Account Reconciliation

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Topic

    Vikash Sethi
    Prepaid Automation
    Topic posted August 12, 2019 by Vikash SethiSilver Medal: 2,000+ Points, tagged Account reconciliations, Auto-reconciliation, Data load, Reporting 
    55 Views, 8 Comments
    Title:
    Prepaid Automation
    Summary:
    Prepaid Automation
    Content:

    We are on ERP Fusion Cloud. Still thinking about Account Reconciliation Cloud Service. Question is how Prepaid Automation and Reconciliation works in ARCS?

    Currently the business is doing it in excel but we are planning to use Multi-Period Accounting in Payables module going forward but we have around 500 lines of existing prepaids in excel. How to convert that from excel to AP or GL? How will ARCS help? Someone was telling that ARCS can get information from Oracle and will create Prepaid Reconciliations & write back to ERP in GL to create prepaid accounting automatically? 

    If you know about this, please let me know.

    Thanks,

    Vikash

    Comment

     

    • Krishnan Venkatachalam

      Hi Vikash,

      Per my understanding, unless you do Transaction Matching in ARCS, it does not create any journals to write back. The process is to create an adjustment in ARCS when two sources dont match (Source 1 being AP and Source 2 being GL). In your case since AP is within the ERP and no GL entries have been made not sure how ARCS can help.

      Going back to your basic questions:
      - How can I migrate Pre Paid into ERP
         * That depends on do you already have Journals in the GL for previous months? If yes, then you may want to setup an invoice less recorded amounts and start the schedule in the ERP. I would not open up prior periods to reverse these entries just to put in a valid invoice

      - Can ARCS help
        * ARCS is meant for reconciliation and when there is a mismatch between sources it has the ability to adjust the ERP. The way you have explained this situation I dont think ARCS is a good candidate.

      Regards,

       

      • Vikash Sethi

        Thanks Krishnan for the information. What kind of prepaid reconciliation and/or prepaid schedules can ARCS maintain? Is there any benefit exploring ARCS for this purpose?

         

    • Michael Lau

      Prepaid reconciliations are done using the Amortization functionality in ARCS.  You can import all your prepaids with their schedule information (i.e. start month, opening balance, # of periods to amortize, etc..).  ARCS will calculate the amortization for each period.  The ending balance for each prepaid (after amortization) should match your GL balance.You could also setup rules to carry forward your prepaids to the next period automatically.

      As Krishnan mentioned, currently there is no automated write back to the GL for the amortizations, but you could build a custom report to get this information out of ARCS and into a journal upload format that you could then post to your GL.

      Regarding migrating your existing prepaids into ARCS, you could tweak your existing Excel file to match an ARCS upload template and then upload all the prepaids into ARCS.

      If your ERP has all the information that is needed to setup a amortization schedule in ARCS (i.e. start period, opening balance, # of periods to amortize) and can generate this information in the correct format, you could automate the loading of new prepaids into ARCS as well.

       

       

      • Krishnan Venkatachalam

        Hi Michael,

        Interesting approach! But wouldnt this cause a SOX risk? The schedules in ARCS are supposed to be stand alone proof that what was booked in the ERP is correct. But if the basis of ERP booking the entry is ARCS itself, then the schedule in ARCS can no more be considered as SOX proof?

        Regards,

      • Krishnan Venkatachalam

        Hi Michael,

        Interesting approach! But wouldnt this cause a SOX risk? The schedules in ARCS are supposed to be stand alone proof that what was booked in the ERP is correct. But if the basis of ERP booking the entry is ARCS itself, then the schedule in ARCS can no more be considered as SOX proof?

        Regards,

        • Michael Lau

          I only mentioned a custom report because of Vikash's question about write back (some ERPs do not have native amortization capabilities).  If the ERP is already doing the amortization, you are correct, just need to compare the ARCS balance to ERP balance to confirm accuracy and completeness.

      • Nick Boronski

        Couldn't agree more with Michael. Account Reconciliation Cloud absolutely has value to offer within the prepaid reconciliation process. While most clients are satisfied with the out-of-the-box reporting, there is always the custom reporting option if writing back to the GL is necessary within the Reconciliation Compliance feature set (as Krishnan mentioned, journal write-back is currently only out-of-the-box functionality in the Transaction Matching feature set).

        Furthermore, it's worth noting that Oracle has already stated in our Oracle ACE meetings (safe harbor, of course) that there is a more robust journal module on the product road map (maybe targeting 2020?).

        While your company is already on ERP Fusion Cloud and, therefore, not strangers to the cloud technology world you may not have as much familiarity with the Enterprise Performance Management (EPM) Cloud suite of products. If you'd like, feel free to check out my blog post on the Alithya site where I discuss my thoughts on why Account Reconciliations actually makes a lot of sense as a first place to start with EPM Cloud implementations --> https://www.alithya.com/en/insights/blog-posts/a-safe-step-into-the-cloud-the-argument-for-account-reconciliation-cloud-service-arcs

        This is a great question, so thanks for contributing to the Oracle CCC forums.

        Nick Boronski

        @PocketACE_NB