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AP Period Closing issue....

Discussion in 'Oracle Financials' started by Muneendrareddy, Dec 5, 2011.

  1. Muneendrareddy

    Muneendrareddy Active Member

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    Hello Friends...

    I have an bellow period closing issue...Can anyone suggestions or guidelines on this, that would be great help to me.........................................:)

    The issue we are having is that due to AP updating overnight we need
    to wait until the day after the last payment clears the bank account
    in the month to ensure everything is reconciled and balances. If AP
    need to make a payment on the last working day of the month we will
    need AP to remain open until WD2 to allow us to complete our
    reconciliation and checks. This has a knock on effect for fixed assets
    which can’t close until AP. Not closing FA until WD2 then delays when
    the capex report can go out to Finance causing issues with meeting
    reporting deadlines.If AP update cah like AR is then we could be
    reconciled and allow AP to close WD1 without restricting the days AP
    can make payments. This would remove pressure from AP, Treasury and
    Foxed assets .

    Awaiting for your quick responce..

  2. Ramji

    Ramji Forum Guru

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    I just happened to come across this post. It is very simple. You cannot expect a software solution to all your problems, especially with so many dependancies. You need to have Business processes in sync with your requirements to ensure that your month close is not affected.

    Now the transaction you are talking about is Payment Clearing. Oracle is a FASB Compliant ERP Solution. From a financial Reporting standpoint, there is literally no impact.

    When you have Payment accounting when a Payment is Issued Checked and When you have Payment accounting when Payment clears checked,
    all that happens is Cash Clearing Gets Debited and Cash a/c gets Credited after the bank statement is reconciled.

    You can recommend the client to have a business Policy in Place ie a cut off date for the last payment run before month close. Even otherwise it is a usual practise to have a value date of T+1 for EFT's for Bank of America and many other leading banks.

    Then on the last day of the working month you can have the scheduled programs run on demand before the close of Business hours to complete the accounting cycle.

    It is customary for Finance folks to have a buffer period to close the previous month as inevitably adjustment entries to the general ledger will crop up. Many clients I have worked with close Jan by 10 Feb and so on. This is the standard cutoff in many I have seen.

    Discuss various scenarios. Keep in mind your transactions should reflect actual events. Hence dont even think of manually entering a bank statement before date you actually receive from the bank.That would result in audit qualifications.

    Hope this helps.
    Muneendrareddy likes this.
  3. Muneendrareddy

    Muneendrareddy Active Member

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    Thanks Ramji..