Customer Submitted Case Studies

Case Study on General Ledger Entry Reconciliation in R12

Author: Jaya Kiran Pidatala Chartered Accountant (Equivalent to CPA of USA)
Contributors: Sierra Atlantic Softare Services !td
S"ill !evel #atin$ for this Case Study: %nter&ediate

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Case Study Abstract
he case study briefly discusses about how $ configured &eneral 'edger Entry
reconciliation feature for &' (ournal lines. he document discusses about basic setups
performed and transactions done to reflect the functionality available in !)* 'edgers.
&eneral 'edger Entry reconciliation is a feature available in &eneral 'edgers wherein we
can reconcile balances of all accounts which ideally should net to +ero at &' level. ,or
example, contra accounts, clearing accounts etc-
Case !istory
$n !elease )*, Oracle has given us functionality in &eneral 'edger Entry !econciliation
of &' #ournal lines. he feature can be used to reconcile all account balances which
should actually net to +ero at closing. o achieve this, there are few setup steps needed
$n this case study, $ have discussed in detail the basic setups needed to setup #ournal line
reconciliation. . sample transaction with screenshots is shown to demonstrate the
functionality.
he setups demonstrated in this document totally reflect my understanding of Oracle
setups.
"re#Analysis $or%
$ had taken up the below assumed re/uirements to demonstrate the &eneral 'edger Entry
!econciliation.
Re&uirement' here are few clearing accounts, the balances of which at &' level should
net to +ero. he system should facilitate automatic reconciliation of such clearing
accounts. 0anual reconciliation should also be available for the same.
Analysis
Summary
$ have used the standard functionality of &eneral 'edger Entry !econciliation introduced
in !elease )* &eneral 'edger to meet the re/uirement.
$ have discussed in detail the setup steps needed to enable &eneral 'edger Entry
!econciliation for the clearing accounts. %riefly, the steps re/uired to make it work are
$dentify all clearing accounts which need to be reconciled
.ssign the necessary segment /ualifiers
&ive the (ournal !eferences while passing the #ournal entry in lines
(etailed Analysis
)ote' $ have done the demonstration on 1ision $nstance and have also copied the
screenshots wherever relevant.
2sed the standard seeded ledger 1isions Services 32S.4 and standard seeded
responsibility &eneral 'edger, 1ision Services 32S.4
Pa$e '
Setup Steps'
Step 1' *dentification of Clearing Accounts
.s a first step, $ identified all clearing accounts that are supposed to have a +ero net
balance and which would have to be reconciled hence.
,or the purpose of this document, $ have taken one clearing account for which setup shall
be done.
5atural .ccount" .ccrual Clearing .ccount" *6*6
Step 2' Assignment of Segment +ualifiers
he next step would be to assign the necessary segment /ualifier to the natural account
*6*6. he /ualifier 7!econcile8 should be set to 79ES8
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$ had /ueried the natural account in the ,inancials:,lexfields:;ey:1alues window and
assigned the necessary segment /ualifiers as shown in the screenshot
(emonstration'
Step 1' Create a ,ournal
$ have created a manual #ournal and saved it to demonstrate the (ournal 'ine
!econciliation feature. $ have copied the screenshots below.
he natural account with the code combination <):<<<:*6*6:<<<<:<<< with a credit of
2S= *<>< is credited in this example.
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Step 2' Gi-e ,ournal References in ,ournals
?hile passing the #ournal, the reference column needs to be uni/uely given for the
account. $t means, for the account *6*6 a uni/ue reference need to be given every time a
#ournal is passed using the natural account. hough the system does not insist on the
value being uni/ue, $ felt that it would be more useful and advantageous to follow this as
a process
,or this example, $ gave a reference 7.CC!2.'8 for this account.
he reconciliation reference can be given
$ndividually for each #ournal line manually
he reconciliation reference can be given individually for each of the #ournal lines
separately. @uery an unposted #ournal, and we can give the reference in the column in
!econciliation !eference for each of the lines as shown in the screenshot below.
Pa$e *
.t (ournal Aeader 'evel B Other $nformation ab
.lternatively, the reference can be given at the header level of the #ournal. $t can be given
in the !econciliation !eference field which can be found in the tab 7Other $nformation8.
