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R12 Changes To Supplier Cost and Receipt Accrual Adjustments

R12 has introduced a number of changes to the way that Supplier Costs Adjustments and Receipt Accrual Adjustments are handled in Oracle Projects.

Up to and including R11 a restricted number of adjustments types where allowed to Supplier Invoices in Oracle Projects. These adjustments have to be interfaced back to Payables. The adjustments then have to be processed in Payables and interfaced to the General Ledger.

In R12 many of the adjustment restrictions have been removed and the adjustments are interfaced from Projects to Sub Ledger Accounting (SLA) and then from SLA to the General Ledger. So the adjustments made in Projects never now go back to Payables. This also applies to adjustments to Receipt Accruals from Purchasing as these are now allowed in R12; these go from Projects to SLA and not back to Purchasing.

Supplier Cost Adjustments in Release 11.5.10

In R11.5.10 you cannot adjust a Supplier Invoice in Projects where:

• The Invoice had been cancelled
• The Invoice is Paid and the Payables option Allow adjustments to Paid Invoice is disabled
• You are using the Prorate Expense or Prorate Tax discount distribution method
• It’s Prepaid or Selected for Payment

If automatic offsets are enabled in Payables to deal with multiple balancing segments, then there are further restrictions. Once the Invoice is paid Adjustments must be within the same balancing segment.

The Allow Adjustments flag for the transaction sources in Projects are not updatable. For Supplier Invoices (Oracle Payables Supplier Invoices) it is ticked and for receipt accruals (Oracle Purchasing Receipt Accruals) it is not ticked.

Adjustments are carried out from the Expenditure Inquiry screen using the Tools menu. Available adjustments for the queried Expenditure Item and its Project Type are highlighted.

The adjustment required is selected and carried out:

The Distribute process is run:

The interface back to Payables is run:

As long as there are no exceptions this completes the process. Expenditure Inquiry can be re-queried to check the result.

Supplier cost adjustments in Release 12.1

From Release 12 the restrictions on Supplier Invoice Adjustments have been removed. Although the Payable option Allow adjustments to paid invoices remains it only affects adjustments in Payables, adjustments to paid Invoices can still be done in Projects even if this option is disabled. Receipt Accrual Transactions from Purchasing can also now be adjusted.

This is because the routing has changed. Adjustments flow through Sub Ledger Accounting to the General Ledger. Payables and Purchasing know nothing of the changes carried out in Projects.

As these unrestricted adjustments to Supplier Invoices and Receipt Accruals may be something that the client does not want to take place in Projects, the Allow Adjustments flag is now accessible for each of these transaction sources. This flag defaults to not selected i.e. adjustments are not allowed for these transaction sources. Therefore if you try to do an adjustment without changing this flag you will get the following message:

Next when you enable the flag on the transaction source you will get the following message:

The Supplier Cost Clearing Account needs to be defined in either the Project Implementation options or as a rule in SLA because the definition of this in Payables is no longer being referred to. How to do this in SLA will be the subject for a separate article. In the Project Implementation Options this value is set up on the Expnd/Costing tab as follows:

The list of adjustments available on the Tools menu in Expenditure Inquiry has not changed:

So if we carry out a transfer on a paid Invoice transaction:

We then need to run PRC: Distribute Supplier Cost Adjustments (as previously).  This will give the following on Expenditure Inquiry:

The details will show the following:

The credit account has not been generated and the status is Pending Account Event Generation’.

So now we run the new streamline process PRC: One Step Interface Streamline Processes to GL with option XS: Interface Supplier Costs To GL:

This runs the following processes:

• PRC: Submit Interface Streamline Processes
• PRC: Generate Cost Accounting Events
• PRC: Create Accounting

The output report for the accounting events process shows the following:

See Addendum for additional background information

The details form in Expenditure Inquiry now shows the following:

The status has changed to Events generated in Oracle Subledger Accounting. The credit account has now been populated with the default account provided in the Project Implementation options.

Receipt Accrual adjustments in Release 12

Receipt Accrual adjustments were not allowed in Projects prior to Release 12.

In R12 there is a profile option PA: Allow Adjustments To Receipt Accruals which should be set to Yes at the appropriate level in order to allow this.  (This may not be operating at present because you can still do adjustments with this set to No!)

The adjustment process is then identical to that for Supplier Invoices:

One thing to look out for though is that the original transaction that is being adjusted must have been transferred using the (Purchasing responsibility) process Create Accounting – Receiving in Final mode. If this is done in Draft mode then the adjustment will be allowed but the Accounting Generation process will fail as follows:

So you must run the (Purchasing responsibility) process as follows:

The exception item will then clear:

Will this create confusion?

So you can now merrily do adjustments to Supplier Invoices and Receipt Accruals in Projects and the source systems of Payables and Purchasing will know nothing about them. This could potentially create confusion, especially if further adjustments are then done in the source systems for the same transactions. Oracle overcome’s this by giving a higher priority to adjustments done in the source system i.e. it will reverse adjustments done in Projects, if there is a subsequent change to the same transaction in the source system. Maybe this will also lead to confusion – this remains to be seen.

Conclusion

As a by-product of the introduction of Sub Ledger Accounting in Release 12, the adjustment process in Projects for Supplier Invoices and Receipt Accruals has totally changed and the adjustment functionality within Projects has been enhanced. Each organisation will need to determine whether their users in each of the modules will be able to handle this open access to adjustments in the various modules, or whether they would prefer to limit access to this functionality until they are sure it can be catered for in their procedures.

Addendum

I also think it is important at this stage to note that the following processes no longer exist in R12:

• PRC: Interface Supplier Invoice Adjustments Costs to Payables
• PRC: Interface Expense Reports to Payables

In addition the following Auto Accounting function no longer exists either:

• Expense Report Liability Acct

This means that you can no longer create Expenses reports in Oracle Projects (is anyone still doing it like this anyway?). See screen shot:

12 Nov, 2009 by Barry Goodsell

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