dokumen.tips_ebs-r12-subledger-accounting.pdf

3. Copyright © 2006, Oracle. All rights reserved. 3 Purpose: This document provides an overview of features and enhancements included in Release 12. It is intended solely to help you assess the business benefits of upgrading to Release 12. Disclaimer: This document in any form, software or printed matter, contains proprietary information that is the exclusive property of Oracle. Your access to and use of this confidential material is subject to the terms and conditions of your Oracle Software License and Service Agreement, which has been executed and with which you agree to comply. This document and information contained herein may not be disclosed, copied, reproduced or distributed to anyone outside Oracle without prior written consent of Oracle. This document is not part of your license agreement nor can it be incorporated into any contractual agreement with Oracle or its subsidiaries or affiliates. This document is for informational purposes only and is intended solely to assist you in planning for the implementation and upgrade of the product features described. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described in this document remains at the sole discretion of Oracle. Due to the nature of the product architecture, it may not be possible to safely include all features described in this document without risking significant destabilization of the code.

5. Copyright © 2006, Oracle. All rights reserved. 5 Agenda • Introduction to Subledger Accounting – Background – Key Business Messages – Impacted Applications • Key Concepts and Terminology – Part 1: Subledgers and Subledger Journal Entries – Part 2: Accounting Methods Builder – Part 3: Subledger Balances, Inquiries, and Reports – Part 4: Additional Features • Customer Impact / Upgrade Considerations • Demo • ADS Content • Hands-on

7. Copyright © 2006, Oracle. All rights reserved. 7 Oracle Subledger Accounting: Oracle Subledger Ac cou nting is a rules- based eng ine for generating acco unting entries b ased on sou rce transactions from AL L Oracle Ap plications . Introduction to Solution - Definition

9. Copyright © 2006, Oracle. All rights reserved. 9 Background Issues w ith this Appro ach: • Inconsistencies in Accounting Generation – Summary vs. Detail – Direct to General Ledger vs. Open Interface • Inconsistent Drilldown from General Ledger • Inconsistent Mechansims for Controlling Accounting – FlexBuilder – Account Generator – Automatic Offsets – Etc. • Duplication of Development Effort

10. Copyright © 2006, Oracle. All rights reserved. 10 Background Requirement fo r Multiple Acc oun ting Representations • Certain European countries require statutory accounting in addition to corporate requirements • Similar requirement in certain regulated industries (e.g. Insurance) • Global Accounting Engine (AX) introduced to address European requirement • Non-AX customers use consulting extensions and/or Global Consolidation System (GCS)

11. Copyright © 2006, Oracle. All rights reserved. 11 Introduction to Subledger Accounting Payables Assets Purchasing Projects Inventory Receivables Leasing Payroll Subledger A ccou nting to th e Rescue

12. Copyright © 2006, Oracle. All rights reserved. 12 Introduction to Subledger Accounting • Rule-based accounting engine, toolset & repository supporting Oracle E-Business Suite modules • Allows multiple accounting representations for a single business event, resolving conflicts between corporate and local fiscal accounting requirements • Retains the most granular level of detail in the subledger accounting model, with different summarization options in the General Ledger, allowing full auditability and reconciliation • Introduces a common data model and UI across subledgers, replaces various disparate 11i setups, providing single source of truth for financial and management analysis

13. Copyright © 2006, Oracle. All rights reserved. 13 Introduction to Subledger Accounting • There are no SLA responsibilities • Users do not login to SLA • SLA is a service provided to Oracle Applications • SLA forms and programs are embedded within standard Oracle Application responsibilities (e.g. Payables Manager) • SLA provides the following services to Oracle Applications: – Generation and storage of detailed accounting entries – Storage of subledger balances (e.g. third party control account balances) – Subledger accounting entries (with drilldown to transactions) – Subledger reporting (e.g. Subledger journal reports, open account balances listing) Subledger Ac cou nting is a Service, not an Ap plication

