Receipt Accounting for Purchase Orders Set to Accrue at Period End

You can run the Create Uninvoiced Receipt Accruals process to create accrual accounting for purchase orders that are set to accrue at period end. This process creates accruals for purchase orders based on these conditions:

Although the receipts have been received, accounting hasn't been created because the Accrue at Receipt option isn't selected in the purchase order.
Receipts haven't been invoiced or the invoiced quantity is less than the quantity received on the purchase order.

You must run this process after closing the Accounts Payable period and transferring all the Accounts Payable invoices to Cost Management, and before you close the General Ledger period. Also, you can run this process as many times or as frequently as required during the accounting period to have the latest expense and accrual information in your books of accounts.

The image here shows the various processes and the sequence in which you must run them to create accruals for the uninvoiced receipts. It also shows the work areas from where you can run these processes.

The image illustrates the processes that you must run and their sequence to create accruals for the uninvoiced receipts.

You start by running processes to transfer the receipt and invoice information to Cost Management. Then you run the Create Receipt Accounting Distributions process so that the appropriate data is populated when you generate the Uninvoiced Receipt Accruals Report. Before you generate the report, you must also run the Create Uninvoiced Receipts Accruals process in the Report accrual run mode.

The report helps you to understand the details about the uninvoiced purchase order receipts for which accruals will be created. After reviewing the report, you can perform additional actions:

Exclude receipt accruals from the report by accounting the corresponding invoices.
Exclude receipt accruals from the report by setting purchase order schedule status to Finally Closed.

When you run the Create Uninvoiced Receipt Accruals process in the Accounting accrual run mode, the corresponding distributions are created. Next, you run Create Accounting to transfer the distributions to SLA and General Ledger. And lastly, you run the Create Accrual Reversal Accounting process, which creates a new journal entry on the first date of the next open general ledger period.

The integration with General Ledger ensures that the period end accruals and also the reversals are automatically created in General Ledger. By automatically creating the reversals, double booking doesn't occur when the invoices are eventually received.

Before You Begin

Before you start creating the accruals for uninvoiced receipts at period end, make sure that you have completed all the upstream processes, which include creation of receipts and the final accounting of invoices wherever possible.

Next, run these processes from the Scheduled Processes work area:

Transfer Transactions from Receiving to Costing - This process transfers receipt information to Receipt Accounting.
Transfer Costs to Cost Management - This process transfers invoice information to Receipt Accounting.

Review the status of the processes to make sure that they have completed successfully.

After you transfer the receipt and invoice information to Receipt Accounting, run the Create Receipt Accounting Distributions process from the Receipt Accounting work area. You then run the Create Uninvoiced Receipt Accrual process in the Report accrual run mode followed by generating the Uninvoiced Receipt Accruals Report. You can also run these processes from the Scheduled Processes work area.