Understanding Receipt Accrual

The PeopleSoft Purchasing Receipt Accrual Application Engine process (PO_RECVACCR) can be
run on demand and multiple times in the same accounting period. This aspect of the process
involves backing out previous transactions before new transactions can be generated, so that you
can create reversal transactions for the current and next periods.
Note: For the Receipt Accrual process to work as designed, both PeopleSoft Payables and
PeopleSoft Purchasing must be installed, and you must use PeopleSoft Payables Matching to
validate vouchers.
When you run the Receipt Accrual process, the receipt accrual liability account accrues, or in other
words, is credited for the amount of unbilled receipts. Any associated expense accounts are debited
for the amount of unbilled receipts. The encumbrance reclassifications are generated and thereby
provide a more accurate picture of the operating budget. The Receipt Accrual process also
generates reversal transactions for the next period. PeopleSoft Purchasing retrieves the expense
account information from the associated purchase orders or non-purchase order receipts to give you
an accurate forecast of the expense account balance, even if several receipts have not been billed
yet.
For example, suppose that you received 20,000 USD in materials in a month, but were billed for
only 5,000 USD. The Receipt Accrual process ensures that the expense accounts reflect the
remaining 15,000 USD in upcoming debits. This helps reduce the impact of unexpected debits to the
expense accounts. Without the Receipt Accrual process, this 15,000 USD is hidden until the debits
bill and post to the expense accounts.
When you run the Receipt Accrual process, it reverses the entries of both the receipt accrual liability
account and the expense accounts. This keeps you current with all the unbilled receipts, enabling
you to manage the expense accounts closely.
If receipts remain unbilled when the Receipt Accrual process runs in the new period, the same
process begins anew with credits to the receipt accrual liability account and debits to the expense.
Receipt accrual supports:
 Expensed items where you have received the goods from the supplier, but the supplier has
not yet invoiced the organization.
 Expensed items where a non-purchase order receipt has been entered.
You can set up receipt accrual for one scenario, both scenarios, or neither.
Here is a more detailed description of the way in which the Receipt Accrual process works:
1. Before creating the accounting entries for accrual, the process creates reversal transactions
to back out all accrued receipts in the staging record (RECV_LN_ACCTG) in the current
period.
The accrued receipts must first have successfully run one of the following three processes:
the Entry Event Generator, Comm Cntrl Budget Processor, or the Journal Generator.
2. The original transactions for which reversals have just been created are identified as
canceled.
3. Next, the process generates new transactions for receipts that qualify for accrual and creates
the following six transactions in the staging record for each receipt line:
a. An expense in the current period and an expense reversal in the next period.
ChartFields are inherited from the receipt distribution line. These transactions are
budget-checked if commitment control is enabled. Entry events are generated if they
are required on the Installation Options - Entry Event page. Journal Generator also
processes the transactions.
b. An accrual in the current period and an accrual reversal in the next period.
 This account uses ChartField inheritance defined by the user. The ChartFields are
inherited according to user selections of inheritance options on the Chartfield
Inheritance page. Values are:
Always Inherit: Value comes from the receipt line distribution table
RECV_LN_DISTRIB.
Do Not Inherit: Value comes from Accounting Entry Template table
DST_DFTL_CNTRL.
Inherit Within Unit: Value comes from Accounting Entry Template table
DST_DFTL_CNTRL.
Use Unit Default: Value comes from Accounting Entry Template table
DST_DFTL_CNTRL.
These transactions are not budget-checked but are processed by Journal Generator,
and the entry events are generated if they are required on the Installation Options -
Entry Event Entry page.
c. Encumbrance transactions are generated for the current period and reversal
transactions are generated for the next period.
ChartFields are inherited from the receipt distribution line. These transactions are
budget-checked, and entry events are generated if they are required on the Entry
Events page. Distributed appears by default as the general ledger distribution status,
so that the Journal Generator process does not process them. N appears by default as
the budget header status and budget line status. Accrual and encumbrance
transactions look exactly the same in the staging record except for the account type
(RAC or ENR), general ledger distribution status, and the ChartFields. Encumbrance
transactions are not created if commitment control is not installed or for receipts that
are not associated with purchase orders.
4. Separate transactions are created to record miscellaneous charges that are derived from
receipt landed cost transactions (RECV_LN_DIST_LC).
Multiple Currencies
If you use multiple currencies, the accounting entries post in both the transaction currency and the
base currency. PeopleSoft Purchasing uses the conversion rate defined on the purchase order to
calculate the base amount to accrue.
VAT and Miscellaneous Charges
If there are miscellaneous charges or landed cost charges associated with the purchase order,
these charges accrue only if you select the Accrue Charge check box on the Misc Charge/Landed
Cost Defn page and the Accrue PO Receipts check box on the Purchasing Definition - Business
Unit Options page. In addition, only miscellaneous charge and landed cost transactions with these
Accounting Entry Type definitions are eligible for accrual:
 FRG (freight expense).
 MISC (miscellaneous charge expense).
 STX (sales tax expense).
 UTX (use tax expense).
 VIN (value-added tax input nonrecoverable).
The Receipt Accrual process accrues the nonrecoverable portion of the value-added tax (VAT) on
noninventory receipt lines if the Landed Cost accrual option (RECV_LN_DIST_LC) is selected for
the corresponding miscellaneous charge code on the purchase order. This value flows from the
purchase order to the receipt through the Process Receipts process. This is a VAT accrual for
goods received but not invoiced.
 These miscellaneous charges accrue along with the merchandise amounts only if the charges are to
be paid to the same supplier designated on the purchase order.
Related Links
Accruing Receipts
Understanding Entry Events in PeopleSoft Purchasing
Generating PeopleSoft Purchasing Entry Events
Understanding PeopleSoft Interunit and Intraunit Functionality
Generate Journals Request Page
Budget Checking Process
Receipt Accrual Criteria Description
The Receipt Accrual process does not accrue receipt amounts that have been paid or matched by
PeopleSoft Payables. This section describes criteria that the Receipt Accrual process uses to
determine which receipts should be billed in various situations.