14. Copyright © 2006, Oracle. All rights reserved. 14 Introduction to Subledger Accounting • SLA generates accounting for Oracle Applications • Financial Services Accounting Hub (FSAH) generates accounting for any transaction source (Oracle or non-Oracle) • SLA is included with any E-Business Suite license • FSAH is a separate product that must be licensed separately • FSAH was introduced last year with 11i BUT: – It is not compatible with 11i Oracle subledgers – It was essentially a pre-release of the R12 version SLA and Financial Services Acco unting Hub

15. Copyright © 2006, Oracle. All rights reserved. 15 Introduction to Subledger Accounting Invoice Internal Identifier: 1001 Ledger: FR Statutory GL Date: 2-Mar-2006 Invoice# 100 Supplier: ABC Networks Invoice #100 ABC Networks 2 Monitors – Marketing $1000 5 Printers – Marketing $ 500 Freight $ 100 Tax $ 110 Total $1710 Ledger: US Corporate GL Date: 2-Mar-2006 Invoice# 100 Supplier: ABC Networks Invoice Internal Identifier: 1001 DR CR 1 Expense 01-EXP-200 $1500 2 Freight 01-FR-200 $100 3 Tax 01-TX-200 $110 4 Liability 01-LIAB-200 $1710 Invoice Line 1 Invoice Line 2 Invoice Line 3 Invoice Line 4 Transactions and A ccou nting Entries

17. Copyright © 2006, Oracle. All rights reserved. 17 Transactions vs. Accounting • SLA provides a distinction between a transaction and the accounting representation of the transaction • Accounting distributions did not necessarily go away – Needed for upgrade customers – Needed as starting point for SLA (Don’t want to force customers to define their own SLA rules) – In some cases, necessary to allow user input • Most default SLA rules just ‘pass through’ the distribution accounts (where applicable) • If you modify SLA rules, the ultimate accounting entry may not match the distributions. • OK because distribution accounts are just defaults (New Slide)

18. Copyright © 2006, Oracle. All rights reserved. 18 Key Business Messages • Better, Richer Information: Automatically capture detailed information to drive financial and management reporting – without cluttering up your general ledger • Improved Control: Control every transaction that impacts your accounts and drive consistency across the enterprise • Business Agility: React quickly to accounting rule changes, regulatory shifts, and new information requirements without involvement from IT • Clear, Easy Reconciliation: The link between general ledger balances and underlying transactions is maintained automatically for internal and external audit purposes

19. Copyright © 2006, Oracle. All rights reserved. 19 Key Business Messages • Account for any transaction from any application and centralize accounting policies and processing • Enable compliance with multiple legislative, industry or geography requirements concurrently in a single instance through configurable rules • Streamline accounting processing • Provide GL to subledger transaction reconciliation platform by maintaining link between transaction and accounting data • Increase transparency and enable full auditability of the transaction and accounting data through the new data model

20. Copyright © 2006, Oracle. All rights reserved. 20 Key Business Messages Management Framework Information Delivery Regulatory Reporting Subledger Accounting Transaction Systems Oracle Payroll Oracle Projects Oracle Payables Oracle Receivables • Centralized accounting rules • Predefined Validations • Date effective policies • Sophisticated error handling • Full audit trail • Bidirectional drilldowns • Detailed Journal Entries • Configurable Reference Information • Consistent Balances • On-line inquiries Analytics

22. Copyright © 2006, Oracle. All rights reserved. 22 Key Business Messages US GAAP US COA US Calendar $ US GAAP US COA US Calendar £ Simultaneous Accounting for All Entities… US GAAP US COA US Calendar $ …while Ensuring Corporate Visibility & Local Compliance French IAS Plan Comptable French Calendar € Operations in US, UK, France

23. Copyright © 2006, Oracle. All rights reserved. 23 Key Business Messages • Account for any transaction from any application and centralize accounting policies and processing • Enable compliance with multiple legislative, industry or geography requirements concurrently in a single instance through configurable rules • Streamlined accounting processing • Provide GL to subledger transaction reconciliation platform by maintaining link between transaction and accounting data • Increase transparency and enable full auditability of the transaction and accounting data through the new data model

