Period End Processing in Oracle Purchasing 11i

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I have come across a documet which helped me lot in Purchasing Period End Processing, Hence I am posting with my editing to give the precise content...

Complete All Transactions for the Period Being Closed
Ensure that all transactions have been entered for the period being closed.
Completing all transactions for Oracle Purchasing:
1. Complete Requisitions
2. Complete Purchase Orders and Releases
3. Complete Receipts and Returns
Submit the Confirm Receipts Workflow Select Orders process in Purchasing to send notifications through the Web, e–mail, or Notification Details Web page (accessible through the Notifications Summary menu in Purchasing) to requestors or buyers who create requisitions in Purchasing or Oracle Self–Service Purchasing. It lets people know they should have received an item.
The Confirm Receipts workflow sends notifications for items with a Destination or Deliver–To Type of Expense, a Routing of Direct Delivery, and a Need–By date that is equal to or later than today’s date.
Requestors can create receipt transactions by responding to the notification.
1. Print all new Purchase Orders
2. 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.

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.

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.

Follow Up Receipts - Check With Suppliers

From the details obtained from the Purchase Order Detail Report regarding un-receipted purchase orders, the appropriate department can then follow up with the suppliers as to the status of the ordered items.
If the goods have been received, but the receipt has not entered into Oracle Purchasing, then the receipt transaction needs to be actioned 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.


Identify and Review Un-invoiced Receipts (Period-End Accruals)

By running the Un-invoiced Receipts Report, all or specific un-invoiced receipts that can be accrued, can be reviewed. These are items that have been received that the supplier has not invoiced you for yet. Receipt accruals can be reviewed by account and by item. This report indicates exactly what has to be accrued, and for what amount, and helps in the preparation of accrual entries.


Follow Up Outstanding Invoices

For any items identified to have been received but not invoiced, the appropriate department can then follow up the details from the Un-invoiced Receipts Report with the supplier. 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.


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 enablecreation 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.


Run the Receipt Accruals - Period End Process
Run the Receipt Accruals - Period-End process to accrue receipts, as no journal entries are created when receipt transactions are entered. This process is used 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 Receipt Accrual Liability Account.
If encumbrance or budgetary control are being used, another journal entries batch is created, corresponding to the encumbrance reversal entries for the un-invoiced receipts that were accrued. The accrual journal entries are then reversed out at the start of the new accounting period when you open the next Purchasing period. Oracle Purchasing creates accrual entries only up to the quantity the supplier did not invoice for 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 Organisation.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.


Reconcile Accrual Accounts - Perpetual Accruals

Identify the period-end balances of the following accounts in the General Ledger:
Purchase Price Variance
A/P Accrual Account
Inventory Account - (Refer to Chapter 3 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 A/P Accrual Account using your General Ledger.
Identify the Invoice Price Variances amount and Accrued Receipts amount in the A/P 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 A/P Accrual Account and compare it with the balance of the Invoice Price Variance account in the General Ledger.
At any given time, the balance of the A/P accrual accounts can account for the following transactions:
Uninvoiced Receipts
Over-invoiced Receipts
Errors(Invoices or inventory transactions charged to this Account by mistake)
You need to analyze the balance of the A/P accrual accounts, distinguish accrued receipts from invoice price variances, and identify errors.
The Accrual Reconciliation Report is used to analyse un-invoiced receipts and to reconcile the balance of the Accounts Payable accrual accounts.
This report enables you to identify the following problems in receiving, purchasing, inventory, work in process, or accounts payable transactions:
Quantities differ between receipts and invoices
Incorrect purchase order or invoice unit prices
Discrepancies in supplier billing
Invoice matched to the wrong purchase order distribution
Received 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 Purchasing Options can be set to accrue both Expense and Inventory purchases as they are received. When this happens, an Accounts Payable liability is temporarily recorded to the Expense or Inventory Accounts Payable accrual accounts. When the invoice is matched and approved by Oracle Payables, the Accounts Payable accrual accounts are cleared, and the liability is recorded from the supplier site.
There are two versions of this report, detailed as follows:
The Accrual Reconciliation Rebuild Report
This version of the report selects the accounting entries from the appropriate source (sub-ledgers). This accounting information resides in a temporary table, and remains until this information is rebuilt again. Typically, this report is run at period end.
The Accrual Reconciliation Report
This version of the report uses the accrual information residing in the temporary tables that was selected the most recent time the Accrual Reconciliation Rebuild Report was run. This report is typically run throughout the accounting period, providing interim reports, whereas the rebuild report is used to select and report on current accrual information at period end.
These reports can be used to identify any discrepancies between PO receipts and AP invoices. The report will also detail any miscellaneous transactions erroneously posted to the 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. After writing off these entries, the Accrual Write-Off Report can be used as supporting detail for the manual journal entry in General Ledger.
The Accrual Reconciliation Report can help in monitoring potential problems with purchasing and receiving activities that can affect the accuracy of the AP accrual accounts.
Ensure that prior to closing the period, quantity differences (i.e., when the quantity received for a purchase order shipment is smaller than the quantity invoiced) and price 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.
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 Accounts Payable 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: The Accrual Reconciliation Report requires transactions to appear on the report prior to creating records into the Oracle General Ledger interface tables.
Attention: For Oracle Purchasing, all transactions are automatically transferred to the General Ledger interface. For Oracle Inventory, and Oracle Work In Progress, a GL transfer or period close must first be performed for the transactions to appear on this report. For Oracle Payables, journal entries must be created for the invoices.
The Accrual Reconciliation Report requires the transactions to be transferred to the General Ledger interface to ensure the report balances to the General Ledger.

