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Units of Meas

Oracle Inventory provides you with powerful methods for defining and manipulating units of measure. You can easily convert between the units of measure you define. This enables you to manufacture, order, or receive items in any unit of measure. With units of measure you can:

  1. Define unit of measure classes,
  2. Define units of measure,
  3. Define unit of measure conversions,
  4. Define lot-specific unit of measure conversions

Defining Unit of Measure Classes
Unit of measure classes represent groups of units of measure with similar characteristics.

  • Creating unit of measure classes is the first step in unit of measure management. Each unit of measure you define must belong to a unit of measure class.
  • Each class has a base unit of measure. The base unit of measure is used to perform conversions between units of measure in the class. For this reason, the base unit of measure should be representative of the other units of measure in the class, and generally one of the smaller units. For example, you could use CU (cubic feet) as the base unit of a class called Volume.
  • Unit of measure classes are not organization-specific. Default unit of measure classes are not provided.
1. Enter a unique name for the unit of measure class.
2. Define the base unit of measure for this class.
3. Define a unique abbreviation for the base unit of measure.
 
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Closing a Period

1. Enter all transactions.
Be sure you enter all transactions for the period. Perform all issues,receipts, and adjustments. Verify that no hard copy records exist or are waiting for data entry, such as packing slips in receiving.
2. Check Inventory and Work in Process transaction interfaces.You can set up the material and move transaction managers to execute transactions immediately, then submit an immediate concurrent request to execute, or submit a concurrent request periodically at a time interval you specify. If you do not use immediate processing, or interface external transactions, check the Inventory material transaction manager and the Work in Process move transaction manager before closing the period.

3. Check Cost Management cost interfaces.
Cost Management processes your inventory and work in process accounting transactions as a concurrent request, using a specified time interval. Before you close the period, you should check that the Cost Manager is active.

4. Check Order Management transaction processes. If you use Order Management, ensure that all sales order transaction processes complete and transfer successfully to Inventory.
5. Review Inventory transactions.
Before you close a period, review all of the transactions using the Material Account Distribution Report for the period with a high dollar value and/or a high transaction quantity. Check that you charged the proper accounts. Correcting improper account charges before you close a period is easier than creating manual journalentries.
6. Balance perpetual inventory.
Check that your ending perpetual inventory value for the period being closed matches the value you report in the general ledger. Perpetual inventory value normally balances automatically with the general ledger. However, one of the following sources can create a discrepancy:
– Other inventory journal entries. Journal entries from products other than Inventory that affect the inventory accounts.
– Charges to improper accounts: For example, you issued material from a subinventory to a miscellaneous account, but used one of the subinventory accounts as that miscellaneous account.
– Issue to miscellaneous account: For example, the following miscellaneous transaction issue would cause an out of balance situation: debit account specified at transaction 123, credit subinventory valuation account 123. The debit and credit net to zero with no financial charge, but since the inventory quantity decreased, the month–end inventory valuation reports will not equal the general ledger account balance.
– Transactions after period end reports. This occurs when you run the end of month inventory valuation reports before you complete all transactions for the period.
If you do not run the inventory reports at period end, you can also run these Reports:
– Inventory Value Report– Material Account Distribution Detail Report
– Material Account Distribution Summary Report
– Period Close Summary Report– Period Close Reconciliation report– Inventory Subledger Report (Average Costing Only)
In a organization using Project Manufacturing Average Costing, if there is more than one cost group, the following valuation reports should not be used for reconciliation purposes because these reports list the average value across cost groups.
– Transaction historical Summary Report
– Receiving Value Report
– All Inventories Value Report
– Elemental Inventory Value Report
– Subinventory Account Value Report
– Item Cost Report
7. Validate Work in Process inventory.
If you use Work in Process, check work in process inventory balances against transactions with the WIP Account Distribution Report.

8. Transfer transactions in advance of closing period (optional).
If time permits, run the general ledger transfer process up to the period end date before closing the period.
Closing a period executes the general ledger transfer automatically. However, you can also run this process without closing a period using Transfer Transactions to General Ledger. Since you cannot reopen a closed period, running this process before period close allows you to proof the interfaced transactions and make adjustments to the period via new inventory transactions as necessary.
9. Close Oracle Payables and Oracle Purchasing.
If you use Payables and Purchasing, you need to close the accounting periods in the following order:
– Payables
– Purchasing
– Inventory
If you only use Purchasing and Inventory, you need to close Purchasing first. Close Payables before Purchasing, in preparation for accruing expenses on uninvoiced receipts. Doing so ensures that all new payables activity is for the new month and you do not inadvertently match a prior month invoice in payables to a new month receipt. When you close Purchasing or Inventory, you cannot enter a receipt for that period. However, as a manual procedure, close Purchasing before Inventory. This still allows miscellaneous transaction corrections in Inventory.

