Period-End Process

Period-End process is performed at the end of each period(depends on the organization). It is very important in any organization because if the period is not closed, the accounting for that period can not be closed, which will affect the financial results reporting of the respective period.
One can not close any module without following the order.The suggested module wise sequence to be followed for Period-End process is as follows.

1. Projects
2. Payables
3. Purchasing
4. Assets 
5. Receivables
6. Inventory
7. General Ledger

Accounting entries in Purchasing, Payables and Receivables

When we enter transactions in Purchasing, the accounting entries will get generated with respect to the following accounts.

1. When Creating a receipt:
Inventory Receiving A/C DR
Accrual Account CR

2. At the time of Receiving transactions:
Asset clearing A/c or Inventory valuation a/c DR
Inventory Receiving A/c CR

3. When a Payables invoice matched with PO:
Accrual A/C DR
Liability A/c

4. when asset addition done:
Asset A/c DR
Asset Clearing A/c CR(Asset item)
           (OR)
expense a/c DR
inventory Valuation A/C(Inventory item)


When we enter transactions in Payables, the accounting entries will get generated with respect to the following accounts.

1. Invoice: When we create accounting for an invoice, the accounting will be generated with respect to the following accounts.

Item Expense A/C      DR
Liability  A/C             CR

2. Payment: There are two stages in which the accounting may generate, based on the accounting option that we setup in Payables.
  
> Direct Pay-No Clearance: In this stage, there will be no clearance process separately and the cash account will get credited directly.

Liability  A/C    DR
Cash  A/C         CR

> Pay and Clear: In this stage, the payment and clearance process will have separate accounting entries.

At the time of Payment:

Liability A/C               DR
Cash Clearing A/C      CR

At the time of Clearance:

Cash Clearing A/C    DR
Cash A/C                  CR

 When we enter transactions in Receivables, the accounting entries will get generated with respect to the following accounts.

1. Accounting for invoice:
Receivables A/C DR
Revenue Account Cr

2. Credit memo:
Revenue Dr
Receivables A/C CR

3. Receipts:
Cash A/C DR
Receivables A/c CR

R12 Upgrade Vs Re-implement:

When a company is planning to adopt R12 from previous versions, the first question arises is whether to Upgrade or Re-implement?

First let us see what is the difference between an upgrade and re-implement.

An R12 upgrade involves running the scripts on a database to transform it into R12 structure. During the upgrade all the data will be moved to the respective  tables in R12.

A re-implementation involves creating a completely new oracle applications installation, doing all the set-ups from scratch and moving the data using data conversions to the new R12 database.

Let us see the advantages and disadvantages of an upgrade and re-implement

Upgrade:

The major advantages of an upgrade process are:

1. The upgrade process has become easy as the technology, tools and the upgrade scripts are significantly improved
2. There will be no effort of data conversions and testing, as the data will be moved during the upgrade process
3. Not many customizations are needed
4. No changes in the functional setups
5. Upgrade is often cheaper as it involves significantly less work for setting up the applications

But an upgrade process requires very significant effort technically and is more challenging. In comparison with re-implementation process an upgrade is risky in technical perspective.


Re-implement:

The main advantage with Re-implementation process is that the technical risk is low when compared with an upgrade.

Disadvantages:

1. Re-implementation process is very extensive as the data conversions and testing is involved.
2. Lot of effort is needed for application configuration.


Organizations generally go for following considerations before going for the re-implementation.

1. There are major changes in the Organization structure or business processes, and the existing application configuration doesn't fit for the business
2. There are lot of customizations that can be avoided with the new features and functionality
3. The original implementation has disturbed and unusable.
4. There is lot of bad data exists.