8.2 Payables to General Ledger Reconciliation
Key Takeaways
Every liability natural account to reconcile needs the Accounts Payable financial category, or the preparation process fails; bills payable, intercompany and tax authority liabilities can be included the same way.
Reconcile by business unit only if primary balancing segment values are explicitly mapped to business units; with centralized payment processing, reconcile by ledger.
Prepare Payables to General Ledger Reconciliation takes Request Name, Ledger, Business Unit, Accounting Period (open or closed), Account, Include Intercompany Transactions and Include Bills Payable.
The report runs only for the primary ledger and non-adjustment periods; its begin and end Payables balances should agree with the Payables Trial Balance report.
Common causes of differences are unaccounted transactions, accounts outside the selected range, subledger lines that don't match transaction amounts, non-Payables journals posted to Payables accounts, and journals not transferred or posted.
The published objective is Considerations for setting up the Payables to General ledger Reconciliation. The report is a close-time control, and the setup decisions decide whether it works at all.
Setup considerations
1. Reconcile by business unit or by ledger
- By business unit: allowed only if you implicitly map primary balancing segment values to business units. Each business unit can then reconcile its own activity.
- By ledger: required if balancing segments aren't mapped to business units. You need access to all business units in the ledger for a complete reconciliation.
- Centralized payment processing using the service provider model also requires reconciling by ledger. With a business unit on the prepare process, the output could be incomplete.
2. Assign the Accounts Payable financial category
Assign the Accounts Payable financial category to all liability natural account values on Manage Values for the natural account value set. You can also give the category to bills payable, intercompany and tax authority liability accounts so they appear on the report. With the category assigned, you can leave the Account parameter blank and every Accounts Payable account in the ledger is included. If no natural account value has the category, the preparation process fails.
3. Set the data purge frequency
The Reconciliation Data Purge Frequency profile option sets how many days of reconciliation data to keep. Each time the preparation process runs, older requests are purged. For example, with 30 days set and runs on 1 January and 29 January, nothing is purged. A run on 1 February purges the 1 January request.
4. Understand the security
- General Ledger users (secured by data access sets) see GL data for their balancing segment values, and Payables and SLA data for all business units in the ledger.
- Payables users (secured by business unit) see Payables and SLA data for their business units, and GL data for all balancing segment values in the ledger.
Data roles granting only some business units or balancing segments therefore change what each user sees on the report.
Prepare Payables to General Ledger Reconciliation
Run this process first. It selects the data for the report's summary.
| Parameter | Notes |
|---|---|
| Request Name | A descriptive name, for example including the period and run time, since you may run it several times |
| Ledger | Limited to the ledgers your security allows |
| Business Unit | Only if business units are mapped to balancing segments. Leave it blank with centralized payment processing. |
| Accounting Period | Open or closed periods |
| Account | Optional subset of Accounts Payable accounts |
| Include Intercompany Transactions | Include or exclude them. Restrict the accounts to the intercompany accounts to reconcile only intercompany. |
| Include Bills Payable | If Yes, include the bills payable accounts in the Account parameter when they differ. You must select Yes if bills payable uses the same account as the regular liability. |
Reading the report
The Payables to Ledger Reconciliation report is an Oracle Transactional Business Intelligence report. You find it under Reports and Analytics > Shared Folders > Financials > Payables, and it uses the Subledger Accounting – Payables Summary Reconciliation Real Time subject area. It runs only for the primary ledger and non-adjustment periods. You select the ledger and the request name from the preparation run.
The summary shows Payables and accounting begin balances, the period's activity, how it was accounted, and end balances.
- The Payables Begin Balance (accounting amount) should agree with the Payables Trial Balance for the last day of the previous period.
- The Payables End Balance should agree with the Trial Balance for the last day of the period being reconciled.
Drill into any amount in the Difference column to open the Differences Detail report. It shows the real-time transactions behind the amount and suggests likely causes.
Common causes of differences
Oracle lists these reasons that transactional and accounted amounts differ:
- Transactions that aren't accounted. Run Create Accounting, or check the Unaccounted Transactions and Sweep report.
- Subledger accounts outside the report's account range, or missing the Accounts Payable category.
- Transaction amounts that don't agree with the subledger journal lines, for example because of custom accounting rules.
- Journals posted to the subledger or general ledger that didn't come from Payables, such as a manual GL journal to the liability account. Oracle advises: don't allow general ledger sources other than Payables to post to Payables accounts.
- Subledger journals not transferred or posted to the general ledger. Run Post Journal Entries to General Ledger or post in GL.
Other sources Oracle mentions include rounding, transactions not validated, and differences between the summary and detail views. After correcting anything, rerun the preparation process and review the summary again. If the begin balance plus the period's activity doesn't equal the end balance and you can't explain it, contact Oracle Support.
Preventing GL-only postings
Stop manual journals to AP liability accounts, which is cause 4. Configure the natural accounts so only Payables can post to them, using the third-party control account option on the account values. Then review journal sources regularly in the differences detail.
Other reconciliation reports
Oracle's close checklist uses these alongside the reconciliation report:
- Payables Trial Balance: open liability by supplier as of a date.
- Payables Posted Invoice Register and Payables Posted Payment Register: what was accounted.
- Payables Open Items Revaluation: revaluation of foreign-currency open items.
The report can also handle invoices for merged suppliers; Oracle documents how they appear on it.
A company uses centralized payment processing: one payment business unit pays invoices for six invoice business units. How should it run Prepare Payables to General Ledger Reconciliation?
By ledger, leaving Business Unit blank so no unit's activity is missed
By each invoice business unit separately, then add up the six results
By the payment business unit only, because it owns all the payments
By legal entity, because the report can't run at the ledger level for shared services
An analyst submits Prepare Payables to General Ledger Reconciliation with the Account parameter blank, and the process fails. Which setup is most likely missing?
The Reconciliation Data Purge Frequency profile option for the ledger
A data access set for the analyst
The Accounts Payable financial category on liability accounts
An open accounting period in General Ledger for the reconciliation period
The reconciliation summary shows a difference for the period. The Differences Detail lists a manual GL journal posted to the AP liability account. What does Oracle recommend?
Rerun Create Accounting in Final mode for Payables, then rerun the preparation process
Sweep the manual journal into the next period with the unaccounted sweep
Turn off the Accounts Payable financial category on that account
Stop non-Payables sources posting to Payables accounts, then correct and rerun
Sections you finish are checked off in the contents.