AP to GL Reconciliation Webinar Recording (16-Oct-26)

Concept Answers

1. Payables never posts directly to the General Ledger. Its accounting goes through Subledger Accounting: transactions are accounted, transferred to the General Ledger and posted. If any link in that chain breaks, the Payables balance and the General Ledger balance stop agreeing. Oracle provides the Payables to Ledger Reconciliation report for this, out of the box, with drill down from any difference to the transactions behind it. 00:13:07 to 00:15:07
2. Common reasons Oracle lists:
   • Transactions that are not accounted
   • Subledger journals that are not transferred or not posted to the General Ledger
   • Journals posted to the Payables accounts that did not come from Payables, such as manual journals
   • Transactions whose accounts fall outside the account range of the report, for example a liability account without the Accounts Payable financial category
   • Transaction amounts that do not agree with the subledger journal line amounts
   The practice to follow: do not let sources other than Payables post to the Payables accounts. 00:15:07 to 00:17:08
3. The Financial Category of the natural account value must be Accounts Payable. It is set on the Manage Values page of the value set for the natural account segment. Every liability account can carry it, and when the Account parameter is left blank the process includes all accounts with this category. If no natural account value in the chart of accounts has the category, the Prepare Payables to General Ledger Reconciliation process fails. 00:18:21 to 00:20:00 00:39:54 to 00:41:02

   Oracle notes that bills payable, intercompany and tax authority liability accounts can also be given the Accounts Payable category to include them in the reconciliation.

5. Columns: Payables Amount is the subledger side, Accounting Amount is the General Ledger side, and Difference should be zero. Rows: the begin balance, then the period activity (Invoices, Payments, Prepayments, Payables Variance), the end balance, and on the accounting side the non Payables lines such as Non-Payables Begin Balance, non Payables journals and Other Accounting. 00:21:21 to 00:24:42

   The Payables begin and end balances include validated transactions only. Unvalidated transactions are counted in the Payables Variance amount instead. 00:48:46 to 00:49:18 01:25:14 to 01:25:47

9. The Third Party Control Account attribute on the natural account value. Choose Supplier Control Account for the accounts payable liability account. General Ledger then prevents manual journals to that account, and Payables accounting must carry supplier information. 01:15:20 to 01:16:58

   General Ledger prevents manual journals to every account whose Third Party Control Account is set to anything other than No.

11. Create Accounting writes Payables transactions into the books. The reconciliation does not account anything: it compares the two sides and shows which transactions cause a difference, including problems Create Accounting does not show, such as manual journals posted straight to the liability account. 00:57:58 to 01:00:32

    Run the exception report as often as possible during the month, for example weekly, not only at month end, so problems are fixed early. 01:19:38 to 01:22:40

12. Month end checklist:
    • Account all Payables activity, and transfer and post it to the General Ledger, before closing the Payables period and preparing the reconciliation. Afterwards set the Payables period to Closed or Permanently Closed so the summary and detail stay in line. 01:26:49 to 01:27:53
    • Run the Payables Unaccounted Transactions and Sweep process, if Kestrel’s accounting practice allows it, to move unaccounted transactions to the next open period. 01:03:43 to 01:04:20
    • Download in CSV when the data is large and will be worked on; use Excel only for reference. 01:25:47 to 01:26:49

Hands-on Steps

1. Review the Financial Category on the liability account (requirement 4).

   Navigation Setup and Maintenance > Manage Chart of Accounts Value Sets

   00:32:38 to 00:33:18
   • Search for the value set of your natural account segment and click Manage Values 00:33:18 to 00:33:51
   • Find the accounts payable liability account, for example 200100, and check that Financial Category shows Accounts payable 00:33:18 to 00:34:23

   This is a shared instance. Review the value only, and do not change any account.

