R12 Upgrade Accrual

Reconciliation
Challenges
Veeresha Javli (VJ)
www.bworld360.com vjavli@bworld360.com
Former Applications Architect, Oracle Cost Management, Globalization and
Localization EBS Products
Co-founder of Landed Cost Management (LCM)
Consulting Manager, Oracle Consulting Services (CPG, Retail, Manufacturing)

www.linkedin.com/in/vjavli

11i10 Challenges
Functional Challenges
Accrual Reconciliation across business functions were quite complex
Hard to find the specific PO distributions that caused accrual discrepancies
Accrual accounts were used in other accounts (vice versa) due to user errors
resulted in wrong accrual balances and reconciliation issues that carried over
to the future periods.
Both Recoverable and Non-Recoverable Taxes included in Accruals
Manual process for Accrual-Write Offs

Technical Challenges
Serious Performance issue resulted in delayed financial period close process.

11i VS R12 Accrual Reconciliation Approach

11i Accrual Reconciliation Approach

R12 Accrual Reconciliation Approach

Reconciliation rebuild retrieved data by

transaction date and accrual account ID

Reconciliation rebuild by lowest common

denominator PO Distribution ID with net
accrual discrepancies

All PO transactions (fully invoiced, partially

invoiced, un invoiced POs, written-off txns in
the transaction date range retrieved
Reconciliation Report by PO lines, reported
many seemingly self-balanced lines making
the report difficult to analyze
Focus was on reconciling the aggregate Net
balance to GL

Incremental build with to-date (cut-off date)

PO distributions with net balance zero are
eliminated in the process, reducing the
volume and improving the performance
Automatic Accrual Write-Off submissions
One place Accrual Account definitions

Manual Journal entries for Accrual Write-offs

11i issues and R12 Enhancements

11i issues

R12 Enhancements

Poor Performance

Enhanced Performance

Full data load causing years of accrual

distributions being loaded and reloaded
again

Inflexibility and Ambiguity

Forms and Reports are data dumps. Difficult
to identify the PO Distributions to write off
Data can not be exported in excel format.

Possibility for Errors

Manual write-off to GL can lead to errors and
mistakes

No Summary Reporting

Incremental data load using from and to date

to load data with outstanding accrual balances
only
Support writing off balances

Increased Usability
Headers and lines separation
Summarization display
AP PO data only
Miscellaneous data only
Mass write-off
Automatic Accounting Creation
Write-off will post to SLA as any other
distributions

R12 Accrual Reconciliation Enhancements

Select Accrual Accounts in one single place
Accrual Reconciliation Load Run with incremental build
Net accrual balance with non-zero values only per PO Distribution Id
Generated accrual write-offs ready to post to GL
Improved performance enhancements
Accrual Reports

Summary Accrual Reconciliation Report

AP and PO Accrual Reconciliation Report
Miscellaneous Accrual Reconciliation Report
Accrual Write-Off Report
WIP Accrual Write-Off Report
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11i10 Accrual accounting Flow

PO

AP
GL INTERFACE

General Ledger
(GL)

INV

WIP
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R12 Accrual accounting Flow

PO

AP
Sub Ledger
Accounting (SLA)

GL INTERFACE

General Ledger
(GL)

INV

WIP
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Before R12 Upgrade Key Considerations

11i Accrual balance mismatch between product sub ledgers and
GL
Verify and compare the Accrual balances in PO, AP, INV, WIP product sub
ledgers by each accrual account to the accrual balance in GL
If the Accrual Balance in GL is not matching with that of product sub ledgers
(PO, AP, INV, WIP) with significant difference, it is of serious concern
Verify that accrual accounts used in multiple business functions and nonaccrual purpose (vice versa).
Quite likely that there may be a custom logic in PO, AP, INV, WIP process,
check for custom triggers that was placed on core Oracle EBS tables with a
possible serious violation of Oracle standards.
Custom programs accounted to accrual accounts with wrong process.

Duplicate Write-Off Txns in 11i PO_ACCRUAL_WRITE_OFFS_ALL

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Before R12 Upgrade Key considerations

Scenario at a Telecom client with serious accrual discrepancies
Insert database trigger in MTL_MATERIAL_TRANSACTIONS caused
multi-million dollar discrepancies between Inventory sub ledger and GL.
Oracle Projects customization accounted to wrong accrual accounts.
Every month, accrual load run from the very first historical period with
back dated transactions resulted in improper accruals.
11i10 Accrual Reconciliation with Oracle core code customized to
improve the performance for every month fresh rebuild from historical
high volume data, resulted in wrong accrual reconciliation logic carried
across periods.
High volume of accrual write-off transactions due to inefficient process.

