Once you complete Periodic Costing calculation, you should reconcile what item costs you have to account for during a period and how those costs are accounted. In other words, the profit or loss shown by running Periodic Costing to derive at item unit costs based on inventory and shop floor transactions may not agree with the profit or loss shown by the GL accounts. When this occurs, you reconcile the profits or losses that are shown as different. In short, you should ensure that figures are in agreement and are accurate.

Activities, such as analyzing doubtful receivables, adjusting individual value, and resolving deferred revenue, are part of the reconciliation scenario. For example, legal documents can be booked against the accrual account because amounts are already adjusted in inventory. You may need to reconcile and ensure that the adjustment is correct, compensating the difference between the accrual and the legal document. The closing operation includes the transfer of the necessary information to the relevant ledgers, as well as the reconciliation of the transferred information.

Periodic Costing should be executed not only as an end of period activity but also during the period to validate the transactions closer to real time. Doing the intermediate Periodic Costing calculation runs and analysis alleviates the work to be done at the end of the period because you correct transactions early.

This section contains a description of the reports, browses, and collections that you use to analyze and reconcile the results of the PC calculation.

Finally, this section covers the steps to close the PC sub-ledger once the PC results have been verified and reconciled.