening the new fiscal year will not transmit the balance and will not have any other impact on retained earnings.

If income and expense adjustments need to be made after the opening of the new fiscal year, the posting retroactive adjustment automatically updates the opening balance of the retained earnings account for all open accounting periods of the new fiscal year. However, the amount in the settlement journal does not reflect the adjustment. To be accurate, you must first write off the settlement journal, post it, enter adjustments, and then run the create income statement settlement journal program and post it.

II) how to carry forward the balance sheet at the end of the year (not recommended)

If local accounting rules require the balance sheet to be settled, it is best to define that the accounting calendar includes two adjustment periods: one is the last day of the fiscal year to be settled, and the other is the first day of the new fiscal year. Run and post during the last adjustment period of the fiscal year to be settled, and write off the settlement journal of the balance sheet to re-fill the balance sheet account during the first adjustment period of the new fiscal year. This does not affect the account balance during the reporting period.

Note: the system only settles the base currency balance and the foreign currency conversion amount, and the foreign currency balance will be ignored.

Path: (GL) report > request > > Standard

1. Period: defaults to the most recently opened period, usually designating an adjustment period that represents the last day of the fiscal year.

2. Account from, to: can cover multiple balanced segments, and can include a complete list of subjects. The system only withdraws the balance sheet account balance within the specified range.

3. Settlement account: balance sheet settlement account.

4. Category: default "close balance sheet".

If you do not need to close the balance sheet, you usually just close the current period and open a new fiscal year.

III) treatment of year-end retention carry-over

First, in the procurement module, run batch cancellations to cancel selected outstanding purchase orders and apply for retention.

All reserved, budgetary and actual journal entries are then posted in the general ledger, and the retained balances and activities of the general ledger account can be reviewed in detail through the retention trial balance statement before the year-end carry-over.

After verification, close the last period of the current year, open the first period of the next fiscal year, open the next reserved year, and open the next budget year. Then carry forward the retention money (otherwise all retention payments will automatically become zero):

Path: (GL) Journal > > generate > > carry forward

1. Carry-over rules: retention only-the system will calculate the retained balance up to the end of the year and carry forward the balance to the opening balance of the first period of the next fiscal year; retention and retained budget-the system will calculate the retained balance up to the end of the year, add the retained balance to the budget balance, and then carry forward the total to the opening balance of the first period of the next fiscal year. Available funds-the system calculates available funds by subtracting year-to-date budget balances from actual and retained balances so far last year. The calculated amount is then carried forward to the opening balance of the first period of the next fiscal year.

2. Type of retention: please enter the type of retention to be carried forward. Select all to carry forward the amounts of all retention types.

3. Budget: enter the name and organization of the budget.

4. Period from and to: the system will calculate the year-to-date amount based on the starting period, but will not update the balance of the existing starting period.

5. Carry-over scope: the system is only for the accounts within the input scope and the account carry-over balance allocated to the designated budget organization.

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