27. Copyright © 2006, Oracle. All rights reserved. 27 Impacted Applications • General Ledger • Payables • Receivables • Projects • Assets • Costing • OPM • Public Sector/Federal • Payroll • Property Manager • Loans • Lease Management (Post R12) • Cash Management • Globalizations • Intercompany

29. Copyright © 2006, Oracle. All rights reserved. 29 Subledger • A transactional application that generates accounting impact • Used to store detailed information not needed for a general ledger • Subledgers post summarized activity to a general ledger periodically to maintain centralized account balances for the company • Example: The A/R subledger stores receivables by customer, but this detail is not needed in a general ledger

31. Copyright © 2006, Oracle. All rights reserved. 31 Subledger vs. GL Journal Entries Invoice No: 136274 GL Date: 01/27/07 3rd Party: Fender 101.100.63580.0000.720.000.000 6,000 EUR 101.100.22100.0000.000.000.000 6,000 EUR Invoice No: 131299 GL Date: 01/27/07 3rd Party: Gibson 101.100.63580.0000.720.000.000 3,000 EUR 101.100.22100.0000.000.000.000 3,000 EUR Invoice No: 116555 GL Date: 01/27/07 3rd Party: Kramer 101.100.63580.0000.720.000.000 2,000 EUR 101.100.22100.0000.000.000.000 2,000 EUR Batch: AP Invoices 27-Jan-07 GL Period: Jan-07 101.100.63580.0000.720.000.000 11,000 EUR 101.100.22100.0000.000.000.000 11,000 EUR SLA JE #1 SLA JE #2 SLA JE #3 GL JE #1 (New Slide)

33. Copyright © 2006, Oracle. All rights reserved. 33 SLA – GL Flow with Subledger-Level Secondary Ledger Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting Create Accounting (New Slide)

34. Copyright © 2006, Oracle. All rights reserved. 34 SLA – GL Flow with Journal-Level Secondary Ledger Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting GL Journal Entry GL Balances Posting Create Accounting Posting (New Slide)

35. Copyright © 2006, Oracle. All rights reserved. 35 SLA – GL Flow with Balance-Level Secondary Ledger Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting GL Journal Entry GL Balances Create Accounting GCS Posting (New Slide)

36. Copyright © 2006, Oracle. All rights reserved. 36 SLA – GL Flow with Subledger-Level Reporting Currency Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting Create Accounting (New Slide)

37. Copyright © 2006, Oracle. All rights reserved. 37 SLA – GL Flow with Journal-Level Reporting Currency Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting GL Journal Entry GL Balances Posting Create Accounting Posting (New Slide)

38. Copyright © 2006, Oracle. All rights reserved. 38 SLA – GL Flow with Balance-Level Reporting Currency Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting GL Balances Create Accounting Translation (New Slide)

39. Copyright © 2006, Oracle. All rights reserved. 39 Event Model • Event Model: definition of the subledger transaction types and lifecycle – Event Class: classifies transaction types for accounting rule purposes – Event Type: for each transaction type, defines possible actions with accounting significance • Applications must tell SLA when an event has occurred. • When a user runs the SLA Create Accounting program, it processes all events with the appropriate status

40. Copyright © 2006, Oracle. All rights reserved. 40 Event Classes Payables • Invoice • Debit Memo • Prepayment • Payments • Refunds Receivables • Invoice • Deposit • Receipt • Bill Receivable Assets • Additions • Adjustments • Capitalization • Depreciation etc.

41. Copyright © 2006, Oracle. All rights reserved. 41 Event Types AP Invoice Events • Validated • Adjusted • Cancelled AR Receipt Events • Created • Applied • Unapplied • Updated • Reversed FA Depreciation Events • Depreciation • Rollback depreciation etc.

42. Copyright © 2006, Oracle. All rights reserved. 42 Sources • Identified by application development teams and made available as data in SLA for: – Deriving accounts – Inclusion in descriptions – Conditial logic: generate a journal line if distribution type = accrual • Mapped to specific SLA accounting attributes such as account, amount, GL Date, conversion rate type, etc.

