Year End Process Doc

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Yearend Activities _ TATA Cummins

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Yearend Activities

Author: Tata Consultancy Services Ltd.

Creation Date: 20-Mar-2007

Last Updated: 20-Mar-2007

Version: 1.0 (Draft)


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INTRODUCTION............................................................................................................. 3

PRE-REQUISITES........................................................................................................... 3

YEAREND ROADMAP................................................................................................... 3

1. BUDGET ACTIVITIES ............................................................................................... 4DEFINE BUDGET ............................................................................................................... 4

ENTER BUDGET (EXPENSE) .............................................................................................. 6

CARRY FORWARD BUDGET &ENCUMBRANCE ................................................................. 7OPEN ENCUMBRANCE PERIOD .......................................................................................... 8

2. RATE UPDATION IN OVERHEADS AND RESOURCES ................................................ 9

3. LOCALIZATION ACTIVITIES................................................................................... 104. INVENTORY ACTIVITIES........................................................................................ 13

5. WIPACTIVITIES ................................................................................................... 15

ALL WIP JOBS NEED TO BE CLOSED.BY 31ST

MARCH,2007. ............................................ 15

6. FIXED ASSET ACTIVITIES...................................................................................... 167. HRACTIVITIES ..................................................................................................... 16

8. OTHER ACTIVITIES ............................................................................................... 17

9. YEAREND BALANCE TRANSFER ACTIVITIES ......................................................... 20

CONCLUSION ............................................................................................................... 22


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Introduction

This document addresses year-end activities specific to TATA Cummins Limited.

Pre-requisites

This document will address issues / activities as a top up over normal period end issues /

activities.

For normal period end activities, please refer Period End Activities.

Yearend Roadmap

Task Name Duration Start Finish

Yearend Activities 23 days 19-Mar-07 14-Apr-07

Budget Activities 12 days 19-Mar-07 1-Apr-07

Define Budget 5 days 19-Mar-07 23-Mar-07

Create Capital Budget 1 day 19-Mar-07 19-Mar-07

Define Values 4 days 19-Mar-07 22-Mar-07

Create Budget Organization 1 day 23-Mar-07 23-Mar-07

Create Assignments and create budget (Capital) 1 day 23-Mar-07 23-Mar-07

Enter Budget (Expense) 7 days 19-Mar-07 27-Mar-07

Prepare Data (to be loaded through Web ADI) 6 days 19-Mar-07 26-Mar-07

Run Web ADI 1 day 27-Mar-07 27-Mar-07

Post Budget Journals 1 day 27-Mar-07 27-Mar-07

Open Encumbrance Year 1 day 27-Mar-07 27-Mar-07

Carry Forward Budget and Encumbrance 12 days 19-Mar-07 1-Apr-07

Finalize Carry forward Strategy 5 days 19-Mar-07 23-Mar-07

Perform Carry Forward Action 1 day 1-Apr-07 1-Apr-07

Open Periods / Calendars (Budget) 1 day 1-Apr-07 1-Apr-07

Open Encumbrance Period 1 day 1-Apr-07 1-Apr-07

Rate Updation in Overheads and Resources 12 days 19-Mar-07 1-Apr-07

Calculation of Resource / Overhead Rates 7 days 19-Mar-07 27-Mar-07

Revisiting Mass Allocation Formula 7 days 19-Mar-07 27-Mar-07Update Resource and Overhead Cost through DataLoader 2 days 31-Mar-07 1-Apr-07

Localization Activities 7 days 26-Mar-07 1-Apr-07Identification of Transaction Types 1 day 26-Mar-07 26-Mar-07

Opening Excise Calendar 1 day 1-Apr-07 1-Apr-07

Attaching Transaction Types 1 day 1-Apr-07 1-Apr-07

CENVAT Claim (50%) 1 day 1-Apr-07 1-Apr-07

TDS Set Up 1 day 1-Apr-07 1-Apr-07

VAT Claim 1 day 1-Apr-07 1-Apr-07

Inventory Activities 10 days 31-Mar-07 11-Apr-07


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Task Name Duration Start Finish