10. Run the Period Close Reconciliation report.
This report automatically runs in simulation mode for the open period. It is used to match account balances with inventory value at period end.
11. Close the accounting period and automatically transfer transactions to the general ledger.
This sets your Inventory Accounting Period status to Closed not Summarized. If the CST: Period Summary profile option is set to Automatic, no other steps are necessary. The period status is set to Closed when the summarization process has completed.

12. If the CST: Period Summary profile option is set to Manual, create period summarization transactions by generating the Period Close Reconciliation report.
The concurrent program creates summarized transaction records, and displays the differences between account balances and inventory value.
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Inventory Pending Transaction

Users can see the number of pending transactions by navigating to the Inventory Accounting Periods Form.
Navigate > Cost > Accounting Close Cycle > Inventory Accounting Periods
Place cursor on the appropriate open accounting period and click on the [Pending] Button. There are three zones titled “Resolution Required”, “Resolution Recommended” and “Unprocessed Shipping Transactions”.

Unprocessed material transactions exist for this period
This message indicates you have unprocessed material transactions in the MTL_MATERIAL_TRANSACTIONS_TEMP table. You are unable to close the period with this condition. Please see your system administrator. Inventory considers entries in this table as part of the quantity movement.
Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period, and never be picked up by the period close or general ledger transfer process.
Uncosted material transactions exist for this period
This message indicates you have material transactions in the MTL_MATERIAL_TRANSACTIONS table with no accounting entries (Standard Costing) and no accounting entries and no costs (Average Costing). You are unable to close the period with this condition. These transactions are part of your inventory value.
Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period, and never be picked up by the period close or general ledger transfer process.
Pending WIP costing transactions exist in this period
This message indicates you have unprocessed resource and overhead accounting transactions in the WIP_COST_TXN_INTERFACE table. You are unable to close the period with this condition. These transactions are in your work in process value, and awaiting further processing.
Closing the period in this situation is not allowed because the resultant accounting entries would have a transaction date for a closed period, and never be picked up by the period close or general ledger transfer process.
Unprocessed Shipping Transactions
“Pending Transactions” in the Unprocessed Shipping Transactions zone indicate there are transactions in the WSH_DELIVERY_DETAILS table in a status of shipped.
Pending receiving transactions for this period
When you use Purchasing, this message indicates you have unprocessed purchasing transactions in the RCV_TRANSACTIONS_ INTERFACE table. These transactions include purchase order receipts and returns for inventory. If this condition exists, you will receive a warning but will be able to close the accounting period. These transactions are not in your receiving value. However, after you close the period, these transactions cannot be processed because they have a transaction date for a closed period.
Pending material transactions for this period
This message indicates you have unprocessed material transactions in the MTL_TRANSACTIONS_INTERFACE table. If this condition exists, you will receive a warning but will be able to close the accounting period. These transactions are not in your inventory value. However, after you close the period, these transactions cannot be processed because they have a transaction date for a closed period.
Pending move transactions for this period
This message indicates you have unprocessed shop floor move transactions in the WIP_MOVE_TXN_INTERFACE table. If this condition exists, you will receive a warning but will be able to close the accounting period. These transactions are not in your work in process value. However, after you close the period, these transactions cannot be processed because they have a transaction date for a closed period.

