Reconciliations in JD Edwards

Dave Balser
oracle-JDEJD Edwards is a large and complex ERP system with many moving parts and with many data points, and most organizations have a large number of people inputting and updating the data in JDE. Because of these many moving parts, there is a certain amount of work necessary to keep the system tuned, balanced, and functioning as originally designed. Part of this work is the month-end reconciliation processes.

Inventory Reconciliation

A perpetual inventory that is not reconciled to the general ledger can result in significant internal control and audit issues. There are many complexities in the inventory reconciliation process, one of which is the costing method used. Some costing methods generate variances that may or may not be recorded in the general ledger. Another facet of the issue is the possibility that some transactions that effect quantities may not go through to the general ledger correctly. These variables are often what make the inventory reconciliation process difficult.

Over the years, our financial and distribution consultants have developed an accurate and efficient process for reconciling the CARDEX and item balance file to the general ledger.

This process involves using the detailed transaction records in the CARDEX and tying them to the inventory item perpetual balance file. The resulting reconciled number is then tied into the general ledger. This ensures the integrity of the inventory system.

The process can be completed during the close, ensuring accurate month end reporting.

Received Not Vouchered Reconciliation

One of the most difficult accounts to reconcile, particularly in older versions of JD Edwards, is the received not vouchered account. Until recently, JDE did not have a native process to accurately support the balance in the general ledger. JDE has done a lot of work around making this process smoother, but it is still no easy task.

One of the most frequent reasons that this is thrown out of balance is human error. People do things such as incorrectly reverse or void a voucher, which then reverses the general ledger transaction but does not reverse it on the purchasing side. Landed cost (any and all costs associated with getting a product to the dock), can also cause problems. Not all landed cost transactions are included in the JDE reconciliation report, which creates discrepancies during the Received Not Vouchered Reconciliation process.

We have worked with clients to develop automated processes that identify variances between the general ledger and the receipts file. By automating variance identification processes, the variable of human error is eliminated, leading to more accurate reports.

Both Inventory and Received Not Vouchered Reconciliations need to be completed on a month-to-month basis because once they are out of balance it is incredibly difficult to go back and reconstruct what went wrong. Part of the responsibility lies with the finance team, who needs to be diligent and make sure that they are reconciled each and every month. Aside from a capable finance team, reconciliations require someone who truly understands the nuances of the inventory system as well.

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