Physical Adjustment - Yearend 10 days 31-Mar-07 11-Apr-07

Physical Adjustment Entry in System 10 days 31-Mar-07 11-Apr-07

Item Cost Update 2 days 31-Mar-07 1-Apr-07

WIP Activities 12 days 19-Mar-07 1-Apr-07

Job Closure Decision / Effect / Effort Discussion 1 day 19-Mar-07 19-Mar-07

Existing Job Close 5 days 27-Mar-07 31-Mar-07

New Job Open 1 day 1-Apr-07 1-Apr-07

Fixed Asset Activities 6 days 31-Mar-07 5-Apr-07

Asset Category Assignments 6 days 31-Mar-07 5-Apr-07

HR Activities 7 days 26-Mar-07 1-Apr-07

HR activity Strategy 1 day 26-Mar-07 26-Mar-07

HR-Leave Balance Updation 1 day 1-Apr-07 1-Apr-07

Other Activities 2 days 31-Mar-07 1-Apr-07

Pending System Entries 2 days 31-Mar-07 1-Apr-07

Yearend Balance Transfer Activities 23 days 19-Mar-07 14-Apr-07

Finalize Balance Transfer Strategy 2 days 19-Mar-07 20-Mar-07

Finalize treatment for Adjustment Periods 2 days 19-Mar-07 20-Mar-07

Creation of Yearend Provisions 12 days 31-Mar-07 13-Apr-07

1. Budget Activities

There are two types of budgets Capital Budget and Expense Budget.

Define Budget

For Capital Budget,

Step1 : Create separate budget as TCL_CAP 07-08.

If new capital budget is not created, against existing capital budgets, we have to open

next budget year by pressing Open Next Year.

Step 2 : Next activity will be creating values for project segment in value set

Future3.

Step 3 : After that we have to create one budget organization as TCL CAP

BUDGET 07-08

Step 4 : Define Account Ranges and attach this funding budget name (TCL CAPBUDGET 07-08) against the ranges

Step 5 : We assign accounts against these ranges.


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Step6 : Then enter budgets through worksheet mode. As per our Set of Books,

budgets will be created through journals. Hence, we have to clickBudget Journals.

.Step7 : We have to press Check Funds and Reserve Funds to make the same

operative.

For Expense Budget, the same budget (TCL_EXP_BUDGET) will be maintained.

We have to change last budget period as ADJ07-08 and open next budget year by

pressing Open Next Year.

Click forCreateJournals


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Enter Budget (Expense)

Step 1 : Prepare data in excel in given format.

Step 2 : Use Web ADI to upload these journals.

Step 3 : We have to post these journals to make them operative.

Step 4 : We have to open Encumbrance Year.

You can change the last period to alater period only if the period youare changing from corresponds tothe last period of your fiscal year.Hence, put last period as ADJ07-08

Click for Open

Next Period


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Carry forward Budget & Encumbrance

Step 1 : Finalize Carry Forward Strategy.

Step 2 : Perform Budget Carry Forward into the system.

Different Carry Forward Options are as follows:

Encumbrance only

Encumbrance and Enc Budget

Funds available

In our case Encumbrance and Enc Budget is applicable since we want to move

Encumbrance along with corresponding Budget amount.

Click for OpenNext Year


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Responsibility Matrix:

Sl. No. Activity Owner Timeline

1. Create Capital Budget Client

2. Define Value Set for Project(required for capital budget)

Client

3. Create Budget Organizations

for Capital Budget

Client

4. Create Account Ranges andAssignments for Capital Budget

Client

5. Enter Budget from Front End

for Capital Budget

Client

6. Perform Open Next Year for

Capital and Expense Budgets

Client

7. Prepare Expense Budget Datafor loading purpose

Client

8. Run Web ADI TCS

(Chittaranjan)

27-Mar-2007

9. Open Encumbrance Year Client 27-Mar-2007

10. Finalize Carry Forward

Strategy

Client 23-Mar-2007

11. Perform Budget Carry Forward Client 01-Apr-2007

2. Rate Updation in Overheads and Resources

Overhead and Resource Rates will be recalculated and accordingly all the overhead andresource rates will be updated.

Decision Pointers:

Sl. No. Issue Resolution

1. Whether Resource andOverhead Rates need to be

changed?


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2, Whether Mass Allocation

Formula needs changes?

3. Finalization of Client Name and

timeline under ResponsibilityMatrix



1. Create Rates for Resources and

Overheads

Client

2. Create new Mass AllocationFormula

Client

3. Upload Resource and Overhead

changed rates throughdataloader

TCS (Meeta) 01-Apr-2007

3. Localization Activities

Localization Organization Additional Information Set Up

The following have to be done:

For the Inventory Organization Main Plant TCL and null Location & Inventory

Organization Master Org - TCL & null Location:

Step 1 : Click on Tax Calendar button to Open Tax Calendar Information India

Localization Screen.

