Receiving Inventory Account Reconciliation - Troubleshooting (Doc ID 1390813.1)

Last updated on JULY 24, 2023

Applies to:

Purpose

The purpose of this document is to provide the steps to confirm the Receiving Inventory Account reconciles to the GL.  It will provide the necessary reports and reconciliation steps.  Then in cases where there are discrepancies in the data, corrective actions are provided.  The target audience for this document is Oracle Support Engineers and Consultants, who assist clients or internal employees to achieve this goal. 

Functionality:

Receiving Inventory Account also known as Receiving Inspection Account has to be specified for each inventory organization, using the below navigation:

Navigation : Purchasing Responsibility> Setup: Organization > Receiving Options > Select the Inventory Organization > Specify Receiving Inventory Account

If a Purchase Order (PO) is set to accrue 'At Receipt' then the Receiving Inventory Account will be debited during the RECEIVE transaction and the Receiving Inspection Account will be credited during the DELIVER transaction. If all received goods are delivered then there should not be any balance in the Receiving Inspection Account.

If the PO is set to accrue at 'Period End' then the Receiving Inventory Account will never be accounted.

To see if the accruals are set 'At Receipt' or 'Period End' navigate as follows:

Navigation: Purchasing Responsibility> Setup: Organizations > Purchasing Options > Select Operating Unit > Receipt Accounting

The below reports can be run to assist when reconciling the Receiving Inventory Account with the GL:

1. Receiving Value Report
2. Receiving Account Distribution Report
3. Material Account Distribution Report
4. WIP Account Distribution Report

Receiving Value Report
The Receiving Value report shows item quantity, valuation, and detailed receipt information of the goods in the receiving inspection location. The Receiving Value report is run specific to an inventory organization. If the same Receiving Inventory Account is  specified for multiple inventory organizations then the Receiving Value report has to be run for each of those inventory organizations separately.The Receiving Value report picks records with 'RECEIVING' supply type from 'MTL_SUPPLY' table.

Run the report with parameter 'Include Period End Accruals' = 'No' because receipts against PO shipments set to accrue on period end will not hit Receiving Inventory account. Also run the report with parameter 'Include One Time Items' = 'Yes' , this will ensure if any one time item is set to accrue on receipt will be included in the report output.

Receiving Account Distribution Report
The Receiving Account Distribution report lists the accounting distributions for your receiving transactions. This report supports the distributions created for the following transactions:
- Purchase Order Receipts
- Purchase Order Receipt Adjustments
- Purchase Order Returns to Supplier
- Deliver to Expense Destinations
- Return to Receiving from Expense Destinations
- Match Unordered Receipts

The report picks data from ‘rcv_receiving_sub_ledger’ table. Run the report with ‘Date To’ same as the ‘As on Date’ specified in Receiving Value Report and with Receiving Inventory account specified in ‘Account From’ and ‘Account To’.

Material Account Distribution report
This report supports the distributions created for the following transactions:
- Deliver to Inventory Destinations
- Return to Receiving from Inventory Destinations

The report picks data from ‘mtl_transaction_accounts’ table. Run the report with ‘Transaction Date To’ same as the ‘As on Date’ specified in Receiving Value Report.
and with Receiving Inventory account specified in ‘Accounts From’ and ‘To’. To restrict the report output to only Purchase order receipts, run the report with parameter 'Transaction Source Type' = 'Purchase Order'.

Work in Process (WIP) Account Distribution report
This report supports the distributions created for the following transactions:
- Deliver to Shop Floor Destinations
- Return to Receiving from Shop Floor Destinations

This report picks data from ‘wip_transaction_accounts’ table. Run the report with  ‘Dates To’ same as ‘As on Date’ specified in Receiving Value Report and with Receiving Inventory account specified in ‘Account’ . The valid transaction types to be considered in this report while reconciling Receiving Inventory account are 'Outside Processing' and 'Direct Shopfloor Delivery' .

To ensure the receipt accounting entries in Receiving, Material and WIP subledgers are correct, the Receiving Value report total has to match with the sum of the above three reports ran for the specific receiving inventory account.

To ensure all individual subledger accounting entries are transferred to the GL and posted, the Receiving Value report total must match to the Receiving Inventory Account balance in the Account Analysis report or Trial Balance submitted.

Note: In an India Localization environment users should not compare the Receiving Value report total with the GL balance, because the Receiving Value report does not include the localization taxes hitting the Receiving Inventory Account. In such cases the recommended approach is to deliver all the goods in the receiving bay and ensure the Receiving Value report total is zero, then check if the GL balance is also zero.

Troubleshooting Steps

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