Understanding Open Item Accounting

These topics provide an overview of open item accounting and discuss how to:

  • Set up an open item prompt table.

  • Enter and process open item transactions.

  • Reconcile and close open item balances.

Open item accounting in Oracle's PeopleSoft General Ledger enables you to define, control, and maintain subledger detail for selected balance sheet accounts used in open item transactions. You can track these open item transactions until they are resolved and the balance of the open item account is zero. A common example of open item accounting is the tracking of employee draw account transactions. This section lists prerequisites and discusses:

  • Open item accounting in General Ledger.

  • Common open item terminology.

  • Open item prompt tables.

  • Reconciliation and closing of open item balances.

Before you can use open item accounting you must:

  • Identify open item accounts.

  • Specify an open item ledger.

Use General Ledger open item accounting to:

  • Create one or more open item accounts to track numerous open items.

  • Reconcile open item balances either by using the Open Item page or by using the PS/GL Open Item Reconciliation (GL_OI_RECON) Application Engine process.

  • Display open item balances for each open item account online in the Open Item Status page.

  • Generate reports on each open item's status and transaction detail.

These terms are common to open item accounting in General Ledger:

Term

Definition

Open Item Account

A ChartField account, normally balance sheet accounts, used for open item accounting, such as Employee Advances.

Open Item Key

The identifying or search key for open items in an open item account. For an employee advances account, the Open Item Key field typically is the employee ID or social security number. This implies that any journal entry that posts to the employee advances account also carries an employee ID in the Open Item Key field. This search key is required by the system.

Open Item

Each transaction that affects an open item account remains an open item until the balance of all transactions with a given open item key equals zero. For example, the first open item in the employee advances account is the issuance of an advance. payment against the initial advance become open items until a final payment brings the balance for a given employee ID to zero. When that transaction is posted, all open items for the employee ID are closed.

Closed Item

Transactions for an open item key become closed items when the balance of the open item key transactions equals zero.

Tolerance Amount

Indicates that General Ledger should close transactions in which open items do not sum up to zero, provided the open item balance falls within this specified tolerance amount. This only applies to open items you reconcile manually (online). The system does not apply a tolerance amount for open items reconciled through background (batch) processing.

You can add an Open Item Prompt Table to perform an online lookup of valid open item keys.

The prompt table is a SQL view that you create by selecting two fields from the Open Item Edit Record, as defined with the Open Item Account, in PeopleTools Application Designer. The two fields are:

  • The Open Item Edit Field that you must rename to OPEN_ITEM_KEY in your new SQL view.

  • A description field that is informational only.

Note: Before performing modifications, complete the PeopleTools classes to learn to use the PeopleTools Application Designer and its associated database tools. Completion of the PeopleCode and SQL/SQR classes is recommended.

PeopleTools Documentation: PeopleSoft Application Designer Developer's Guide

You can reconcile and close open item balances using one of the following methods:

  • When you leave the Skip Open Item Reconciliation check box on the User Preferences - General Ledger page blank and post your open item transaction online, the transactions are reconciled and closed during the posting process.

  • When you do not select the Skip Open Item Reconciliation check box on the Request Posting - Run Journal Post page, the transactions are reconciled and closed during the posting process.

  • When you access the Reconcile Open Items - Open Item Recon (reconciliation) page and run the PS/GL Open Item Reconciliation process as a background (batch) process.

  • When you access the Update Open Items - Open Item page, you can select, reconcile, and close open item transactions manually.

    This option is normally used for open items with balances that do not equal zero. The entries you close must still balance or meet the reconciliation tolerance amount.