In this Document

Applies to:

Purpose

Accrual Write Off process identifies and writes off items that misstates the accrual balance on the Accrual Reconciliation Reports. Such transactions will also include non accrual transactions wrongly debited or credited to the Inventory AP  Accrual Account. The following are potential transaction candidates to be written off : Differences between receipts and invoices with no intention of future invoicing, Discrepancies in supplier billing, A/P No PO Transactions - Invoices not matched to PO or incorrect data conversion invoices, A/P No Match-Valid Invoice with no corresponding receipt, Invoices Matched to Wrong PO or Receipt, Miscellaneous inventory or work in process transactions that do not belong to Accrual Accounts, Payable Entries for Sales Tax and freight that do not belong to Accrual Accounts.

The Write Off process is different from R12 and R11i. We will cover both and highlight the differences. In R12 Accrual Write Off excludes the write off transaction from the AP and PO Report and dynamically post to GL and excluded from the Net Accrual balance. Therefore the risks and problems associated with Manual Journals are avoided

For relevant Notes relating to Inventory Accrual Reconciliation process please refer to
the following Notes:

Note.1107953.1 - R12 Accrual Balance Mismatch Between Accrual Reconciliation Report -         Troubleshooting
Note.1113712.1 - R12 FAQ Accrual Accounting - On Line and Period End Accruals
Note 728871.1 - R12 How To Diagnose And Reconcile Inventory AP Accrual Transactions Using Reconciliation Reports
Note 824388.1 - R12 Account Requirements For Inventory Accrual Reconciliation

Troubleshooting Steps

Release 11i Write Off Process

1) Run the Accrual Rebuild Reconciliation Report Or the Rebuild Manager if Available and make sure the Date range includes the transactions to be written off

2) Run the Accrual Reconciliation Report
Make sure the transactions you intend to write off appear in the Report

3) Go to Accrual Write Off Form
Nav: Purchasing responsibility/Accounting/Accrual Write Off

4) Select the source as PO or A/P OR AP and PO if both should be written off or any other source you intend to write Off

5) Put in the date range

6) Query the Transactions

7) Check and save the transactions to write off

Please take Note of the Following:
a) 'Matched to Purchase Order' should be selected to see matched Transactions

b) Invoices appearing on the Accrual Reconciliation Report with an Accrual
Transaction of 'A/P No PO' have not been matched to a PO. Therefore, to find
these transactions in the Accrual Write Offs form, the 'Matched to Purchase Order' should be unchecked

Release 12 Write Off Process

Please refer to Note:728871.1 under 'New Art' for detailed, dynamic and automated examples of R12 Write Offs.

In R12 Accrual Write Off not only excludes the write off transaction from the AP and PO Report but also dynamically post to GL and excluded from the Net Accrual balance. Therefore the risks and problems associated with Manual Journals are avoided

Before write off can be done in R12 data must first exist in CST_AP_PO_RECONCILIATION table.
Both the AP and PO Accrual Reconciliation Report and Accrual Write Off Form query their transactions from this Table.

The following steps should be followed before querying transactions from the Write Off Form:

1) Complete Receipt Transactions and Invoice matching.

2) Run the Create Accounting Program in Final Mode with subsequent Transfer of Entries to GL

3) Run the Accrual Reconciliation Load Program which will populate two Tables:
CST_RECONCILIATION_SUMMARY and
CST_AP_PO_RECONCILIATION

4) Run the AP and PO Accrual Reconciliation Report
The Detail Version of the Report will show accrual account for each PO distribution with the Receiving transaction amount and invoice transaction amount with a net balance greater than zero.

5) Perform Accrual Write-off
Once the accrual entries for the PO or invoice are shown in AP and POl Reconciliation Report,
Accrual Write-off can be done using Cost Management or Purchasing responsibility>Accounting>Accrual write offs>AP and PO.