Eligibility Requirements for Accrual

The following list provides eligibility requirements for accrual:
1.For both purchase order and non-purchase order receipts:
a. The receipt must not be fully matched and matching must be required.
b. The receipt status must be Moved,  Not Recv'd (not received),  Open,  or Received.
c. If the receipt line is purchase order related then the purchase order line must have
Receiving Required selected.
d. The receipt distribution line must be non-inventory-related for the distribution to be
accrued. The inventory-related distribution rows are still eligible for receipt accrual
reporting.
e. The receipt line cannot have a MFG Production ID and OP Sequence value. MFG
Subcontract receipts are not accured.
2.For purchase order receipts, the Accrue PO Receipts check box in the associated PeopleSoft
Purchasing business unit must be selected.
3.For non-purchase order receipts, the Accrue Non/PO Receipts check box in the associated
PeopleSoft Purchasing business unit must be selected.

Inventory-Related Purchasing Transactions Accrual

The Receipt Accrual process is not designed for receipts that you acquire through inventory-
related purchasing transactions. Receipt accrual for these receipts occurs in PeopleSoft Inventory
and in PeopleSoft Cost Management.
The inventory business unit assignment on the requisition, purchase order, or receipt distribution
determines whether the purchasing transaction is inventory-related. To ensure that the Receipt
Accrual process works, verify that no inventory business unit appears by default on the requisition,
purchase order, or receipt distribution for the receipt.
The Receipt Accrual process does accrue receipts for the purchase of items set up as inventory
items, if the item is purchased in a non-inventory-related purchasing transaction, such as an
expense transaction.
Related Links
Understanding Miscellaneous Charges
Establishing PeopleSoft Purchasing Business Units
Understanding the Matching Process
Receipt Accrual Setup
To set up receipt accrual for a business unit:
 1.Select the Accrue PO Receipts check box or the Accrue Non/PO Receipts check
box on the Purchasing Definition - Business Unit Options page.
See Establishing PeopleSoft Purchasing Business Units.

2.Select the Accrue Charge check box on the Misc Charge/Landed Cost Defn

(miscellaneous charge or landed cost definition) page to accrue miscellaneous charges or
landed cost charges.
You cannot override this value on the purchase order; it flows to the receipt through the
purchase order value adjustment.
See.Understanding Miscellaneous Charges
3.Select a journal template for receipt accrual on the Procurement Control - GL Templates
page.

Select the template that you want to use in the Receipt Accrual field. The standard
template for receipt accrual is REC_ACCRUE.
See Defining Procurement Controls for General Ledger Business Units.
4.Select the journal source and journal date on the Journal Generator Template - Defaults
page.
When you set the journal source and date, you are ensuring that the accounting entries are
reversed at the beginning of each subsequent period.
See Understanding Journal Generator

5.Define the liability account for receipt accrual in the Expenses Accrual field on the
Accounting Entry Template page.
PeopleSoft Purchasing debits accrued receipt charges from the expense account
designated on purchase order distributions. The alternate account designated on the
Accounting Entry Template page applies only to the liability account defined here.
See Accounting Entry Template Page.
6.Select Do Not Generate Reversal as the reversal code on the Journal Generator Template
REC_ACCRUE.
The upgrade process should accomplish this step; you should not need to complete it
independently of the upgrade.
7.Open the Purchasing Definition on the Accounting Entry Definition page, and change the
Record from RECV_LN_ACCTG to RECV_LNACCTG_VW.
This record includes all receipt accruals that are budget-checked and ready to be journal
generated. It excludes any receipt accrual with transactions that failed the budget process.
The upgrade process should accomplish this step; you should not need to complete it
independently of the upgrade.
8.If any ChartFields are designated on the Detail Ledger Group - Chartfield page
as Balanced, you need to select the Always Inherit rule for those ChartFields on the
Chartfield Inheritance page.
9.Set up ChartFields in the general ledger definition.
10. Set up ChartFields for the accounting entry definition.

Receipt Accrual Implementation

Use the following process flow to use the Receipt Accrual process, the Entry Event Generator, and
the Journal Generator process (FS_JGEN) to implement the receipt accrual business process:
1.Run the Receipt Accrual process from the Accrue Receipts page.
 The Receipt Accrual process populates the RECV_LN_ACCTG table.
2.If commitment control is enabled, budget-check the receipt accruals from the Budget Check
Request page.
3.Use the Receipt Accrual Accounting Entries to review Budget Exceptions and override them
as necessary.
4.If you are using entry events, run the Entry Event Generator process from the Entry Event
Run Request page.
5.Run the Journal Generator process from the Generate Journals Request page:
a. On the Generate Journals Request page, select REC_ACCRUE in
the Template field.
The template that you select controls the accounting lines source and journal date.
Note: Reversal entries are not generated because Do Not Generate Reversal was
selected as the reversal code on the Journal Generator template REC_ACCRUE as
part of the setup process.
b. The Journal Generator process uses Receipt Accrual process entries in the
RECV_LN_ACCTG_VW view as input to populate the PeopleSoft Journal Entry
tables used by PeopleSoft General Ledger.
6.After you've created the journal entries for PeopleSoft General Ledger with the Journal
Generator process, use the Journal Drill Down inquiry page to view and navigate to the
accounting entries or to navigate PeopleSoft General Ledger.
7.Run the Receipt Accrual SQR Report process (PORC700) to review the totals for each
expense account and the total accrued liability.