To close 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. Perform all Period Close Diagnostics to view details of transactions that are preventing period close.

   See: Period Close Diagnostics.

3. 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 journal entries.

4. 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.

     • Purging standard cost history: See: Purging Standard Cost Update History for the impact of purging standard cost history on period end discrepancies.

     • 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.

       Note: If you do not run the inventory reports at period end, then you can also run the following reports:

       • Period Close Summary Report

       • Material Account Distribution Detail Report

       • Material Account Distribution Summary Report

       • Inventory Subledger Report (Average Costing Only)

       Note: In an organization using Project Manufacturing Average Costing, if there is more than one cost group, then the following valuation reports should not be used for reconciliation purposes because these reports list the average value across cost groups.

       • Inventory Value Report

       • Transaction historical Summary Report

       • Receiving Value Report

       • All Inventories Value Report

       • Elemental Inventory Value Report

       • Subinventory Account Value Report

       • Item Cost Report

5. Validate Work in Process inventory.

   If you use Work in Process, then check work in process inventory balances against transactions with the WIP Account Distribution Report.

6. Close Oracle Payables and Oracle Purchasing.

   If you use Payables and Purchasing, then close the accounting periods in the following order:

   • Payables

   • Purchasing

   • Inventory

   If you only use Purchasing and Inventory, then 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.

7. 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.

8. Close the accounting period.

   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.

9. 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.

   See: Period Summarization Process, and Period Close Reconciliation Report

   Unprocessed Transaction Messages

   If there are unprocessed transactions, then one of the following messages appears:

   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.

   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.

   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.

   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 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.

   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 resulting 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.