During the internal reconciliation process, use the AR Reconciliation report to confirm that your transactional and accounting data match. Even if the data matches, however, the journals could still post to incorrect GL accounts. The Potential Reconciling Items report addresses this issue by suggesting journal items that might potentially post to GL accounts with unexpected account types, thus creating reconciliation issues in Oracle General Ledger.
An unexpected account type refers to GL account types that are not normally associated with an item's GL category. General Ledger account types used by Oracle Receivables include assets, liabilities, income, and expense.
For example, a receivable item might be expected to post to an asset account; if the item posts to a non-asset account, then it will display on the Potential Reconciling Items report. Typical items that the Potential Reconciling Items report includes are:
Adjustment journals with offset accounts that are asset accounts, rather than income or expense.
Revenue journals for invoices and credit memos that post to account types other than income.
Unearned revenue journals that post to an account type other than liability.
Unbilled journals created for deferred billing that post to an account type other than asset.
Late charge journals that post to an account type other than income.
Cash, confirmation, or remittance journals that post to account types other than asset.
Short term debt journals created by factoring receipts that post to account types other than liability.
Nonrecoverable tax that posts to an account type other than expense.
Possible causes of this discrepancy could be due to:
Incorrect accounting setup
Incorrect manual updating of GL account distributions
Setup created for activities that is inconsistent with the intended use of Oracle Receivables
When a potential reconciling item is an error, correct the individual transaction as well as the incorrect setup to prevent future occurrences of the same error.
Run the Potential Reconciling Items report as an automatic step during the submission of the AR Reconciliation report. The Potential Reconciling Items report is an exception report that will print only if you select it as a parameter when you run the AR Reconciliation report. Typically, run the Potential Reconciling Items report:
For new software installations, to confirm the correct derivation of accounting.
Whenever accounting setup has been modified, such as the creation of new transaction types or receivables activities.