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Transfer Transactions to General Ledger

You can perform the general ledger transfer at any time during an open period—not just at period close. Interim transfers allow you to reconcile and transfer information weekly, making the month–end period close process much simpler and
faster.
The general ledger transfer loads summary or detail accounting activity for any open period into the general ledger interface, including both inventory and work in process entries. When more than one period is open, the transfer selects transactions from the first open period, up to the entered transfer date, and passes the correct accounting date and financial information into the general ledger interface.
For example, when you transfer detail entries, the transaction date is the accounting date with a line for line transfer. When you transfer summary entries with two periods open and enter a transfer date in the second period, the transfer process assigns the period one end date for all the summarized transactions in period one and assigns the entered transfer date for the summarized transactions in period two.
For each inventory organization, Cost Management transfers transactions to the general ledger interface table, line for line. If you transfer summary information, Cost Management groups transactions by GL batch, by journal category, by currency code, and by account.
Attention: Transfer in detail only if you have low transaction volumes. Transferring large amounts of detail transactions can
adversely affect General Ledger performance.
For both detail and summary transfers, Cost Management passes the organization code, GL batch number, batch description, and batch date. When you transfer in detail, you also pass the material or work in process transaction number. In General Ledger, you can see the transferred information, as follows:

Cost Management uses the journal source Inventory for both inventory and work in process transactions.
The journal categories Inventory and Work in Process distinguish between inventory and work in process transactions.
Using Journal Import and Post Journals processes in General Ledger, you can then post this information to the general ledger.
Period Summarization Process
Summarization of transaction records for the open period is the last step in period close. You have the option to perform this process automatically or manually using the profile option, CST:Period Summary. If the profile option is set to Automatic, the period is closed and summarized when you change the period status from Open to Closed.
If the profile option is set to Manual, you can delay summarization – but you must summarize these delayed periods in accounting period order. For example, if you delay summarization for a given period, the following period cannot be summarized until the previous period is summarized. In situations where summarization is delayed, the longer the delay – the larger the number of transaction records needed for reconciliation purposes. This situation can cause summarization to take
more time to complete.
If you do not choose to summarize periods, set the period status to Closed not Summarized.
The Period Close Reconciliation report is used to compare account balances with inventory value at period end. You can run the report in simulation mode by generating it for an open period. The report can be generated at any time during the period.

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Inventory Period Close

The period close process for perpetual costing enables you to

  1. Summarize costs related to inventory and manufacturing activities for a given accounting period.
  2. Distribute those costs to the general ledger.
  3. Calculates ending period subinventory values.
  4. Closes the open period for Inventory and Work in Process.
  • Generally, you should open and close periods for each separate inventory organization independently. By keeping only one period open, you can ensure that your transactions are dated correctly and posted to the correct accounting period. (For month–end adjustment purposes, you can temporarily hold multiple open periods.)
  • The accounting periods and the period close process in Cost Management use the same periods, fiscal calendar, and other financial information found in General Ledger.
  • Inventory and work in process transactions automatically create accounting entries. All accounting entries have transaction dates that belong in one accounting period. You can report and reconcile your transaction activity to an accounting period and General Ledger. You can transfer summary or detail transactions to General Ledger. You can transfer these entries to General Ledger when you close the period or perform interim transfers.
  • When you transfer to General Ledger, a general ledger (GL) batch ID and organization code are sent with the transferred entries. You can review and report the GL batch number in General Ledger and request Inventory and Work in Process reports by the same batch number. You can also view general ledger transfers in Inventory and drill down by GL batch ID into the inventory and WIP accounting distributions.

Note: Purchasing holds the accounting entries for receipts into receiving inspection and for deliveries into expense
destinations. This includes any perpetual receipt accruals.Purchasing also has a separate period open and close, and uses
separate processes to load the general ledger interface.
Closes Open Period
The period close process permanently closes an open period. You can no longer charge transactions to a closed period. Once you close a period, it cannot be reopened. As a precaution, you can do a GL transfer without closing the period.
Transfers Accounting Entries to the General Ledger
If your inventory organization’s parameter for Transfer to GL is None, perpetual accounting entries are not transferred to the General Ledger. The other choices for the Transfer to GL parameter are Summary and Detail, indicating whether the period close process creates summary or detail transactions for posting to the general ledger. The period close
process transfers the following information:
• work in process transactions
• job costs and variances
• period costs for expense non–standard jobs
• depending on the selected options, the remaining balances for
repetitive schedules
Note: If you have chosen the new Periodic Costing feature, Cost Management warns you of the possibility of inadvertently
posting both Periodic and perpetual costed transactions to the General Ledger. The warning displays if there is at least one
legal entity–cost type combination that has the Periodic Cost Post Entries to GL option checked, where the organization
under that legal entity also has the perpetual cost GL transfer enabled.
Calculates Ending Period Subinventory Values
For each subinventory, the period close adds the net transaction value for the current period to the prior period’s ending value. This, along with values intransit, creates the ending value for the current period.

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