Step 2 : In the Tax Calendar Information India Localization Screen do the

following :

(a) Click on the button Open Next Year to Open next Fiscal Year

(b) Click on the button Excise Generation to Open the Excise

Generation India Localization Screen.

Step 3 : In the above mentioned Screen, Query on the existing Records.

The following Transaction Types will be visible - ORDER and INVOICE.For the Transaction Type INVOICE, change the Prefix to SUPP/07-08


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This activity has to be done after the last shipment / receipt of the current

financial year

Claiming 50% CENVAT for Capital Goods

The following have to be done:

Step 1 : Through Purchasing Responsibility and the following Navigation / Menu

for the Inventory Organization TC1 :

Step 2 : Purchasing Responsibility >> Receiving >> Claim MODVAT on Receipts

This will open up the Find Receipts India Localization Query Screen.

Select the Parameters :

Capital Goods Only = Yes

Pending 50% Claim Only = Yes

Click on the Find Button to find on that apply and Claim 50% CENVATfrom the Claim CENVAT On Receipts India Localization Screen

This activity has to be done in the new financial year

Claiming VAT for capital goods

This will be applicable to Items which are having the Item Class as Capital Goods in

the VAT Item Classification setup.

Step 1 : A Query Output will be given which will have the Receipts against which

VAT installment have to be claimed.

Step 2 : From the Purchasing Responsibility, run the concurrent program India -VAT Claim Processor with parameters as :

Regime : VATRegistration No : 20420801489

Organization : Main Plant TCL

Receipt No : >

The above process to be done before 31st March, 2007 in order to have all the

Accounting Entries generated in March, 2007


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CLAIMING VAT FOR FINISHED GOODS

This will be applicable to Items which are having the Item Class as Finished Goods inthe VAT Item Classification setup.

Receipt-wise claim of such has to be done as is in the existing process.

The above process to be done before 31st March, 2007 in order to have all the

Accounting Entries generated in March, 2007

OPEN TDS CALENDAR

TDS calendar needs to be opened in the new financial year

Decision Pointers:


1. Finalization of Client Name andtimeline under Responsibility Matrix



1. Providing the list of Receipts forwhich VAT Claim Processor is to

be run for Claiming VAT onCapital Items.

TCS(Chitaranjan)

2. Run the VAT Claim Processor

Concurrent Program for Claiming

VAT Installments for Capital

Goods (Receipt No wise)

Client 31-Mar-2007

3. Claim VAT for Finished Goods Client 31-Mar-2007

4. Opening Localized Additional

Organization Info Calendar


5 Changing Suffix for Transaction

Type in Localization AdditionInfo


6 Opening TDS Calendar TCS(Chitaranjan)

01-Apr-2007


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7 Claim 50% Excise Balance for

Capital Goods

Client Post

01-Apr-2007

4. Inventory Activities

Physical Inventory Adjustments

Yearly Stock will be counted between 31st

March, 2007 and 01st

April, 2007 which isto be entered in the system in the consecutive days based on the discussion TCS had with

TCL in Jamshedpur.

Oracle suggests that no transaction should take place in the system between the

period snapshot is taken and launching of final adjustment is done

The following Activities are be performed prior to 31st

March:

1. Physical Inventory creation2. Tag generation (if system generated TAG is used)3. Tags to be made available

The following activity to be performed after the last inventory transaction on 31st

March, 2007 / prior to starting fresh transaction in next Financial year. Since 1 st

April, 2007 falls on a Sunday, this activity can also be done on that day.

1. Freezing the Physical Inventory

2. Running a report / Scripts to find out the Stock / Cost of each Item.

It is assumed that the users will enter the Stock using the Physical Inventory Counting

Screen between the period 02nd April, 2007 onwards and at the same time transaction will

also continue in the system.

At the end of the stock entering activity, a Customized report / script to be run to find out

that which are the Stock adjustments, if done will try to drive Inventory negative and

hence error out the Adjustment Transaction. After identification these counts will have tobe Rejected.

Being satisfied that there is enough stock to carry out negative adjustment, Launching ofPhysical Inventory Adjustment may be done in the system. After discussion with core

team, it has been decided that the launching will be done at the current date of the

transaction. The Adjustment Account will be provided by the Finance Department.

A Report will be run to find out the difference in Valuation had the adjustment been

done on 31st

March, 2007 based on the data available in the system. Accordingly


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General Ledger entries will be passed in the system, if required, through Provisional

reversible journals.