44. Copyright © 2006, Oracle. All rights reserved. 44 Accounting Attributes AP_INVOICE_LINES_ALL.AMOUNT AR_CASH_RECEIPTS_ALL.AMOUNT AP_INVOICE_LINES_ALL.ACCOUNTING_DATE AR_CASH_RECEIPTS_ALL.RECEIPT_DATE (New Slide)

49. Copyright © 2006, Oracle. All rights reserved. 49 Journal Line Type • Identify the natural side – Debit – Credit – Gain/Loss • Determine the accounting class • Set under which conditions the rule will create a line • Define the values needed for entry line generation, such as amount, currency, conversion rate information • Control behavior for certain features i.e. multiperiod accounting, business flows, line merging and summarization

52. Copyright © 2006, Oracle. All rights reserved. 52 Account Derivation Rule • Determine if rule will be generic or specific for a given chart of accounts • Identify what will be derived – Accounting flexfield – Segment/qualifier value – Value from a value set • Define how the value will be derived – Constant – Source value – Mapping Set – Another account derivation rule • Set under which conditions the rule will derive a value

55. Copyright © 2006, Oracle. All rights reserved. 55 Oracle-Owned vs. User-Owned AMB Components (New Slide) Owner: Oracle User Created by: Oracle Development Customer Updatable? No Yes Chart of Accounts? Generic Generic or Specific

56. Copyright © 2006, Oracle. All rights reserved. 56 Account Derivation Rules Chart of Accounts: Generic Specific Use Source for entire Account? Yes Yes Use Source for individual segment? Yes for Qualified segments Yes for Any Segment Use Mapping Sets? No Yes Use Specific Values? No Yes (New Slide)

58. Copyright © 2006, Oracle. All rights reserved. 58 Journal Entry Description • Define how the description on a journal entry or on each of its lines will be built: – Constant – Source Value • Set under which conditions the rule will be used

60. Copyright © 2006, Oracle. All rights reserved. 60 Journal Lines Definition • Identify the journal line types, descriptions, and account derivation rules that will be used to create a journal entry for a particular event type • Generic or specific for a chart of accounts • Define processing options for advanced features such as Multiperiod Accounting and Business Flows

62. Copyright © 2006, Oracle. All rights reserved. 62 Application Accounting Definition Payables Accrual Application Accounting Definition Journal Line Types Account Derivation Rules Journal Entry Descriptions Invoice Journal Line Definition Transaction Objects Sources

63. Copyright © 2006, Oracle. All rights reserved. 63 Subledger Accounting Method Vision Operations (USA) Ledger Standard/GAAP Accrual Subledger Accounting Method Payables Accrual Application Accounting Definition Journal Line Types Account Derivation Rules Journal Entry Descriptions Invoice Journal Line Definition Transaction Objects Sources

65. Copyright © 2006, Oracle. All rights reserved. 65 Subledger Balances • Third Party Control Account Balances – Track balances by account and Customer/Supplier – Statutory reporting requirement in certain countries • Supporting Reference Balances – Store an unlimited number of sources as supporting references on the accounting entries – Optionally track balances by account and supporting reference • Open Account Balances – Track balances by originating transactions and downstream applied transactions • Balances calculated and stored AFTER Accounting Program Completes (New Slide)

66. Copyright © 2006, Oracle. All rights reserved. 66 Subledger Balances Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting Create Accounting (New Slide) SLA Balances Balance Calculation

67. Copyright © 2006, Oracle. All rights reserved. 67 Third Party Control Accounts • Certain accounts can be identified as control accounts. In this case: – You cannot enter manual adjustments against these accounts in General Ledger – SLA maintains balances for these accounts by third party • This typically only applies to balance sheet accounts

69. Copyright © 2006, Oracle. All rights reserved. 69 Supporting References • Transaction attributes can be identified as supporting references and stored on journal entries. In this case: – SLA maintains subledger balances for each supporting reference value and account. • This can apply to balance sheet as well as income statement accounts. In the latter case, subledger balances are reset automatically at fiscal year end. • Formerly (in 11i FSAH) known as analytical criteria.