Perform Year End Encumbrance Processing (Optional)
Oracle Financials provides a number of facilities for the processing of outstanding encumbrances as part of year end processing.
The default processing for Oracle Financials at year end is to extinguish any outstanding encumbrances/ unused funds when you close the last period of the Financial Year within Oracle General Ledger.
The carry forward process enables managers to perform any of the following:
Carry forward encumbrances for existing transactions (purchases/requisitions).
Carry forward encumbrances, and the encumbered budget.
Carry forward the funds available as at the end of the year.
Other facilities available:
Use mass allocations to bring forward part of the funds available.
Carry forward budgets into the current appropriation budget, or to a separate budget to identify between current year and carry forward amounts if required. Mass budget processing also allows you to combine these budgets.
Attention: You must complete the Year End Encumbrance processing in Oracle Purchasing before commencing the year end Encumbrance processing in Oracle General Ledger.
(Refer to Period-End Procedures for Oracle General Ledger)

The steps required to complete Year end Encumbrance processing in Oracle Purchasing are:

Identify Outstanding Encumbrances

Print the Encumbrance Detail Report to review the requisition and purchase order encumbrances, if the encumbrance option for requisitions or purchase orders has been enabled, and requisitions and purchases have entered and approved. Use this report to review the accounts encumbered.
The Encumbrance Detail Report reflects activity from General Ledger, not Purchasing or Oracle Payables. Therefore, use the Encumbrance Detail Report in a way that matches the accounting method:
Receipt accrual: Generate the Encumbrance Detail Report as needed when the Accrue at Receipt option is used. Upon entering receipt information, an automated process transfers the receipt information to General Ledger using the Journal Import Process.
Period-end accrual: Generate the Encumbrance Detail Report at period-end. During the period, the encumbrance detail on the report is based on invoice matching information from
Payables, not on receiving information. After the Receipt Accruals - Period-End process is run, the Encumbrance Detail Report reflects the true period-end receipt information.
Cash basis: If cash-basis accounting is used, the encumbrances on the Encumbrance Detail Report remain until payment information from Payables is transferred to General Ledger. When cash-basis accounting is used and the Payables Transfer to General Ledger process is submitted, Payables transfers only accounting information for paid invoices to the General Ledger.
Based on this report you can identify those transactions that you wish to carry forward into the new financial year.
Refer below for the steps required to cancel transactions that are not to be to carried forward.

Perform MassCancel in Oracle Purchasing (Optional)

MassCancel enable the cancellation of requisitions and purchase orders on the basis of user selected criteria.
Define MassCancel
The Define MassCancel window is used to nominate a date range for transactions, as well as any of the following:
Document Type
Supplier Name
Accounting Flexfield Range
This process will automatically generate a MassCancel listing report identifying the following:
Unable to Cancel Requisitions (reasons provided)
Unable to Cancel Purchase Orders (reasons provided)
Partially in range Documents
Fully in Range Documents
Run MassCancel
When this process is run, Oracle Purchasing creates journal entries to zero out the encumbrances associated with the canceled requisitions and purchase orders.
Attention: If you wish to cancel both purchase orders and requisitions, you must initiate MassCancel twice. Note that when canceling a purchase order, you have the option of canceling the original requisition at the same time.


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).

Open the Next Oracle Purchasing Period

Open the next purchasing period in the Control Purchasing Periods window.


Run Standard Period End Reports (Optional)


Suppliers Quality and Performance Analysis Reports

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.
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. Payables 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 autosource rules are updated to the new supplier.
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 to identify suppliers with quality performance issues.
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.
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.

Analyse 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

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 Market Price, and if the line price type is L, the line price was from 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.
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 Market Price, and if the line price type is L, the line price was from 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.


Encumbrance Accounting Reports

Encumbrance Detail Report
The Encumbrance Detail Report can be used to review requisition and purchase order encumbrances for a range of accounts if the encumbrance option for requisitions or purchase orders has been enabled, and there are entered and approved requisitions and purchases. Use this report to review the accounts encumbered.
Cancelled Purchase Orders Report
Cancelled Requisition Report
Use these reports to review all purchase orders and requisitions cancelled, particularly where you have defined multiple Mass Cancel batches.


You can use this as a golden refrence document at the time of Preiod End Processing of Oracle Purchasing

Feel free to come up with your comments over this document.

Thanks & Regards,
S.Grace Paul Regan