This will delete the accrual entry from CST_AP_PO_RECONCILIATION table and populate the write off transaction in CST_WRITE_OFFS table. This write off transaction can also be viewed in the form View Write offs. In order to create accounting entries for the write offs in SLA and GL for submit the Create Accounting program after completing the write offs in the Accrual Write Off Form. The Write Off Transactions can be viewed in SLA menu by navigating to Tools > View Accounting in the View Write offs form.

R12 Process Flow By PO Example

Let us use PO #60116 to demonstrate the Write Off Process in R12 discussed above

• Create PO #60116 for 10 items @ 25 USD each
• 6 items are received in two different slots  (i.e. 2 different receipts)
• 5 items are billed by 1 invoice and match to the PO
• Posting of  all the transactions are done  (Receiving and AP Invoice matching) to GL via XLA
• User then decides to write-off  items received but not billed

Run Accrual Load

Check the data in CST_RECONCILIATION_SUMMARY

Check the data in CST_AP_PO_RECONCILIATION

AP PO Accrual reconciliation report:
The AP PO Accrual reconciliation report is to support the outstanding accrual balance investigation – The same data is available in the AP PO Accrual transaction form

AP PO Accrual transaction form

AP PO Accrual transaction form – User can decide to write-off the accrual balance of that PO

Once submitted all data of that PO distribution ID will deleted from CST_AP_PO_RECONCILIATION and SUMMARY tables

Write off form – A write transaction will be generated in CST_WRITE_OFFS table associated with that Po_Distribution_ID

Check the data in CST_WRITE_OFFS

Check the data in CST_WRITE_OFF_DETAILS

In R12 write off transactions are posted from Costing to GL using XLA

After running Create Accounting – Cost Management

The accounting of the write-off got transferred to XLA and GL

Table Level Contrast R11i And R12

Below we will contrast in more details the write offs in R11i and R12
Let us assume we have two PO's PO#1 and PO#2
Let us assume further that for every transaction we have 1 Line and I distribution.

Period #1 Jan 2009 (For easy analysis let us presume for each PO)
PO Price $10
Quantity Ordered 10 in 1/1/2009
Quantity Received 5 in 1/1/2009
Quantity Invoiced 5 for PO#1 on 1/31/2009
Quantity Invoiced 4 for PO#2 on 1/31/2009

Period #2 Feb 2005
Quantity Received 5 for PO#1 2/1/2009
Quantity Invoiced 4 for PO#1 2/28/2009
Quantity Received 5 for PO#2 2/1/2009
Quantity Invoiced 6 for PO#2 2/28/2009

R11i

When the Accrual Rebuild/or Rebuild Manager is run on 1/31/2009 after invoicing the following data will be retrieved to AP_ACCRUAL_RECONCILE_TEMPS_ALL

First period: Jan-2009

Note:
PO#1 is self balanced (i.e. fully invoiced) but still loaded to the PO_ACCRUAL_RECONCILE_TEMPS_ALL
PO#2 has a balance of 10.

Second period: Feb-2009

Customers can use the write_off checkbox to write off balance. They could also do mass write-off based on the tolerance. Assuming they choose to write off the balance for PO#2, the write-off will immediately make PO#2 balanced. PO#2 and its details will disappear from the reconciliation tables. Dynamic reconciliation. The write-off txn and its details will be generated. The automated accounting is done against the write-off txn. The data in write-off tables is persistent. There is a track record, audit-able.


Write-off summary

Write-off details

Suppose a mistake is made in the write-off, use the reverse checkbox to reverse it. The reversal txn will have its own accounting and transaction details. It also points to its original write-off txn. Auditable again.

Write-off summary

Write_off details

As soon as the reversal is done, the PO#2 becomes unbalanced again and it comes back to the reconciliation tables. Dynamic reconciliation again.
Both write-off and its reversal contribute to the total balance of a PO distribution.

Reconciliation summary

Reconciliation details

Second period: Feb-2009

When new txns for both PO#1 and PO#2 come in Feb, the new data actually makes PO#2 balanced, so it comes off the reconciliation tables. However, the new data for PO#1 makes it unbalanced for the first time, so we will load all its txns.