70. Copyright © 2006, Oracle. All rights reserved. 70 Supporting References Invoice No: 136274 GL Date: 01/27/07 3rd Party: Fender 101.100.63580… 6,000 EUR Product: X8F54 101.100.22100… 6,000 EUR Buyer: Smithers Invoice No: 131299 GL Date: 01/27/07 3rd Party: Gibson 101.100.63580… 3,000 EUR Product: S7000 101.100.22100… 3,000 EUR Buyer: Siszlak Invoice No: 116555 GL Date: 01/27/07 3rd Party: Kramer 101.100.63580… 2,000 EUR Product: 8811920 101.100.22100… 2,000 EUR Buyer: Flanders Batch: AP Invoices 27-Jan-07 GL Period: Jan-07 101.100.63580… 11,000 EUR 101.100.22100… 11,000 EUR SLA JE #1 SLA JE #2 SLA JE #3 GL JE #1 (New Slide)

75. Copyright © 2006, Oracle. All rights reserved. 75 New Reports • XML Publisher Reports – Journal Entries: Listing of subledger journal entries – Account Analysis: Listing of beginning and ending balances from General Ledger with merge of subledger and General Ledger journal entries – Open Account Balances (a.k.a. Trial Balance): Listing of open balances by third party (leverages business flows) – Third Party Balances: Balances by third party control account and third party – Period Close Exceptions Report: Listing of transactions / subledger journal entries that have not yet been posted to General Ledger (New Slide)

79. Copyright © 2006, Oracle. All rights reserved. 79 SLA Reports Detail • All reports are native to XML Publisher • All extracts are very fat, i.e. they include a tremendous amount of data that is not displayed by default but can be added by simple template modifications • Journals and Account Analysis reports include GL journals for non-SLA sources • Open Account Balances Listing is based on Business Flows – It replaces (and genericizes) the AP Trial Balance. – You must create a report definition in advance (New Slide)

80. Copyright © 2006, Oracle. All rights reserved. 80 New Reports • XML Publisher Reports – Journal Entries: Listing of subledger journal entries – Account Analysis: Listing of beginning and ending balances from General Ledger with merge of subledger and General Ledger journal entries – Open Account Balances (a.k.a. Trial Balance): Listing of open balances by third party (leverages business flows) – Third Party Balances: Balances by third party control account and third party – Period Close Exceptions Report: Listing of transactions / subledger journal entries that have not yet been posted to General Ledger

82. Copyright © 2006, Oracle. All rights reserved. 82 Dual Posting Invoice Internal Identifier: 1001 Ledger: FR Statutory GL Date: 2-Mar-2006 Invoice# 100 Supplier: ABC Networks Invoice #100 ABC Networks 2 Monitors – Marketing $1000 5 Printers – Marketing $ 500 Freight $ 100 Tax $ 110 Total $1710 Ledger: US Corporate GL Date: 2-Mar-2006 Invoice# 100 Supplier: ABC Networks Invoice Internal Identifier: 1001 DR CR 1 Expense 01-EXP-200 $1500 2 Freight 01-FR-200 $100 3 Tax 01-TX-200 $110 4 Liability 01-LIAB-200 $1710 Invoice Line 1 Invoice Line 2 Invoice Line 3 Invoice Line 4

86. Copyright © 2006, Oracle. All rights reserved. 86 Straight-Through Accounting Transaction SLA Journal Entry GL Journal Entry GL Balances Journal Import Posting Create Accounting (New Slide) Create Accounting (Final Post)

87. Copyright © 2006, Oracle. All rights reserved. 87 Replacement Accounts • When you disable an account in General Ledger, you can specify a replacement account • SLA and GL will both use the replacement account when generating a journal entry which uses the disabled account • This helps avoid a common source of errors (and Service Requests)

89. Copyright © 2006, Oracle. All rights reserved. 89 Journal Entry Sequencing • Journal entries in GL and SLA can be assigned sequence numbers: – Accounting Sequence: Assigned at time of SLA entry creation or GL posting – Reporting Sequence: Assigned at time of period close • Intended to address statutory requirements in certain countries • This is in addition to Document Sequencing, available in 11i

