Open Payable,Receivable & Trial Balance!!

Question

Hi Guys,
I need your help in Trial Balances.
Our company has aquired a small firm which does not use Oracle ERP.
Now we are planning to merge them under Oracle EBS.
My question is what information do we need to bring related to their
trail balances so that we can reconcile GL with AP,AR & INV.
1) Open Sales Invoices
2) Open Payable
3) Advance Payment
is there any GL component related to this to be brought in??
Thanks in advance
Prashant Pathak

Answer 1

1) Open & Pending PO
No Accounting impact unless you have encumbrance. So you do not have to worry.The only thing you need to worry about is definition of open PO. If PO is received but not yet billed you ought to have accrual balance in your old system (assuming accrual basis of accounting). If you convert these POs, when invoice is matched to this PO (this is no receiving expected as goods are in inventory or consumed), you have to make sure to use the accrual account (it should default). It is kind of a mess as you have to train people carefully to look for holds, which one is received earlier which one is received now and so on. Ideally the value of these POs+AP invoice value conversion with the accrual account should match with you accrual balance in your GL conversion.
2) Open & Pending SO
No accounting impact.
3) Open & Pending AR,AP Invoices ( may be we might close Open invoice's in old system)
AP for liability and distribution accounts, I think you should use actual liability account and reclassify later in GL (reclassify the one that was converted in GL) and for the charge account, you should use dummy accounts as the account could be accrual or actual department charge account. As this will be coming in GL, just make sure that the values match.
4) Open & Pending Receipt
Not sure whether you will be using a dummy bank account or actual one (accounting for cash and clearing are derived from the receipt classes) for converting these receipts. If cash gets converted in the GL into actual cash account (sensitive topic and highly individualistic to each implementation), then you have to use dummy cash account. If not in GL you have to use dummy cash account.
5) Customer
No accounting impact
6) Vendor
No accounting impact
7) Item
No accounting impact
8) On Hand Inv ( what about the cost of this inventory? How do we tackle this in GL?)
In inventory when we covert we have no choice in choosing the material account (inventory account) as it is taken from organization (average cost) or subinventory (standard cost) so on. Hence we cannot change that. The only thing we can change is the account we pass while doing on-hand conversion. Usually we call this guy as Inventory Clearing account. Depending on your set up (different inventory accounts for different organizations) you have to use different clearing accounts.
So in inventory conversion you generate
Dr Inventory account
Cr Inventory Clearing Account.
In GL you bring in the value of inventory account into Inventory clearing account. When you transfer from inv to gl, clearing account gets squared off.
Thanks
Nagamohan