Reconciliation summary

Reconciliation details

The data in write-off tables remain. So at the end of second period, we have data in reconciliation tables for PO#1 that need to be taken care of. We also have data in write-off tables for PO#2 for legal and auditing purpose.

For normal business, over the time most POs should be self-balanced and write-off would be needed only for a small portion of problematic POs. Therefore, we will have lean reconciliation tables and manageable size of write-off tables.

Accounts Requirement For Write Off

The following Accounts set up is required for all Accrual Accounts to be used in the Reconciliation Reports and Write Off.

Navigate: Purchasing Responsibility: Accrual Write Offs/Select Accrual Accounts.

Setup: Declare the accrual accounts to be used in Load Program and accrual write off

Processing Overview

Transactional:
Accrual load  inserts accrual accounting journals in
CST_RECONCILIATION_BUILD: track of “Accrual Build”
CST_RECONCILIATION_SUMMARY: accrual data are summarized based on PO_DISTRIBUTION_ID only for AP PO reconciliation
CST_AP_PO_RECONCILIATION: AP and PO accrual journals
CST_MISC_RECONCILIATION: INV miscellaneous and AP miscellaneous date
CST_WRITE_OFFS and CST_WRITE_OFF_DETAILS: Store write-off transaction information

CST_RECONCILIATION_BUILD

CST_RECONCILIATION_BUILD will capture the different accrual load process running

The Columns
Operating_unit_id
From_date
To_date
Build_id

The first run of the accrual load program, will check the minimum XLA upgrade date and use that as the starting point no matter what start date user is entering 

CST_RECONCILIATION_SUMMARY

CST_RECONCILIATION_SUMMARY will capture the summary information for AP PO accrual journal entries.

The Columns
Po_Distribution_ID
Accrual_Account_ID
Po_Balance
Ap_Balance
Write_Off_Balance
Operating_Unit_ID

The table is the parent of the table CST_AP_PO_RECONCILIATION, it capture summarize balance information from different buckets
Those data can be rebuilt based on accrual date range 

CST_AP_PO_RECONCILIATION

CST_AP_PO_RECONCILIATION will capture the detail information for AP PO accrual journal entries.

The Columns
Po_Distribution_ID
Rcv_Transaction_ID
Inv_Distribution_ID
Write_Off_ID
Amount
Entered_Amount
Quantity
Operating_Unit_ID
Inventory_Organization_ID
Ae_Header_ID

The table is the child of the table CST_RECONCILIATION_SUMMARY, it captures AP or PO/RCV sub-ledger journal details per operational transactions
Those data can rebuilt based on date range 

CST_WRITE_OFFS

CST_WRITE_OFFS is the transactional table for Accrual Write-Off – Posting entity for accounting – Data are permanent

The Columns
Po_Distribution_ID
Write_off_ID
Accrual_Account_ID
Offset_Account_ID
Transaction_Type_Code

The table will generate the accounting post-able to GL via XLA

CST_WRITE_OFF_DETAILS

CST_WRITE_OFF_DETAILS is the detail table for CST_WRITE_OFFS – Data are permanent – Mostly used for data regeneration at write-off reversal

The Columns
Write_off_ID
Rcv_Transaction_ID
Invoice_Distribution_ID
Transaction_Type_Code
Amount
Quantity
Ae_Header_ID
Ae_Line_Num

The table will generate the accounting post-able to GL via XLA 

CST_WRITE_OFFS

CST_WRITE_OFFS is the transactional table for Accrual Write-Off – Posting entity for accounting – Data are permanent

The Columns
Po_Distribution_ID
Write_off_ID
Accrual_Account_ID
Offset_Account_ID
Transaction_Type_Code

The table will generate the accounting post-able to GL via XLA

Data And Queries

R11i

a)

b)

c)

R12

Before Write Off:

 a)

 b)

 c)

 If data is retrieved from the above Tables then proceed to the Write Off Process

After completing the Write Offs above run the following sql to confirm the write offs:

Code Files

The following list of code files are vital in Write Off Transactions in R12

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