Watch out for the back dated transactions

Directly inserted / updated to core Oracle tables, a serious violation of
oracle standards by several top tier consulting firms in the prior
implementations that caused R12 Upgrade challenges.
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R12 Upgrade Key considerations

Accrual Reconciliation in R12 only consider data from SLA posted to
GL.
Manual Journals and Adjustments made in GL are not considered.
Ending balance from Account Analysis Report used to reconcile the
Reconciliation Summary Report
Only valid sources from Account Analysis Report for Accrual
Reconciliation are:
Source

Category

Cost Management

Receiving

Cost Management

Inventory

Cost Management

WIP

Payables

Purchase Invoices
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R12 Upgrade Key considerations

Following sources in the Account Analysis Opening Balances should
be eliminated or removed:
Source

Category

Cost Management

Accrual

Purchasing
MANUAL/SPREADSHEET
ENTRIES/Write Offs

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R12 Upgrade Key considerations

R12 SLA Upgrade Patch of historical data and impact on Accrual Load
By default, only 6 months of accounting data are migrated to SLA. Only 6
months of R12 Accrual rebuild occurs.
A separate patch exists to bring accounting data for 3 years.
Care must be take if customer is using Oracle Projects (PA), since the SLA
Upgrade patch process is different.
If customer is loading more than 3 years of SLA accounting data, then check
for the genuine rationale because it is quite likely that customer had messed
up 11i10 Accruals and every time the Accrual Load run is being executed from
the very beginning of an historical period in order to reprocess all the back
dated transactions.
For more than 3 years, Upgrade patch has to applied repetitively with
observed performance issues.

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R12 Upgrade Key considerations

Incomplete R12 Upgrade and impact on Accrual Load
AP Invoice Distributions missing after R12 Upgrade patch
PO Receipt accounting distributions missing after R12 Upgrade patch

Use Document ID : 980112.1 to upgrade missing data after SLA Post

Upgrade
CST: Accrual Age In Days
Indicates whether to use the last receipt date or last activity date for age in
days calculation.
Last Activity Date: A PO distribution's age in days is determined by the last
invoice date
Last Receipt Date: A PO distribution's age in days is always determined by the
last receipt date.
Used in AP and PO Accrual Reconciliation Report

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R12 Accrual Accounts

Define all the accrual accounts without fail in the screen Select Accrual Accounts
Path: Purchasing > Accounting > Accrual Write offs
Customers often forget to enter some accrual accounts resulted in incomplete
Accrual Reconciliation since Accrual Load Run executes only on the defined
accrual accounts.

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R12 Accrual Reconciliation and Write-Off

Accrual Reconciliation Data

Incremental
Load

Created

CST_RECONCILIATION_SUMMARY
CST_AP_PO_RECONCILIATION
CST_MISC_RECONCILIATION

Removed

User Write Off the balance

Inserted

Load of Accrual Data

With outstanding
balance

CST_RECONCILIATION_BUILD

Deleted

Trigger the creation of the Write

Off transaction to represent the
amount being written off

CST_WRITE_OFFS
CST_WRITE_OFF_DETAILS

Written Off Transaction Data

Reversed
Created
Inserted

User Reverse the Write

Off transaction

Inserted the
opposite
Write Off

Recreate the Accrual Reconciliation data being

previously written off

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R12 Accrual Reconciliation and Write-Off

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R12 Accrual Reconciliation Load Run

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R12 Accrual Reconciliation Load Run

CSTACCLB.pls : Get latest version with all the performance fixes.
Ensure SLA Performance Patch applied, Generate Stats executed
First Time Build
Date From: Min Transaction Date from SLA is picked as the Start Date
SLA Upgrade How far one wants to go in historical data for Accrual
Load
Date To: User entered Date up to which Accrual Reconciliation is loaded
Two Step Process
a) 11i10 Accrual write-off migrated to R12 Accrual write off tables
b) 11i10 Accrual data migrated to R12 Accrual Reconciliation tables

Consecutive Run (Incremental Build)

Accrual Load Run executes Only for delta transactions from prior run
end date to the user entered date
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Accrual Write Off and Reconciliation Tables

11i Accrual Tables
PO_ACCRUAL_WRITE_OFFS_ALL

R12 Accrual Tables

CST_WRITE_OFFS
CST_WRITE_OFF_DETAILS

PO_ACCRUAL_RECONCILE_TEMP_
ALL

CST_RECONCILIATION_SUMMARY
CST_AP_PO_RECONCILIATION
CST_MISC_RECONCILIATION
CST_RECONCILIATION_BUILD
(control table)
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References and Metalink Docs

FAQ R12 Essentials Of Accrual Accounting (Doc ID 827125.1)
R12: Discrepancies with Accrual Reconciliation Report Troubleshooting (Doc ID 1117353.1)
Accrual Reconciliation Load Run Has Slow Performance (Doc ID
1490578.1)
Doc ID 1478292.1 -R12 Accrual Reconciliation Diagnostics And
Troubleshooting Guide
Doc ID 1107953.1 -R12 Accrual Balance Mismatch Between Accrual
Reconciliation Report
Doc ID 866733.1 -How To Diagnose Inventory Accruals And Accrual
Write Off Issues
Impact of R12 Design in Procure To Pay Accounting Flow (Doc ID
429105.1)

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References and Metalink Docs

Doc ID 1126025.1 - R12: Discrepancies With Accrual Reconciliation
Report For Consigned
Doc ID 883557.1 - R12: How To Avoid and Fix Corruption in Data
Transfer from SLA
Doc ID 604893.1 - R12.0 and R12.1: FAQ for the SLA Upgrade: SLA
Pre-Upgrade, Post-Upgrade, and Hot Patch
Doc ID 1472099.1 - Missing Accounting Entries In SLA For Transactions
In Upgraded Periods
Doc ID 1478292.1 R12 Accrual Reconciliation Diagnostics And
Troubleshooting Guide
R12 Account Requirements For Inventory Accrual Reconciliation (Doc
ID 824388.1)
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Q&A
Thank You!

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