Handling of JD Edwards Inventory Transactions at Period End
Edward Gutkowski, Chief Architect - Rapid Reconciler
Period end close, especially inventory reconciliation, can be a cumbersome process. One of the biggest challenges can be getting an accurate inventory report, due to timing over the last few days of the month. What do I mean? Well there are some factors at play that can cause perpetual inventory to be updated in one period, but the GL booking to be in a different period! How can this happen? Here are some scenarios:
1. Work order transactions – Material issues and completions can occur throughout the day. This causes perpetual inventory balances to constantly change. The general ledger booking for those transactions, however, do not occur until manufacturing accounting runs in batch that evening. The GL date used for booking is typically, unless manually overridden, the system date when the batch job runs. So, if production runs right through the close there will inevitably be inventory transactions that are not booked until the following period.
2. Sales order transactions – Much like work orders, shipment confirmations occur all day and are batch updated to the general ledger each evening via sales update. There are processing options in the sales update program that determine the booking period. Depending on how these options are set, these transactions may cross periods as well.
3. Manual overrides – Transactions can have their default GL date manually overridden.
4. Time zones – If transactions are performed in a different time zone than the JD Edwards server, they may cross periods within the data.
5. Balance based reporting – If you use a “snapshot” perpetual report of item balances at period end, it will not take into account and intentional date overrides.
So, you can see it can be very difficult to have a “clean cutoff” at period end, especially if operations run 24x7. So, what can you do? First, you need information. What types of transactions are crossing periods? From what locations? How much are we talking about?
Fortunately, if you use RapidReconciler, there is a report for it. It’s called “Clean Cutoff Integrity”. The report lists inventory transactions where the creation date and general ledger date are in different periods:
Using this report, you can:
1. See what types of transactions cross periods to determine if batch jobs may need to be scheduled differently.
2. Determine if there are procedural issues where dates are being overridden to incorrect periods.
3. Calculate any necessary accruals.
The handling of inventory transactions at period end can be tricky, but having data provided by RapidReconciler can certainly help make things easier. Happy reconciling!