91. Copyright © 2006, Oracle. All rights reserved. 91 Business Flows Invoice #100 $1000 01-EXP-200 DR CR $800 01-EXP-240 DR CR $200 Invoice #100 Invoice #100 01-LIAB-200 DR CR 01-LIAB-240 DR CR Invoice #100 $200 Invoice #100 $800 Payment 1101 for Invoice #100 $100 Payment 1101 for Invoice #100 Payment 1101 for Invoice #100 $400 01-CASH-200 DR CR 01-CASH-240 DR CR $100 $400 Payment 1101 for Invoice #100 Payment #1101 $500 Invoice #100

94. Copyright © 2006, Oracle. All rights reserved. 94 Manual Journal Entries • You can enter manual entries in SLA, similar to GL journal entries • Manual subledger journal entries must be posted to GL like any other subledger journal entry • Unlike GL journal entries, subledger journal entries are identified by a subledger journal source (e.g. Payables)

95. Copyright © 2006, Oracle. All rights reserved. 95 Error Handling • If the accounting program cannot generate any journal entry (for any ledger), it completes with status Error • The accounting program generates an execution report detailing any errors • To avoid errors, keep in mind: – Accounting rules are pre-validated – When you disable an account, you can specify a replacement account

96. Copyright © 2006, Oracle. All rights reserved. 96 Diagnostics Framework • The diagnostics framework captures all sources passed to the accounting program • This allows you to validate whether the Accounting Program is doing the correct thing • There is performance overhead associated with this, so only enable it when needed.

99. Copyright © 2006, Oracle. All rights reserved. 99 Customer Impact • Default SLA rules preserve the accounting rules used in 11i – All seeded rules are generic – not chart of accounts specific – In most cases, accounts are passed from Oracle Applications into SLA as sources • Users can optionally copy and then modify the seeded SLA rules • Users do not need to modify any responsibilities – If using custom menus or responsibilities, you may need to add SLA forms/reports/programs to the custom responsibilities • Accounts on transaction distributions are now default accounts; seeded rules use these accounts when generating entries. If customer modifies the rules to derive a different account, then there will be a discrepancy between the transaction distribution and journal entries.

100. Copyright © 2006, Oracle. All rights reserved. 100 Who Does What in Deploying SLA? • SLA Development Team: – Builds SLA infrastructure (Accounting Methods Builder, Create Accounting program, Transfer to GL, balance calculation programs, inquiries and reports, etc.) • Other Oracle Development Teams (AP, AR, FA, etc.): – Defines event model and sources for their product – Inserts code in their product to raise SLA events where needed – Maps sources to accounting attributes – Defines default Accounting Methods Builder rules • Customer: – Copies and modifies default AMB rules if desired – Defines supporting references if desired – Enables control accounts if desired – Etc. (New Slide)

101. Copyright © 2006, Oracle. All rights reserved. 101 Who Does What in Deploying FSAH? • SLA Development Team: – Builds FSAH infrastructure (Accounting Methods Builder, Create Accounting program, Transfer to GL, balance calculation programs, inquiries and reports, etc.) • Customer – Defines event model and sources for each transaction source – Creates code to raise FSAH events where needed – Maps sources to accounting attributes – Defines Accounting Methods Builder rules – Defines supporting references if desired – Enables control accounts if desired – Etc. (New Slide)

102. Copyright © 2006, Oracle. All rights reserved. 102 Upgrade Considerations • By default, the R12 upgrade migrates at least 6 periods of accounting entries from each application to the SLA data model. • You can modify this if desired. • For prior periods, the historical data is preserved. You can drill from General Ledger to the historical transactions using standard GL drilldown • You can upgrade prior periods by request during uptime

104. Copyright © 2006, Oracle. All rights reserved. 104 Demonstration Flow • Enter an invoice and validate it • Create accounting and post to GL • View SLA journal entry and T-account • Query entry in GL and drill back to SLA entry and to invoice • Modify AMB Rules: – Journal Line Type – Account Derivation Rule – Journal Entry Description • Construct a rule for Invoice Validation event • Create accounting and post to GL • View SLA journal entry and compare against first entry

dokumen.tips_ebs-r12-subledger-accounting.pdf

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