Procedures The following steps are performed while closing the period in Oracle Purchasing. 1.

Complete All Transactions for the Period Being Closed Ensure that all transactions have been entered for the period being closed. Complete all transactions for Oracle Purchasing: a) Complete Requisitions b) Complete Purchase Orders and Releases c) Complete Receipts and Returns Submit the Confirm Receipts Workflow Select Orders process in Purchasing to send notifications through the Web, email, or Notification Details Web page (accessible through the Notifications Summary menu in Purchasing) to requestors or buyers who create requisitions in Purchasing or iProcurement. The Confirm Receipts workflow sends notifications for items with a Destination or DeliverTo Type of Expense, a Routing of Direct Delivery, and a NeedBy date that is equal to or later than todays date. Requestors can create receipt transactions by responding to the notification. d) Print or Archive all new Purchase Orders e) Respond to all Workflow Notifications Notifications may either require action (e.g. notify approver approval required), or are FYI notifications only (e.g. notify requestor requisition has been approved). Users should close all FYI notifications and respond to those that require a response. Closing FYI notifications is Optional. 2. Review the Current and Future Commitments (Optional) Run the Purchase Order Commitment by Period Report: The Purchase Order Commitment by Period Report shows the monetary value of purchased commitments for a specified period, and the next five periods. You can use the report sorted by buyer to monitor buyer performance. You can also use the report when negotiating with a supplier by limiting the commitments to a specific supplier.
3. Review the Outstanding and Overdue Purchase Orders (Optional) Run the following reports: * Purchase Order Detail Report * Open Purchase Orders (by Buyer) Report * Open Purchase Orders (by Cost Center) Report These reports can be used to review all, specific standard, or planned purchase orders. The quantity ordered and quantity received is displayed so the status of the purchase orders can be monitored. 4. Follow Up Receipts - Check With Suppliers For purchase orders not received, the appropriate department can use the details obtained from the Purchase Order Detail Report, to follow up the status of the ordered items with the suppliers. If the goods have been received, but the receipt has not been entered into Oracle Purchasing, the receipt transaction needs to be entered by the appropriate personnel. Attention: Where you have selected to accrue receipts at period end, make sure that all receipts have been entered for a specific period, before creating receipt accruals for that period.

It is not necessary to enter all the receipts for a period prior to closing that period. Simply backdate the receipt date when entering receipts for a closed period.

Warning: Where you have Oracle Inventory installed, it is not possible to process a receipt to a closed Purchasing period. 5. Identify and Review Un-invoiced Receipts (Period-End Accruals) Run the Un-invoiced Receipts Report to review receipts for which the supplier invoice has not been entered in Payables. Receipt accruals can be reviewed by account and by item. This report indicates exactly what has to be accrued, for what amount, and helps in the preparation of accrual entries. 6. Follow Up on Outstanding Invoices For any items identified to have been received but not invoiced, the appropriate department can then follow up with the supplier, using the details from the Un-invoiced Receipts Report. Entering of invoices, matching of unmatched invoices, and resolution of any invoice holds, where possible, should be carried out at this point in the period-end process. 7. Complete the Oracle Payables Period-End Process Complete the steps to close the Oracle Payables period, which corresponds to the Oracle Purchasing period being closed, to enable the creation of receipts accrual entries. Performing the Oracle Payables Period-End process effectively prevents any further invoices or payments being entered into Oracle Payables for the closed period. 8. Run the Receipt Accruals - Period End Process Run the Receipt Accruals - Period-End Report to create period-end accruals for un-invoiced receipts, for Expense distributions for a specific purchasing period. Each time the process is run, Oracle Purchasing creates an un-posted journal entry batch in the General Ledger for the receipt accruals. Journal entries are created for the amount of the receipt liabilities, debiting the charge account and crediting the Expense AP Accrual Account. If encumbrance or budgetary control is being used, another journal entries batch is created, corresponding to the encumbrance reversal entries for the un-invoiced receipts that were accrued. Reversal of accrual entries for the next period will happen automatically if: * The Profile option GL: Launch Auto Reverse after Open Period' is set to 'Y' * And the reverse option is selected for the accrual journal category. If the profile option is set to N, then the accrual entries need to be reversed manually. Oracle Purchasing creates accrual entries only up to the quantity the supplier did not invoice for the partially invoiced receipts. Attention: This step is only required if the Accrue Expense Items flag is set to Period End, on the Accrual tabbed region of the Purchasing Options window for the current Organization. When the Accrue Expense Items flag is set to At Receipt, a reversal is not required. If encumbrance or budgetary control is being used, Oracle Purchasing reverses the encumbrance entry when creating the corresponding accrual entry. Identify the purchasing period for the receipt accrual entries: Oracle Purchasing creates receipt accruals for all receipts entered up to the end of the nominated period. This process can be run as many times as needed.

Attention: The Receipt Accruals Period End Program creates accounting in the receiving sub ledger only. The Create Accounting Program has to be run to create SLA journals, which in turn will trigger the journal import.