2. Create and validate an invoice, but do not account it (requirement 6).

   Navigation Navigator > Payables > Invoices > Tasks > Create Invoice

   00:41:02 to 00:41:41
   • Supplier: any active supplier. Number: your initials and a test number, for example AB_KST01. Amount: 250 USD. 00:41:41 to 00:42:11
   • Add one line for 250 with an expense account, keeping the same company on the liability and expense accounts so no intercompany accounting is created 00:42:11 to 00:42:41
   • Make sure the accounting date is in the open period you are testing, then validate the invoice. Do not account it. 00:42:41 to 00:43:12

   The accounting date must fall in an open Payables period. The trainer checks this in Navigator > General Accounting > Period Close 00:36:09 to 00:37:19. In the shared instance, do not open or close any period.

3. Prepare the reconciliation data (requirements 6, 7 and 8).

   Navigation Navigator > Tools > Scheduled Processes > Schedule New Process > Prepare Payables to General Ledger Reconciliation

   00:43:12 to 00:43:42
   • Request Name: your initials and the test, for example AB_KST01_TEST1 00:43:42 to 00:44:13
   • Ledger: your primary ledger. Business Unit: leave blank. Accounting Period: the period of your invoice. 00:43:42 to 00:44:13
   • Review Include Intercompany Transactions and Include Bills Payable, leave Account blank, then Submit 00:44:13 to 00:45:15
   • Wait for the parent process and its child processes to complete 00:45:15 to 00:46:20

   Run this again with a new request name for each test case, for example AB_KST01_TEST2 and AB_KST01_TEST3.

4. Open the report and drill down to the cause (requirement 6).

   Navigation Navigator > Payables > Payments > Tasks > Payables to Ledger Reconciliation

   00:46:20 to 00:47:43
   • Select your ledger and your request name, and check the parameters shown at the top 00:47:43 to 00:48:16
   • Read the Invoices row: your invoice shows in Payables Amount but not in Accounting Amount 00:48:16 to 00:49:18
   • Click the Difference amount to drill down. Your invoice shows a reconciling amount of 250 with no accounting created. 00:49:49 to 00:51:00
   • Leave the drill down with Return, never with Done, which takes you out of the reconciliation 00:52:30 to 00:53:03 01:10:39 to 01:11:42

   Other learners use the same instance, so the summary totals include their transactions too. Check your own result in the drill down, by your invoice number and amount.

5. Pay the invoice and account only the invoice (requirement 7).

   Navigation Navigator > Payables > Payments > Tasks > Create Payment

   00:53:03 to 00:54:49
   • Type: Quick. Select your invoice, pay the full 250, Apply, then Save and Close. 00:54:49 to 00:55:25
   • Open your invoice again and account it and post it to the ledger. Leave the payment unaccounted. 00:55:25 to 00:56:14
6. Rerun the reconciliation and compare (requirement 7).

   Navigation Navigator > Tools > Scheduled Processes > Schedule New Process > Prepare Payables to General Ledger Reconciliation

   00:56:53 to 00:57:28
   • Submit with a new request name for the same period 00:57:28 to 00:57:58
   • In the report, your invoice no longer appears in the Invoices difference, and your 250 payment now appears in the Payments difference 01:02:02 to 01:03:43
7. Post a manual journal to the liability account (requirement 8).

   Navigation Navigator > General Accounting > Journals > Tasks > Create Journal

   01:04:13 to 01:04:53
   • Enter a journal of 120 with two lines, one of them on the accounts payable liability account, with the accounting date in your test period, and save it 01:05:28 to 01:06:29
   • Post the journal and check it is posted 01:06:29 to 01:07:31
   • Prepare the reconciliation again with a new request name 01:07:31 to 01:09:02
   • In the report, search for your request name, then drill down on the non Payables journals line and find your 120 journal by its name 01:09:32 to 01:11:09

   If the liability account is a third party control account, General Ledger rejects the manual journal. That is the control in requirement 9 working.

8. Run the period close exception report (requirement 10).

   Navigation Navigator > Tools > Scheduled Processes > Schedule New Process > Subledger Period Close Exceptions Report

   01:16:58 to 01:17:32
   • Journal Source: Payables. Select your ledger and period, then Submit. 01:17:32 to 01:18:05
   • Open the output: your unaccounted 250 payment is listed with the suggested action to submit Create Accounting 01:18:35 to 01:19:38

   The trainer also shows the Payables Period Close Exceptions Report, which lists the same Payables exceptions. 01:20:08 to 01:22:40