Receivables Reconciliation - Detailed Information and Troubleshooting (Doc ID 2725870.1)

Last updated on JULY 05, 2023

Applies to:

Purpose

Overview

Reconciliation is the process by which the transactional data recorded in subledgers is compared with the accounting data generated by subledger accounting to create the journal entries that post to the general ledger. The reconciliation report provides a coherent view of the data from each of these modules: Receivables (AR), Subledger Accounting (SLA) and General Ledger (GL), to confirm their data agrees and is represented as intended, without corruption.

Use the Receivables to General Ledger Reconciliation report to facilitate the reconciliation of receivables data to the general ledger.

Receivables provides the tools to reconcile the subledger (AR) with General Ledger.

Internal reconciliation involves reconciling the customer accounts, transactions, and receipts. Once the transactions are posted to the general ledger, you can reconcile the subledger (AR) with the general ledger by verifying that all the correct journal entries were made.

A. How are accounts reconciled to general ledger?

• The Receivables to General Ledger Reconciliation report only reconciles accounts receivable for accrual basis accounting, and only reconciles accounting in the primary ledgers.
• The Receivables to General Ledger Reconciliation report reconciles the transaction types that impact the accounts receivable in general ledger. These include:

• Invoice
• Debit memo
• Credit memo
• On-account credit memo
• Chargeback
• Adjustment
• Applied receipt
• On-account receipt
• Unapplied receipt
• Unidentified receipt
• Bills Receivable
• Bills Receivable Application

• On-account credit memo refund amounts and on-account credit memo gain or loss amounts are included in the Invoices section of the Reconciliation report, because these transactions affect the open balance of the receivable amount of the credit memo. In all cases the intent is to close the credit memo, so both the original credit memo and the activity against it are displayed.
• The report also reconciles manual journal entries created in the Receivables subledger.

B. Steps to be completed before running the AR Receivables to General Ledger Reconciliation Report

Before running the AR Receivables to General Ledger Reconciliation Report, the following steps have to be completed.

1. Complete month-end activities such as importing billing information, applying receipts and approving adjustments.
2. Run the Create Receivables Accounting ESS program for the period to final account activity and post to the general ledger.
3. Set the Receivables period status to Close Pending.                                                                                                                                                                                                                                                                                                                                          

When you drill down in the Receivables to General Ledger Reconciliation report, you see real-time details that make up balances from the summary report. In order to guarantee that the summary balance for each type of activity agrees with the drilldown detail, you must ensure that you limit access to an accounting period when you run the Extract Reconciliation Data from Receivables to General Ledger program. Otherwise additional activity might be added to that period after the extract has run.

This is the reason why it is recommended to set the accounting period status to Close Pending.

You can reopen the period if adjusting entries need to be added. However, you must ensure that the subsequent accounting period is open, in order for business operations to continue during the reconciliation process.

C. Reconciliation

The Receivables to General Ledger reconciliation process consists of two steps:

Step 1: Create Data Extract - This process prepares and populates the data into the Interim Tables.

To create the data extract, run the Prepare Receivables to General Ledger Reconciliation program to select the data for the Summary section of the Receivables to General Ledger Reconciliation Report.

This must be run prior to viewing the report in Business Intelligence.

Scheduled Process (ESS) Name: Prepare Receivables to General Ledger Reconciliation

Description: Prepares transaction and accounting information for reconciling Oracle Fusion Receivables to Oracle Fusion General Ledger.

Below is a screen shot of the Prepare Receivables to General Ledger Reconciliation ESS

Parameters:

1. *Request Name:

                    Enter a name that is descriptive of this extract. This request name will be selected when the actual reconciliation report is run.

   Consider using a name that indicates the accounting period, date, and time, especially if you are planning to create multiple extracts.

2. *Ledger:               

The ledgers available for selection are based on your security assignment.

1. Business Unit:

                  Use this parameter if you need to reconcile by a specific organization.

Note - If your business unit is implicitly mapped to the primary balancing segment value in the chart of accounts, you can run the report to reconcile by either business unit or ledger. If there is no implicit mapping, then you must reconcile by ledger.

This mapping is not defined anywhere in Oracle Fusion Receivables or Oracle Fusion General Ledger.

1. *Accounting Period:

                  Either Open or Closed accounting periods can be selected based on the requirement.

2. Include Intercompany Transactions:

                  You can include or exclude Intercompany transactions, or you can reconcile by Intercompany activity only.

3. Include On-Account Items:

                  You can include or exclude on-account activities, unapplied receipts, and unidentified receipts.

Note - You may want to exclude these activities if they typically post to non-receivable accounts. If you include activities that post to non-receivable accounts, this can cause an accounting difference.

1. Include Unapplied and Unidentified Receipts Indicator:
2. Account:

                 You can select values from any of the segments of the accounting flexfield.

    

   The Natural Account segment values must have the Financial Category of Accounts Receivable assigned in your general ledger setup in order for the extract and report to work properly.

If you are reconciling by business unit, select the range of balancing segment values implicitly mapped to your business unit.

If you are reconciling Intercompany activity, select the range of Intercompany accounts. These accounts must have the Financial Category of Accounts Receivable assigned.

If you are reconciling everything, you do not need to select any values. The report automatically selects data for Receivables accounts that have the Financial Category of Accounts Receivable assigned.

*Required fields

Step 2: Receivables to General Ledger Reconciliation Report:

This is the actual report that shows the reconciliation details based on the data that was prepared in the Step 1.

The report displays the beginning and ending receivables balances and all activity for the period, matching the receivables aging.

The report provides additional visibility to information by providing drilling down capabilities to supporting journal and transaction details, eliminating the need to navigate to multiple screens or generating multiple printed reports.

Use this report to facilitate the reconciliation of receivables data to the general ledger.

Navigation: Navigator > Receivables > Accounts Receivable > Tasks > Receivables to Ledger Reconciliation

Receivables to Ledger Reconciliation

In the Receivables to Ledger Reconciliation UI select the Ledger and Request Name used when running the Prepare Receivables to General Ledger Reconciliation ESS program in Step 1.

The Receivables to General Ledger Reconciliation Report is displayed.

The report consists of two regions:

1. Data Preparation Attributes – displays the parameters used to when running the data extract program the report is based on
2. Receivables to Ledger Reconciliation Summary – displays the receivables and general ledger balances being reconciled and related variances.

Drill down on any amount in the summary report's Difference column to display the details of the differences report for that item

The Differences Detail reports display the real-time details that make up balances from the Summary report, and indicate potential causes for differences between actual and reconciling amounts.

Differences between Transactional and Accounted Amounts

 Ideally the Summary report should display no differences between receivables transactional amounts and accounted amounts.

 Common reasons for differences between transactional amounts and accounted amounts include:

• Transactions that are not accounted.
• Transactions with subledger accounts that fall outside the account range of the report.
• Transaction amounts do not agree with the subledger journal line amounts.
• Journals are posted to the subledger or general ledger that did not come from Receivables.
• Subledger journals were not transferred or posted to general ledger.

Troubleshooting Steps

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