9. Reconcile Accrual Accounts - Perpetual Accruals Identify the period-end balances of the following accounts in the General Ledger: * Purchase Price Variance * Invoice Price Variance Account * AP Accrual Account * Inventory Account - (Refer to Chapter 8 Period-End Procedures for Oracle Inventory) Reconcile the balance of the Purchase Price Variance account using the Purchase Price Variance Report. Manually remove the Invoice Price Variance amount from the AP Accrual Account using your General Ledger. Identify the Invoice Price Variances amount and Accrued Receipts amount in the AP Accrual Account. Run the Invoice Price Variance Report for the current period. Identify the invoice price variance for all purchase orders charged to the Inventory AP Accrual Account and compare it with the balance of the Invoice Price Variance account in the General Ledger. At any given time, the following transactions can account for the balance in the AP accrual account: * Uninvoiced Receipts * Over-invoiced Receipts * Errors (Invoices or inventory transactions charged to this Account by mistake) You need to analyze the balance of the AP accrual accounts, distinguish accrued receipts from invoice price variances, and identify errors. The Accrual Reconciliation Reports are used to analyze un-invoiced receipts, and to reconcile the balance of the AP accrual accounts. These reports enable you to identify the following issues in receiving, purchasing, inventory, work in process, or accounts payable transactions: * Quantity differences between receipts and invoices * Incorrect purchase order or invoice unit prices * Discrepancies in supplier billing * Invoice matched to the wrong purchase order distribution * Receipts against the wrong purchase order or order line * Miscellaneous inventory or work in process transactions that do not belong to the accrual accounts * Payables entries for tax and freight that do not belong to the accrual accounts The Accrual Reconciliation Report Group consists of one program and three reports as discussed below: a) Accrual Reconciliation LR Program load run This program is used in the accrual reconciliation process to populate the accrual reconciliation table with all the necessary transaction data to perform the reconciliation process. All the affected PO distributions (in the case of AP/PO transactions and individual transactions in the case of miscellaneous transactions) will be deleted first and the transaction information for these distributions will be fetched and loaded into the accrual reconciliation tables. b) AP and PO Accrual Reconciliation Report The AP and PO Accrual Reconciliation Report provides a transactional breakdown of each accrual account with a net balance not equal to zero. c) Miscellaneous Accrual Reconciliation Report The Miscellaneous Accrual Reconciliation Report shows all inventory and AP (not matched to PO) transactions that have hit the accrual account. d) Summary Accrual Reconciliation Report

The Summary Accrual Reconciliation Report can be used to analyze the balance of the AP accrual accounts. You can accrue both expense and inventory purchases as you receive them. When this happens, you temporarily record an accounts payable liability to your expense or inventory AP accrual accounts. When Oracle Payables creates the accounting for the matched and approved invoice, Oracle Payables clears the AP accrual accounts, records the liability from the supplier site and helps you monitor potential problems with purchasing and receiving activities that can affect the accuracy of your AP Accrual Accounts. After researching the reported accrual balances, the Accrual Write-Offs window can be used to indicate which entries are to be removed and written off from this report. Accounting entries have to be created in SLA and GL for these write-off transactions by submitting the Create Accounting program; and hence manual adjustment of accrual entries is not required. The Reconciliation Reports can help in monitoring potential problems with purchasing and receiving activities that can affect the accuracy of the AP accrual accounts. The Reconciliation reports also provide information on the quantity differences (between the quantity received for a purchase order shipment and the quantity invoiced), and price differences. Ensure that prior to closing the period, these differences are resolved. Prerequisites: * Oracle Payables and Oracle Purchasing installed. * If expense purchases are accrued on receipt, this report enables reconciliation with the accounts payable accrual account. * If expense purchases are accrued at period end, and inventory receipts are not performed, no information will be available to report. * If you have installed Oracle Inventory or Work in Process, the Accrual Reconciliation Report also displays any inventory or work in process transactions for the accrual accounts. Attention: Most commercial installations accrue expense receipts at period end, as the information is not required as the receipt occurs. If expense purchases are accrued on receipt, more entries must be reconciled in the AP accrual accounts. If you also receive inventory, the Receiving Value Report by Destination Account must be run to break out the receiving/inspection value by asset and expense. Attention: For Oracle Purchasing, all transactions are created in Purchasing and need the GL Transfer Program to be run to transfer to the General Ledger. For Oracle Inventory, and Oracle Work In Progress, a GL transfer or period close must first be performed for the transactions to appear on these reports. For Oracle Payables, journal entries must be created for the invoices. The Accrual Reconciliation Reports requires the transactions to be transferred to the General Ledger interface to ensure that the report balances to the General Ledger.

