Mar 22, 2013

AR Reconciliation Report

In any ERP Application, there are two types of reconciliations that you do. They are

1. Internal Reconciliation
2. External Reconciliation

Internal Reconciliation refers to the reconciliation within the application. At a high level this means that the difference between period opening balance and the period closing balance should be equal to the value of the transactions entered in the period.

As an example, let us say that the Opening AR Balance is 0, during the period you enter an invoice of Rs.1000, and a Credit Note of Rs 600 then your AR Closing Balance for the period should be Rs.400.

This is internal reconciliation

Once you do the internal reconciliation, you have to transfer the transactions to GL. At the end of the period you will reconcile the customer balances with the GL Balances. This reconciliation is known as external reconciliation.

AR Reconciliation Report is a great report to do the Internal Reconciliation for the AR Module. This report does all the tough work for you and will give you, in summary, all the actions that happened in AR.

This report uses the following formula.

Opening Balance
      add    Transactions
      Less   Invoice Exceptions
      Less   Applied Receipts
      Less   Unapplied Receipts
      add / less   Adjustments
Closing Balance

For each of the above, there are standard reports in Oracle

For Opening Balance       Use          Aging- 7 Buckets Report
For Invoice Exceptions    Use          Invoice Exception Report
For Applied Receipts       Use          Receipts Register
For Unapplied Receipts    Use          Unapplied Receipts Register
For Adjustments              Use           Adjustments Register
For Closing Balance        Use           Aging- 7 Buckets Report

All these are standard reports and can be easily converted to Excel for reconciliation purposes

One advantage of these reports are that these work correctly even in India Localization Environment

Drawback? These are not in Excel Format (though they can be easily converted)

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