Oracle OPM Manufacturing Accounting Cycle

Oracle OPM Manufacturing Accounting Cycle

1. Batch Release
DR :   WIP
      CR :Inventory

2. Step certification
DR :  WIP
    CR : RCA

3. Batch Certification
DR : Inventory
   CR : WIP

4. Batch Close
DR / CR :  WIP
   CR / DR :  CLS

All the above accounts WIP, RCA and CLS are set up in OPM Cost Management module under MAC set up.

RCA is otherwise known as ‘Overhead absorption control account’. This is normally a P&L Account and a credit to this account implies that the overheads used in production are absorbed by the finished product inventory and hence the finished product inventory value has gone up. This gets reversed when the actual overhead expenses (wages, power, water, rent etc) are expensed in the month end.

Since RCA is a P&L account with a credit balance, this could temporarily inflate the profits of the organization. The consultant should clearly understand the significance of this account which is normally used by the cost accountants.

CLS is the the ‘WIP clearing account’. This normally gets a balance in the standard costing scenario if the sum of the costs of the raw materials and the resources is different from the standard cost of the finished product. This account can also get a balance in the OPM PMAC (Period Moving Average Costing) scenario when a batch is released in one costing period and completed / closed in the next account period. In such scenario, this account is to be clubbed with WIP.

The accounting entries in the above 4 steps will be generated in OPM MAC under Document type ‘PROD’ and will get generated when you run the ‘Subledger Update’ Process and will be moved to GL interface when you run the GL update process in OPM MAC. These will be available in the GL interface table under source ‘OPM Production Management’. These entries move to GL Journal tables when you run the import journals program in GL for that period and that source.