11. Close the Current Oracle Purchasing Period Close the current Purchasing Period in the Control Purchasing Periods window. Oracle Purchasing automatically un-marks all the receipts previously accrued to ensure that these receipts can be accrued again if they are still not invoiced in the next accounting period (where you have selected to accrue receipts at period end). 12. Open the Next Oracle Purchasing Period Open the next purchasing period in the Control Purchasing Periods window. 13. Run Standard Period End Reports (Optional) * Suppliers Quality and Performance Analysis Reports a) Suppliers Report Use the Suppliers Report to review detailed information entered for a supplier in the Suppliers and Supplier Sites windows. This report also shows if a supplier is on PO Hold. You have the option to include supplier site address and contact information. Payables lists your suppliers in alphabetical order and you can additionally order the report by supplier number. b) Suppliers Audit Report Use the Supplier Audit Report to help identify potential duplicate suppliers. This report lists active suppliers whose names are the same, up to a specified number of characters. The report ignores case, spaces, special characters, etc. The report lists all site names and addresses of each potential duplicate supplier. The report inserts a blank line between groups of possible duplicate suppliers. After duplicate suppliers have been identified, they can be combined using Supplier Merge. If purchase order information is merged, then any references to the supplier in blanket purchase orders, quotations, and auto source rules are updated to the new supplier. c) Supplier Quality Performance Analysis Report The Supplier Quality Performance Analysis Report can be used to review suppliers' quality performance, for percents accepted, rejected, and returned. This report is useful for identifying suppliers with quality performance issues. d) Supplier Service Performance Analysis Report The Supplier Service Performance Analysis Report lists late shipments, early shipments, rejected shipments, and shipments to wrong locations. This report can be used to derive a supplier service penalty by multiplying the days variance quantity by a percentage of the price. The % Open Current is the percentage of the ordered quantity not yet received, but within the receipt tolerance days or not past due. The % Open Past Due is the percentage of the ordered quantity not received by the promise date and beyond the receipt tolerance days. The % Received On Time is the percentage of the ordered quantity received on the promise date or within the receipt tolerance days. The % Received Late is the percentage of the ordered quantity received after the promise date and outside the receipt tolerance days. The % Received Early is the percentage of the ordered quantity received before the promise date and outside the receipt tolerance days. The Days Variance is calculated as the summation of the date differential (transaction date subtracted from promise date) multiplied by the corrected received quantity (the received quantity plus or minus corrections) for each shipment, all divided by the total corrected received quantity. The result is the quantity per day the supplier is in variance. e) Supplier Volume Analysis Report The Supplier Volume Analysis Report shows the dollar value of items purchased from a supplier. The report prints the items that are assigned sourcing rules. Use the report to compare actual purchase percentages with sourcing percentage. The Expenditure is the sum of the item line amounts for standard purchase orders for the supplier.

The Actual Percentage is the items expenditure as a percentage of the total expenditure for the date range of the report. The Intended Commitment is the total expenditure multiplied by the split percentage entered in the sourcing rules. * Analyze Requisitions Requisition Activity Register The Requisition Activity Register shows requisition activity and monetary values. Purchasing prints the requisitions in order of creation date and prepared name. * Review Quotation, RFQ and Purchase Order Statuses Purchase Order Statuses may optionally be reviewed early in the period close processing for Oracle Purchasing. Blanket and Planned PO Status Report The Blanket and Planned PO Status Report can be used to review purchase order transactions for items you buy, using blanket purchase agreements and planned purchase orders. For each blanket purchase agreement and planned purchase order created, Purchasing provides the detail of the releases created against these orders. Purchasing prints the blanket agreement or planned purchase order header information, if no release exists. * Savings Analysis Reports a) Savings Analysis Report (by Category) The Savings Analysis Report (By Category) shows buyer performance by category. Use the report to compare the market, quote, or list price to the actual price. The Negotiated Amount is the product of the price on the quotation and the quantity ordered. If a quote is not defined, Purchasing prints the product of the market price of the item ordered and the quantity ordered. If the market price is not defined, Purchasing uses the list price. The report includes a price type Legend at the bottom of each page for the price type. If the line price type is Q, the line price was from the Quote. If the line price type is M, the line price was from the Market Price, and if the line price type is L, the line price was from the List Price. The Actual Amount is the product of the actual price listed on the purchase order line and the quantity ordered. The Amount Saved is the negotiated amount less the actual amount, with negative figures in parentheses. b) Savings Analysis Report (by Buyer) The Savings Analysis Report (By Buyer) shows buyer performance by purchase order. The Negotiated Amount is the product of the price on the quotation and the quantity ordered. If a quote is not defined, Purchasing prints the product of the market price of the item ordered and the quantity ordered. If the market price is not defined, Purchasing uses the list price. The report includes a price type Legend at the bottom of each page for the price type. If the line price type is Q, the line price was from the Quote. If the line price type is M, the line price was from the Market Price, and if the line price type is L, the line price was from the List Price. The Actual Amount is the product of the actual price listed on the purchase order line and the quantity ordered. The Amount Saved is the negotiated amount less the actual amount, with negative figures in parentheses. Cancellation Reports Use these reports to review all cancelled purchase orders and requisitions, particularly where you have defined multiple Mass Cancel batches: A. Cancelled Purchase Orders Report B. Cancelled Requisitions Report