his will ensure that the same value flows down to all new prospective lines of this
#ournal whichever carry a natural account for which the segment /ualifier !econcile is set
to 9es.
$t has to be noted that this information at header level need to be given even before
creation of any #ournal lines if it is desired that the value should flow automatically to all
eligible lines. Suppose, if we create * lines and then give the information in Other
$nformation ab, those * lines shall not derive the reference automatically. %ut if we
create a new C
rd
line in the same #ournal, it shall automatically derive the reference from
Other $nformation ab.
Pa$e +
he (ournal line references can be given in (ournal lines or derived from Sub ledger
.ccounting. his document does not discuss about importing of references from Sub
ledger .ccounting.
Step .' Create a Re-ersal ,ournal
,or the purpose of this demonstration, $ created a reversal #ournal for the original and
hence the natural account *6*6 with the code combination <):<<<:*6*6:<<<<:<<< is
again debited with 2S= *<><. $ posted the same.
Pa$e ,
Step /' "ost the ,ournals
Once the references are given, the #ournals need to be posted so that the balances can be
updated.
Step 0' Automatic Reconciliation
System gives us the option of reconciling the accounts either manually or automatically.
,or automatic reconciliation, $ ran the program 7!econciliation B .utomatic
!econciliation8 with the given set of parameters as shown below.
.s it can been seen in the above screenshot, we need to select a reconciliation rule for the
report. %ased on the rule given, the program picks up all eligible records for
reconciliation. he available options are
%y .ccount and !eference B .ll records for which the code combination and
reference fields match will be picked. Dlease note that the natural account
segment /ualifier need to be set to 9es
%y %alancing Segment and !eference B .ll records for which the balancing
segment value and reference fields match will be picked
%y %alancing Segment, 5atural .ccount and %lank !eference B .ll records for
which balancing segment value, natural account match and which do not have
reference field
Pa$e -
%y %alancing Segment, 5atural .ccount and !eference : .ll records for which
balancing segment value, natural account and reference fields match will be
picked.
,or the purpose of this example, $ selected %y .ccount and !eference as the rule.
?e can also observe that there is a parameter 7Derform !econciliation8. %y selecting this
parameter as 5o, the program gives a preliminary report output of selected transactions
for reconciliation. ?e can verify the same and if the output is as desired, we can re:run
the program with the parameter set to 9es.
%elow is the screenshot of the report. ?e can observe that both the lines from the #ournals
created bearing the natural account *6*6 got selected and are available for reconciliation.
On re:run of the program with the Derform !econciliation parameter set to 9es, the lines
will be marked as !econciled. Oracle gives a uni/ue reconciliation $= for each of the
reconciliations performed.
Step 1' 2anual Reconciliation
Oracle also gives us the option of picking the records for reconciliation and manually
reconcile. ?e can reconcile manually if we need to reconcile records with different
balancing segments, natural accounts or reconciliation references. ?e need to use the
reconciliation lines window to reconcile the transactions.
Pa$e .
$ have found that the system gives few options as selection criteria for selection of
records for reconciliation. he below screenshot shows us the options available for
selecting the records.
?e can select the lines by giving ranges for period, dates, (ournal category, reference,
se/uence name, se/uence number and code combinations.
$n the above example, $ have given the period and the natural account as *6*6. $t selected
* lines the screenshot of the same is attached below.
Pa$e /0
5ow, we can click on the check box, 7!econcile8 available on the left most corner of
each line and click on reconcile to reconcile the transactions. Oracle shall reconcile if the
net of debit and credit of all selected lines is e/ual to +ero.
Results3 Conclusion and Learnings
his way, $ had demonstrated the re/uirements using !)*Es functionality of &eneral
'edger Entry !econciliation. $t is a very useful feature especially when you have large
number of clearing accounts which need to be reconciled at the end of a period, the entire
process can be automated then.
References
Oracle General Ledger 4ser Guide
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