Note: According to the recent discussions, it is found out that TCL has decided to

perform Physical Inventory Counting in the System on 31st

March, 2007 and 01st

April, 2007 itself and to launch the Adjustment on 01st April, 2007 or 02nd April,

2007 before Transaction starts. Hence the Report related activities are not required

and adjustment entries in General Ledger are also not required.

Cost Update transactions for items

This will mainly be done on the items which have multiple sources of Procurement

Indigenous and Imported.

As a single Item Code is maintained for such items, it becomes difficult to segregatethe cost of the Item from two different sources, affecting Schedule 6 Reporting and

wrong Inventory Cost and COGS.

To correct the cost at Year-end cost for such Stock following activity is carried out:

1. Take the total Stock of the Item from the system and the average rate.Ex: Say the Total Stock of the Item is 150 and Average Rate is 32

2. Physically segregate the item based on Procurement sources Indigenous andImported and find out the last Purchase rate from the system.

Ex: Say 90 Qty from Imported Source with Purchase Rate at Rs 100/- and 60Qty from Indigenous Source with Purchase Rate at Rs 10/-

3. Calculate the Closing Stock / rate based on the above information.Ex. The Closing Stock may be arrived at as (90*100) + (60*10) which equalsto 9600. The Rate is evaluated to 9600/150 which equals to 64

4. Perform Cost Update of the Item with the differential cost from steps 1 and 3Above i.e., (64-32) = 32. The Adjustment Account to be provided is to bedecided by the Finance Department. However, we recommend this account

should come under COGS / COS Roll Up Group.

Decision Pointers:



timeline under Responsibility


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Matrix



1. Performing Physical Inventory

Activities

Client

2. Perform Cost Update of Items

procured through multiple

sources

Client

5. WIP Activities

Closure of WIP Jobs may be done in the system for the following reasons :

To close the completed jobs so that the variances (if applicable) arerelieved from the Job

To close all jobs which are partially open. New Jobs needs to be droppedwith new Resource and Overhead Rates which will be a pre-requisite to be

entered in the system.

Decision Pointers:



timeline under Responsibility

Matrix



1. A list of jobs which will have to

be closed by TCL, needs to beextracted from back end.

TCS (Meeta) 26-March-07

to 31-March-07 on daily

basis.

2. Closure of existing Jobs Client

3. Dropping New Jobs Client 01-April-2007


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Note: For better control, oncenew resources and overhead

rates are defined in system.

6. Fixed Asset Activities

Under Fixed Asset, primary activity will be changing the depreciation rates attachedagainst the respective assets due to change in shift wise depreciation rates. Regarding the

same already one TAR is open to obtain Oracle views / action map on the same.

Decision Pointers:

Sl. No. Issue Resolution1. Whether depreciation rates need

to be changed for assets?

2, When we can prepare data

related to change in fixed asset

rates?

3. Finalization of Client Name andtimeline under Responsibility

Matrix



1. Finalization of Fixed Asset

Depreciation rate changeprocess.

Already one TAR is open with

Oracle. TAR Number is

TCS

(Chittaranjan) /Client (Anoop)

29-March-

2007

2. Identification of assets whichwill undergo these rate changes.

Client

3. Assign new asset categories

against the identified assets.

TCS

(Chittaranjan) /

Client (Anoop)

01-Apr-2007

7. HR Activities


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In TCL, HR related activities are not applicable at financial year end as the same is

applicable for calendar year end. However, a few decisions can be validated involving

HR people.

Decision Pointers:


1. Whether Position Hierarchy,

Leave Balance Updation will becarried out at financial year

end?





1. Organize a meeting with HR to

finalize the decisions

Client

8. Other Activities

This will be addressed on As and When Required mode during April,07.

However, the following document can be treated as a guideline for doing so.

The following extract describes how to correct Pending Transactions :

*********************************************************

Pending/Errored Inventory Transactions

Inventory Responsibility >> Accounting Close Cycle >> Inventory Accounting Periods

-- Select Pending Button related to an OPEN period.

-- In the top region -- Resolution Required-- If it show pending records, These must be fixed prior to trying to close the period.

-- form only shows a count of pending records against the period.

Inventory Responsibility >> Transactions >> Transaction Open Interface


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-- This form queries the MTL_TRANSACTIONS_INTERFACE table

-- Records can be resubmitted from this form.

Inventory Responsibility >> Transactions >> Pending Transactions

-- This form queries the MTL_MATERIAL_TRANSACTIONS_TEMP table

-- Records can only be resubmitted via the form.-- Records must be processed out of this form in order to close inventory accounting

periods.

Inventory Responsibility >> Transactions >> Material Transactions

-- Records can be viewed from this form to know whether the transactions has costed

flag as 'YES' or 'No', also other related columns under Alternate Region >>

'Reason/Reference'.-- We re-submit the records only through SQL.

Pending/Errored WIP Move and WIP Resource Transactions

Work in Process Responsibility >> Move Transactions >> Pending Move Transactions-- This form queries the WIP_MOVE_TXN_INTERFACE table

-- Records can be updated, deleted, and resubmitted via the form.

Work in Process Responsibility >> Resource Transactions >> Pending Resource

Transactions

-- This form queries the WIP_COST_TXN_INTERFACE table

-- Records can be updated, deleted, and resubmitted via the form.

Resolving Pending Material Transactions

Resolving Pending Material Transactions is a process of determining and fixing what is

preventing a record from being processed through the TRANSACTIONS_INTERFACEtable. Details of pending transactions can be viewed through the application by

navigating to the Transaction Open Interface form.

Using the Transaction Open Interface window, you can view, edit, correct and resubmittransactions received through the open interface.

There are five selections in the alternate region list of values: Error, Location, Source,

Intransit and Other. These provide detailed information to help you resolve pendingtransactions. In the Error alternate region:

a. The error code describes the error on the last attempt to process the line item.

b. The error explanation gives a reason for the error.c. The process flag indicates whether the row has been processed by the concurrent

manager.

The process flag status codes are:


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1 = Pending

2 = Running

3 = Error

Resubmitting Transactions for Processing:

In the Transaction Open Interface window, check the Resubmit [] box next to the

transaction you want to resubmit or choose Resubmit All from the Special menu. If you

have many transactions to resubmit, use the Resubmit All button to select all transactionsfor processing and then selectively deselect individual transactions you do not want to

resubmit. Save your work to submit the transactions for processing.

Resolving Pending WIP Cost Transactions

Resolving Pending WIP Cost transactions is a process of determining and fixing what is

preventing a record from being processed through the WIP_COST_TXN_INTERFACE

table Pending transactions can be viewed through the application by navigating to theWIP Responsibility >> Pending resource transaction form.

In the Pending Resource Transaction window you can view, update, delete, and resubmit

resource transactions that have failed validation and remain in the

WIP_COST_TXN_INTERFACE table. You can also resubmit transactions whoseconcurrent process has failed and have a processing phase of Complete and process status

of Error. There are eight selections in the alternative region list of values: Processing,

Source, Concurrent Request, Job or Schedule Name, Operation, Resource, Transaction

and Comments.

Error transactions will have the Transaction ID and Group ID populated and the Statuswill be error. Pending transactions will have the Transaction Id and Group ID fields blankand the Status will be pending.

To view error details for failed resource transactions, select the erred transaction andclick on the [Error] button. The Pending Resource Transaction error window appears.

Column indicates the name of the column in the resource transaction interface table

(WIP_COST_TXN_INTERFACE)that failed validation. Message indicates why the

transaction failed.

To resubmit failed resource transactions:

In the Pending Resource Transactions widow either check the transaction's Resubmit

check box to resubmit one record or choose select All for Resubmit from the SpecialMenu then save your work.

*********************************************************


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Decision Pointers:Not Applicable


TCS / TCL.

9. Yearend Balance Transfer Activities

Yearend activities are the final activities under yearend initiative.

Step 1 : Create Provisional Journals.

We have to create Provisional Journals and will reverse it in the next period when thesame will be opened.

Put Period as theperiod APR07-08where journals willbe reversed.


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Step 2 : Finalize treatment of Adjustment Periods.

Step 3 : Create Statistical Journals.

Step 4 : Once Balance Transfer Strategy is finalized, we have to submit oneClosing Entry.

Different Closing Entry options are:

1. Calculating Retained Earning Balance without creating journals2. Calculating Retained Earning Balance with journals without using offset

account.3. Calculating Retained Earning Balance with journals with using offset account.

Decision Pointers:



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1. Which option should we select

to pass Closing Entry?

2, How do we use Adjustment

Period for analysis purpose?

3. Which are the provisional

journals need to be passed?





1. Finalize Balance Transfer

Strategy

Client

2. Finalize treatment for

Adjustment Period

Client

3. Creation of Yearend Provisions Client

4. Creation Statistical Journals Client

5. Pass Closing Entry Client

Conclusion

TCS people will be available over phone / mail for 24 * 7 for any assistance.

Year End Process Doc

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